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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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,
2008**

COMMISSION FILE NO. **0-23920**

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

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

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

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

Securities registered pursuant to Section 12(b) of the Exchange
Act: **NONE**

Securities registered pursuant to Section 12(g) of the Exchange
Act:

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

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

Indicate by check mark if the issuer is not required to file
reports pursuant to Section 13 or 15(d) of the Act: Yes [ ] No [ x ]

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 issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [x]
No [ ]

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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: Yes [ ] No [x]

Indicate by check mark whether the issuer is a large accelerated
filer, an accelerated filer, or a non-accelerated filer:

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

Indicate by check mark whether the issuer is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

The issuers revenues for our most recent fiscal year are:
$nil.

The aggregate market value of the voting stock held by
non-affiliates of the issuer on July 11, 2008, computed by reference to the
price at which the stock was sold on that date: $12,881,858.

The number of shares outstanding of the issuer's common stock, no par value, as of July 25, 2008 was 27,935,824.

Documents incorporated by reference: See Exhibits.

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

2

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REGI U.S., INC. FORM 10-KSBTABLE OF CONTENTS

|PART I                                                                                                                                                 | 4 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | --
|ITEM 1. DESCRIPTION OF
      BUSINESS                                                                                                                  | 4 
|GENERAL                                                                                                                                                | 4 
|BUSINESS OF THE COMPANY AND PRODUCTS                                                                                                                   | 4 
|Overview and History                                                                                                                                   | 4 
|PRODUCTS AND PROJECTS                                                                                                                                  | 6 
|Rand Cam Technology                                                                                                                                    | 6 
|Gasoline and Diesel Engine                                                                                                                             | 6 
|Compressor                                                                                                                                             | 7 
|RadMax Rand Cam Technology                                                                                                                           | 7 
|MARKETING                                                                                                                                              | 12
|COMPETITION                                                                                                                                            | 12
|RAW MATERIALS AND PRINCIPAL SUPPLIERS                                                                                                                  | 12
|PATENTS, TRADEMARKS, LICENCES, FRANCHISES, CONCESSIONS,
      ROYALTY AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION                                  | 13
|RISK FACTORS                                                                                                                                           | 14
|ITEM 2. DESCRIPTION OF
      PROPERTY                                                                                                                  | 17
|ITEM 3. LEGAL PROCEEDINGS                                                                                                                              | 18
|ITEM 4. SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                      | 18
|PART II                                                                                                                                                | 18
|ITEM 5. MARKET FOR COMMON
      EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES
      OF EQUITY SECURITIES                  | 18
|DIVIDEND POLICY                                                                                                                                        | 19
|RECENT
      SALES OF UNREGISTERED SECURITIES                                                                                                          | 21
|ITEM 6: MANAGEMENT'S DISCUSSION
      AND ANALYSIS OR PLAN OF OPERATIONS                                                                               | 22
|LIQUIDITY AND CAPITAL RESOURCES                                                                                                                        | 24
|ITEM 7. FINANCIAL STATEMENTS                                                                                                                           | 25
|ITEM 8. CHANGES IN AND
      DISAGREEEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                                    | 25
|ITEM 8A. CONTROLS AND PROCEDURES.                                                                                                                      | 25
|ITEM 8B. OTHER INFORMATION.                                                                                                                            | 26
|None.                                                                                                                                                  | 26
|PART III                                                                                                                                               | 27
|ITEM 9. DIRECTORS, EXECUTIVE
      OFFICERS, PROMOTERS CONTROL PERSONS, AND   CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. | 27
|ITEM 10. EXECUTIVE
      COMPENSATION                                                                                                                  | 30
|ITEM 11. SECURITY OWNERSHIP
      OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                          | 32
|ITEM 12. CERTAIN RELATIONSHIPS
      AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                                               | 34
|ITEM 13. EXHIBITS.                                                                                                                                     | 36
|ITEM 14. PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.                                                                                                 | 37
|SIGNATURES                                                                                                                                             | 39

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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 Energy") which holds approximately 9.6% of the common shares
of REGI. Rand Energy is controlled 51% by Reg Technologies Inc., a publicly held
British Columbia corporation ("Reg Tech"). Reg Tech holds approximately 12% of
the common shares of REGI.

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" or RadMax / Rand Cam), which is a variation of the
Rand Cam Rotary Engine, an axial vane rotary engine ("Original Engine"). The
worldwide intellectual and marketing rights to the RC/DC Engine, exclusive of
the United States, are held by Reg Tech. The Company owns the U.S. marketing and
intellectual rights and has a project cost sharing agreement, whereby it will
fund 50% of the further development of the RC/DC Engine and Reg Tech will fund
50%.

Our principal offices are located at 240-11780 Hammersmith Way,
Richmond, British Columbia V7A 5E9, Canada. Our telephone number is (604)
278-5996 and our 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.

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 CamTM Direct
Charge 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 Reg Tech. A United States patent was issued for the RC/DC Engine on July 4,

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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, an officer 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-Engine Corp. and James McCann, Reg Tech agreed to acquire a 40%
voting interest in a new corporation to be incorporated to acquire the rights to
the Original Engine. The new corporation was Rand Energy Group Inc. (Rand
Energy). Reg Tech acquired the 40% voting interest in Rand Energy in
consideration of the payment of $250,000.

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

On August 20, 1992, we entered in an agreement with Rand Energy
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 Energy
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 Energy's sole director is
REGIs president. 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
Energy, 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
Energy, Reg Tech and Brian Cherry and an original agreement dated July 30, 1992
between Rand Energy, Reg Tech and Brian Cherry, Cherry agreed to: (a) sell,
transfer and assign to Rand Energy 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.

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 Energy 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 Energy.

We entered into a letter of understanding dated December 13,
1993, with Rand Energy 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

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introduced us to potential customers and licensees. Rand Energy
and Reg Tech 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 have tested the RadMax technology for interested customers
who are wanting a license agreement. To date we have granted an option for a
license for certain applications for a Fortune 100 company who are evaluating
the RadMax design and are currently assisting in the development and testing at
no cost to the Company.

PRODUCTS AND PROJECTS

Rand Cam Technology

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
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.

On January 24, 2006 REGI announced the completion of several
continuous successful combustion tests at 245 RPM on the new version of the Rand
Cam engine. Several spin tests were conducted initially up to 800 RPM on the
new modified version of the Rand Cam engine.

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An insignificant amount of wear on the engine has been
confirmed during the months of December 2005, and January 2006.

Reg Technologies, Inc., together with REGI U.S., Inc., has
tested Rand Cam diesel engine for a generator application for hybrid electric
cars. Additionally, our licensee for the 42 H.P. production model diesel Rand
Cam tested the engine for unmanned aerial applications for the U.S.
military.

Compressor

We contracted Coltec, Inc., a Columbus, Indiana engineering
firm, to fabricate the Rand Cam 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.

A special 3.2 SCFM air compressor was designed and built for a
large fuel cell customer. The customers comments including type of drive motor,
inlet and outlet piping arrangements and mounting considerations were
incorporated and final drawings were prepared.

In January, 2004, testing for the air conditioning compressor
for buses application had commenced by Trans Air Manufacturing. The new manifold
has been installed on the working prototype compressor and pressure testing has
commenced. Trans Air Manufacturing will first perform bench testing to baseline
speed, performance, and power consumption data before designing to install on a
vehicle for real world testing.

Based on the successful completion of the Joint Venture, being
the development and successful testing of a working prototype of the Bus
Compressor, Trans Air shall have the exclusive right and shall use its
reasonable efforts to market, merchandise, sell and exploit the Bus Compressor
within the markets or geographical areas in which Trans Air, in its sole option
and discretion, believes such efforts would be appropriate.

In August 2004, we completed compressor tests which displayed
encouraging results of up to 25 P.S.I. with only 800 R.P.M. The testing for the
compressor was completed on behalf of Trans Air Manufacturing for
air-conditioning in bus applications, and exceeded our expectations. A license
agreement for compressor applications, has not been finalized.

RadMax Rand Cam Technology

In February, 2004 we announced that a REGI licensee for
unmanned vehicle system engines had completed testing of the prototype 42 H.P.
engine. Tests occurred at Adiabatics in Columbus, IN and at the U.S. Navy's test
facility at Patuxent River, MD. The initial test results demonstrated that the
first generation prototype engine generated pressure and temperature. The
licensee has started design of a second generation prototype. The documentation
and one of the completed 42 H.P. Rand Cam(tm) engines have been delivered to
REGI U.S., Inc. as part of the license agreement.

On February 14, 2006 the 125 H.P. RadMax engine was received
by REGI from Radian Milparts and was tested by the Companys rotary engine
specialist. The 125 H.P. RadMax engine is the improved version of the 42 H.P.
RadMax engine, which focused on eliminating leak paths and was designed for
maintainability.

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During 2006, the final modifications, which were successfully
implemented on the 42 H.P Rand Cam, for the 125 H.P. version of the RadMax
engine were completed by Ebco Industries. The 125 H.P. engine was assembled and
tested. The testing consisted of endurance to determine wear and tear, and
maintenance factors /hydrocarbons /calculations and fuel efficiency using a
state-of-the-art computerized fuel injection system. Biodiesel and ethanol
blended fuels will also be utilized in a series of tests.

Further tests lead to several important modifications which
eliminated oil leaks from entering the combustion chamber, and reduced
compression losses.

In January 2007, we completed a statement of work agreement
with an engineering, prototyping, and manufacturing services company to complete
a working model RadMax pump.

The Phase I program was to design, demonstrate, and deliver a
prototype RadMax pump within 16 weeks. The goal for the work program was to
complete a pump suitable for supporting demonstration to potential customers and
to prove that the RadMax pump is a positive displacement device, capable of
processing approximately twice its internal volume every revolution, which means
that a production unit could be half the size and weight of any competitive
unit.

The Phase II program will be to design and demonstrate a
working model RadMax compressor to prove the same efficiency as the RadMax
pump, which will be half the size and weight of any competitive centrifugal
compressor.

On January 30, 2007 we announced the following RadMax product
development status:

- RadMax 125 hp engine design is currently being evaluated through computer
  modeling to determine mechanical, rotational and thermal stress; analysis
  contact forces; and engine resonant frequencies.
- 42 horsepower RadMax engine and compressor prototypes designed and
  concept tested.
- RadMax125 hp engine and pump prototypes designed and concept currently in
  testing stage.
- RadMax 125 hp engine design is currently being scaled to produce other
  sizes of the engine.

Next testing steps include:

- Construction of demonstration prototypes of RadMax
      pump and compressor configurations.
- Computer tests using advanced software for tests of RadMax
      125 hp engine to determine and document:
      Validation of computer modeling
        Engine durability and performance benchmarks
        Engine seals performance
        Engine materials performance and material selection for durability
        Auxiliary engine systems (fuel, cooling, electrical, etc.) requirements.
- Validation of computer modeling
- Engine durability and performance benchmarks
- Engine seals performance
- Engine materials performance and material selection for durability
- Auxiliary engine systems (fuel, cooling, electrical, etc.) requirements.
- After completion of computer analysis, build working
      model prototype of RadMax engines for end users and potential licensees.

On March 14, 2007, we announced RadMax
product development status:

- RadMax®125 hp prototype pump fabrication complete.
    Assembly and testing underway.
- RadMax®125 hp prototype radial shaft seals have been
    integrated to eliminate leakage between rotors and
    cams.

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- RadMax® engine design is currently being scaled to
    produce other sizes of the engine, including
    smaller, air-cooled versions up to 10 horsepower for UAV applications.

Our next testing steps included:

- Performance measurements of prototypes of RadMax
    pump
- Validation of radial shaft seals performance for pump
    and compressor
- Pump durability and performance benchmarking

In July 2007 we completed the pump testing and announced the
  following product development:

- Performance measurements of prototype of RadMax® pump completed.
- Axial Vane Positive Displacement Pump efficiency validated greater than
  80%.
- Proprietary RadMax® radial shaft seals have been qualified for all low
  temperature applications (pumps, compressors).
- Validated ability to run dry, self-prime, and re-acquire prime.
- Measured suction to exceed 20 feet, lift (head) more than 80 feet.
- RadMax® 10-inch diameter prototype compressor fabrication is underway.
- Proprietary material will coat internal surfaces to facilitate safe
  run-dry operation.
- RadMax® Compressor includes many components common to RadMax® Pump, which
  reduces production unit cost.
- RadMax® Compressor designed for any gaseous use (air, refrigerant, carbon
  dioxide, etc.)

Planned testing steps include:

- Performance measurements of prototype RadMax® compressor
- Validation of seals performance for compressor environment
- Compressor durability and performance benchmarking including volume per
  revolution, compression ratio, and temperature increase due to compression.

Our RadMax® technology compressors are one of the most
efficient designed and are an important part of our business model. Validation
of prototype design specifications, during this test period, will allow us to
quickly move forward to negotiate potential revenue opportunities related to
global refrigeration, air conditioning, industrial processes, and portable
compressor applications.

On October 18, 2007, we announced the completion of the
prototype, proof-of-concept pump. This pump is suitable for supporting
demonstration to potential customers. It proves performance that a RadMax Pump
is a positive displacement device, capable of processing approximately twice its
internal volume every revolution. This means that a production unit could have
identical performance with half the size and weight of any competitive unit.
Reduction of weight is a significant performance parameter for all equipment,
directly translating into reduction of energy requirements.

Working with a customer's specifications, a production pump
would include definition of performance goals, which translate into size,
weight, materials, fluid to be pumped, etc. A production pump would require the
design and development of production tooling for lower cost castings (aluminum,
steel, other), or injection molded polymer devices.

Our completed efforts for the prototype RadMax Pump
include the following metrics and results:

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Size: 10-inch diameter Weight: 140 pounds (estimated)
Material: All steel Fluid: Any oil or water Priming: Self-priming
Metrics: Volume per revolution, lift, head Pressure: 500 psi (maximum)
Op Range: 0° C (32° F) to 100° C (212° F) Speed: Up to 5000 RPM

We exhibited our RadMax technology at the SAE (Society of
Automotive Engineers) Commercial Vehicle Engineering Congress & Exhibition,
in Chicago, IL, from October 30 to November 1, 2007. We displayed the latest
RadMax prototype hardware and discussed product development and marketing plans
for RadMax technology devices. The SAE Commercial Vehicle
Engineering Congress and Exhibition is a global assembly of both on and off-road
vehicle customers, engineers, supply managers and executives that allows for the
exchange of cutting edge technological information, high-profile networking and
enhance understanding concerning the issues and challenges facing the commercial
vehicle industry. The event was also held in conjunction with the Powertrain
& Fluid Systems Conference, a gathering of powerplant design engineers and
engine fluid experts.

Subsequent to the year ended April 30, 2008, on May 14, 2008 we
entered into an agreement with a Fortune 1000 company (evaluation company) to
evaluate the RadMax® technology. The agreement covers the evaluation of RadMax®
technology by the evaluation company to determine if the RadMax® technology
meets the evaluation companys requirements for certain commercial and military
market applications.

We granted the evaluation company an option for a period of 90
days after the completion of the evaluation period to execute a Letter of Intent
to exclusively license our Rotary Engine IP on reasonable commercial terms for
certain commercial and military markets. We also granted the evaluation company
the option, for a period of 12 months after the completion of the evaluation
period, to execute a Letter of Intent to non-exclusively license our Rotary
Engine IP on reasonable commercial terms for certain commercial and military
markets.

Rand Cam Generator and Fuel Cell Technology

In April, 2005 we completed several successful, continuous
combustion tests for the Rand Cam engine using gasoline fuel. The series of
tests took place at SNKs facilities, in Richmond, BC, on April 14, 2005, with
starter speed of up to 490 RPM, utilizing a unique vane design that does not
require vane tip seals. Eliminating the need for vane tip seals will reduce the
manufacturing and maintenance costs significantly, therefore, resulting in a
breakthrough with the technology. The Rand Cam engine design will be further
tested for generator and hybrid car applications.

We entered into a Distributors Agreement dated June 29, 2005,
with ANUVU Incorporated with an option to acquire exclusive rights to distribute
the ANUVU Fuel Cell technology for Canada and Europe. Our affiliate, Reg Tech,
paid $200,000 to exercise a portion of the option agreement and acquire the
Canadian rights on behalf of the Company. During the year ended April 30, 2006,
we assigned the distribution rights to Reg Tech and recovered $200,000 of
research and development expenses.

In May 2006, ANUVU commenced production and building of the
fuel cell components. Delivery to Reg Tech was scheduled to begin upon
successful training and export approvals. Due to financial problems, ANUVU
reneged on the agreement.

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Corporate

On May 1, 2006, our shares began trading on the Frankfurt Stock
Exchange under the symbol (RGJ). International Security Identification Number
(ISIN/CUSIP) number is US7589431045. Because the Frankfurt exchange is the
third-largest organized exchange-trading market in the world (just behind the
NYSE and Nasdaq exchanges), in terms of turnover and dealings in securities, we
anticipate a much wider, international market access for our shares. The listing
on the Frankfurt Stock Exchange provides us with increased exposure to worldwide
capital markets and will enable us to attract European institutional and
individual investors to trade our common stock in euros.

In November 2006, the Company's board of directors appointed
Lynn Petersen as Vice President of Marketing for the RadMax / Rand Cam
technology. Mr. Petersen has been involved with marketing management for over 12
years. Most recently he was Marketing Manager for three years at Jetseal, Inc.,
which manufactures high tech seals for aerospace, military, semi conductor, and
nuclear industries. Mr. Petersen will be responsible for managing marketing
activities, and making presentations for the RadMax and Rand Cam technology,
to major potential end users. He will also be researching, defining and
optimizing new business markets for REGI U.S., Inc.

In April, 2007 a wholly-owned US subsidiary, RadMax
Technologies, Inc, a Washington Corporation, was formed with the initial focus
on winning U.S. military contracts for custom versions of RadMax® products, as
well as research and development funding to tailor RadMax® products to meet
specific requirements defined by the U.S. military services. RadMax® products
include RadMax® internal and external combustion diesel engines, RadMax® pumps,
and RadMax® compressors.

James Vandeberg, a director and Chief Financial Officer of REGI
U.S., Inc., was appointed as the new company's president and sole director. The
headquarters for the corporation is located at 601 Union Street, Suite 4500,
Seattle, WA 98101.

On April 30, 2007, the Board of Directors appointed Robert
Grisar as Vice President of Engineering for the RadMax® / Rand Cam technology.
In this role, he will report to James Vandeberg, president of RadMax
Technologies, Inc.

In this position, Mr. Grisar will focus on obtaining commercial
and U.S. military contracts for custom versions of RadMax® products, as well as
research and development funding to tailor RadMax® products to meet specific
requirements by potential end users. RadMax® products include RadMax® internal
and external combustion diesel engines, RadMax® pumps, and RadMax® compressors.

Mr. Grisar has more than 30 years of progressive engineering
experience designing and implementing electronic and mechanical systems for the
US Department of Defense and related agencies. This includes: airborne radar for
fixed and rotary wing aircraft, shipboard-submarine-and torpedo sonar, and
line-of-sight, meteor burst, and satellite communications systems. His
commercial experience includes designing and implementing the user interface and
software for medical imaging and diagnostic systems. Prior, he was responsible
for the Astrospace design, fabrication, test, and implementation of the thermal
protection system for Space Shuttle solid rocket boosters. Most recently, Mr.
Grisar directed MILPARTS (Military Parts Reinvention Network), which continues
to reinvent, produce, and deliver military system repair and spare parts for
legacy defense systems.

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MARKETING

We intend to pursue the development of the RadMax / Rand Cam
technologies by entering into licensing and/or joint venture arrangements with
other larger companies, which have the financial resources to maximize the
potential of the technology.

We expect revenue from license agreements with the potential
end users based on the success of the design from the compressor, pump, and
diesel engine prototypes. Based on successful license or joint venture
agreements, we expect to receive royalties. However, there is no assurance that
the tests will be successful or that we will ever receive any such
royalties.

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 calculated to be smaller, quieter and cost
less to produce and maintain.

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.

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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 Energy 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, 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.

On November 3, 2004 we announced that the Canadian Patent was
issued for the Rand Cam Rotary Engine effective October 5, 2004. The term of
the patent is twenty years from the date of the filing on December 11, 1992.

On November 29, 2004, we announced that a world wide license
agreement, excluding the rights for the United States of America that are held
by REGI U.S., Inc. for the Rand Cam technology was completed with Rand Energy.
Reg Tech agreed to pay a 5% net profit interest and make annual payments of
$50,000. Reg Tech is responsible for 50% of the costs for development and
production of the Rand Cam technology.

In December 2005, we completed an agreement to obtain the
rights to the RadMax technology preliminary patent application, the RadMax
trademark, including study notes, drawings and parts list from Radian Inc.

In exchange for these property rights, we will provide an
unconditional release to Radian for all obligations under the UAV license
agreement dated April 24, 2002 and modified May 14, 2004. Completing this
agreement will allow us to own 100% interest in the rights to the new RadMax
rotary design. Radian agrees to provide all the work completed to date,
including preliminary patent applications and all hardware.

The world wide patents cover Canada and several countries in
Europe, namely, Germany, France, Great Britain, and Italy. Reg Tech, together
with REGI U.S., Inc., is in the process of testing a Rand Cam diesel engine for
a generator application for hybrid electric cars. Additionally, our licensee for
the 42 H.P. production model diesel Rand Cam is currently completing the engine
for unmanned aerial applications for the U.S. military.

Royalty Payments

The August 1992 Agreement calls for us to pay Rand Energy
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-

13

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annually any net profits derived by us from revenue received as
a result of our licensing the Original Engine.

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

Pursuant to the letter of understanding dated December 13,
1993, among us, Rand Energy, 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.

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. These factors raise substantial doubt about our ability to continue
as a going concern. Our ability to emerge from the development stage with
respect to our planned principal business activity is dependent upon our
successful efforts to raise additional equity financing, receive funding from
affiliates and controlling shareholders, and develop a market for our
products.

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

14

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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 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, 2008, of $10,428,687. Our ability to
generate revenues and profits is subject to the risks and uncertainties
encountered by development stage companies.

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

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.

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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. 11,853,311 common shares, not
including currently exercisable options or warrants, are owned by current
insiders representing control of approximately 42.4% 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 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 accurate 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.

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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 RadMax / Rand
Cam Engine and other products is being coordinated and funded by Reg Tech and
REGI U.S., Inc. and funded as to 50% each.

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 RadMax / Rand Cam Engine and
other products.

During the last two fiscal years, we have incurred a total of
$255,724 in research and development expenses. During the past year, development
costs have been assumed by a third party who are evaluating the RadMax
design.

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 one consultant and one employee directly
involved in technical development work on the RadMax / Rand Cam 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 utilize office space in a commercial business park building located in Richmond, British Columbia, Canada, a suburb of Vancouver, shared by a conglomerate of related companies. We do not pay rent for this office space. 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.  In addition, we have access to a facility for research and development leased by Reg Tech.  This facility is also in Richmond, British Columbia, Canada.

17

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On November 13, 2006, the Company entered into a rental agreement for office space in Washington State for a term of one year at a cost of approximately $300 per month.  During 2008, we paid $4,449.50 for rent for the Spokane office.

There are no current plans to purchase or lease any properties
in the near future.

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, 2008, through the
solicitation of proxies or otherwise.

On May 24, 2007, at a special and general meeting of the
shareholders of the Company, the shareholders of the Company approved the
following changes to the Companys articles of incorporation:

- The authorized capital was increased from 50,000,000 shares of common
  stock to 100,000,000 shares of common stock; and
- Reduction of the number of shares required to amend the articles of
  incorporation from two-thirds to a majority.

Additionally John G. Robertson, James L. Vandeberg, and
Jennifer Lorette were elected directors of the Company to hold office until the
next annual meeting of the shareholders and until their successors are elected
and qualified or until they resign or are removed from office.

The shareholders approved Smythe Ratcliffe LLP, Chartered
Accountants as auditor of the Company until the next Annual Meeting of
Shareholders.

The Oregon Secretary of State, Corporation Department, accepted
the amendment as filed May 30, 2007.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

There is a limited public market for our common stock which
currently trades on the OTC Bulletin Board under the symbol "RGUS.OB" where it
has been traded since September 21, 1994. The common stock has traded between
$0.035 and $6.75 per share since that date.

The following table sets forth the high and low bid 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.

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|                               | Bid Price | Asked Price
|------------------------------ | --------- | -----------
|                               | High $    | Low $      
|Quarter Ended July 31, 2006    | 2.58      | 1.17       
|Quarter Ended October 31, 2006 | 2.14      | 0.85       
|Quarter Ended January 31, 2007 | 1.59      | 0.91       
|Quarter Ended April 30, 2007   | 1.51      | 0.91       
|Quarter Ended July 31, 2007    | 1.50      | 1.02       
|Quarter Ended October 31, 2008 | 1.17      | 0.93       
|Quarter Ended January 31, 2008 | 1.18      | 0.68       
|Quarter Ended April 30, 2008   | 1.01      | 0.70       

(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.)

The following table shows the high and low bid prices of our
stock traded on the OTC Bulletin Board during the most recent six months, for
each month as follows:

Bid PriceMonth
    High $
    Low $2008, June
    0.85
    0.752008, May
    0.89
    0.752008, April
    0.88
    0.72008, March
    0.89
    0.752008, February
    1.01
    0.7652008, January
    0.86
    0.691


_________

* All prices are in U.S. dollars.

(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 25, 2008, there were 27,935,824 shares of common stock outstanding, held by 261 shareholders of record.

During the fiscal year ended April 30, 2008, the Company
increased its number of authorized shares without per value to 100,000,000.

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.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information about our common
stock that may be issued upon the exercise of options, warrants and rights under
all of our equity compensation plans as of April 30, 2008.

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Plan Category
    Number of securities to be
      issued upon exercise of outstanding options,
      warrants and rights
    Weighted-average exercise price
      of outstanding options, warrants and rights
      (3)(4)
    Number of securities remaining
      available for future issuance under equity
      compensation plansEquity compensation plans approved by security holders: 1993 Stock Option Plan (as amended December 5, 2000) (1)
      and 2007 Stock Option Plan (2)
    1,839,000
    $1.13
    1,080,000Equity compensation plans not approved by security holders
    N/a
    N/a
    N/a


|(1) | The Company has a Stock Option Plan to issue up to
      2,500,000 shares to certain key directors and employees, approved April
      30, 1993 and amended December 5, 2000. Pursuant to the Plan, the Company
      has granted stock options to certain directors, consultants and
      employees.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                       
|(2) | The Company has a Stock Option Plan to issue up to
      2,000,000 shares to certain key directors and employees, approved April
      12, 2007. Pursuant to the Plan, the Company has granted stock options to
      certain directors, consultants and employees.                                   
|    |                                                                                                                                                                                                                                                                                                       
|(3) | The price reflects the weighted average exercise price of
      those options which are outstanding.                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                       
|(4) | The weighted average exercise price of those options
      which are exercisable (639,000 options) is $0.86.                                                                                                                                                                                          

The Company has a Stock Option Plan to issue up to 2,500,000
shares to certain key directors and employees, approved April 30, 1993 and
amended December 5, 2000. On April 12, 2007 the Company approved the 2007 Stock
Option Plan to issue up to 2,000,000 shares to certain key directors and
employees. Pursuant to the Plans, the Company has granted stock options to
certain directors, consultants and employees.

All options granted by the Company under the 2000 Plan have the
following exercise schedule:

|(i)   | Up to 25% of the option may be exercised at any time
      during the term of the option, such initial exercise is referred to as the
      First Exercise.                     
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                   
|(ii)  | The second 25% of the option may be exercised at any time
      after 90 days from the date of First Exercise, such second exercise is
      referred to as the Second Exercise.
|      |                                                                                                                                                                                   
|(iii) | The third 25% of the option may be exercised at any time
      after 90 days from the date of Second Exercise, such third exercise is
      referred to as the Third Exercise   
|      |                                                                                                                                                                                   
|(iv)  | The fourth and final 25% of the option may be exercised
      at any time after 90 days from the date of the Third Exercise.                                                      
|      |                                                                                                                                                                                   
|(v)   | The options expire sixty months from the date of
      grant.                                                                                                                     

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All options granted to April 30, 2008 by the Company under the
2007 Plan have the following exercise schedule:

|(i)   | Up to 25% of the option may be exercised 90 days after
      the grant of the option.                                               
|----- | ------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                     
|(ii)  | The second 25% of the option may be exercised at any time
      after 1 year and 90 days after the grant of the option.             
|      |                                                                                                                                     
|(iii) | The third 25% of the option may be exercised at any time
      after 2 years and 90 days after the grant of the option.             
|      |                                                                                                                                     
|(iv)  | The fourth and final 25% of the option may be exercised
      at any time after 3 years and 90 days after the grant of the
  option.
|      |                                                                                                                                     
|(v)   | The options expire 60 months from the date of
    grant.                                                                            

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 3 to our audited financial
statements for the fiscal year ended April 30, 2008 for more information on
recent sales of unregistered securities.

|(a) | On November 17, 2006, the Company entered into a
      Securities Purchase Agreement, whereby an investor agreed to purchase up
      to $10,000,000 of the Companys common stock over a term of 36 months at
      the Companys discretion. Each purchase will be for a minimum of $150,000
      and up to a maximum of the lesser of: $750,000, or 200% of the average
      weighted volume for the Companys common stock for the 20 trading days
      prior to the date of purchase. Each purchase will be at a 15% discount to
      the market price of the Companys common stock over the 10 trading days
      prior to the purchase.                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In connection with the equity line of credit, the Company
      issued to the investor a warrant (Investor warrant) to purchase
      1,000,000 shares of the Companys common stock at $1.30 per share (the
      Exercise Price) for 5 years, and to an agent a warrant (Placement
      warrant) to purchase 640,000 shares of the Companys common stock at
      $1.30 per share for 5 years. If the Company fails to register the shares
      issuable upon the exercise of the Investor or Placement warrant, the
      holder is entitled to exercise the warrant and receive, for no
      consideration, a certificate equal to the number of shares obtained by
      subtracting the Exercise Price of the warrant for the volume weighted
      average price on the trading day immediately preceding the date of such
      election and multiplying that amount by the number of shares issuable upon
      the exercise of the warrant.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company filed an SB-2 Registration Statement with the
      United States Securities and Exchange Commission that was declared
      effective February 9, 2007, to register shares of common stock potentially
      issuable under this equity line of credit (6,160,000 shares) and the
      related warrants (1,640,000 shares).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Pursuant to the agreement, if the Company issues any
      common stock, or rights to acquire common stock at a price less than the
      Exercise Price, the Exercise Price will be adjusted to the lower price. In
      addition, the number of shares issuable will be increased such that the
      aggregate exercise price after adjustment is equal to the aggregate
      exercise price prior to adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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|    | Subsequent to the issuance of the warrants, the Company
      completed an equity financing at $1 per share. The issuance of the
      Companys common shares lowered the Exercise Price of the Investor
      warrants to $1 and increased the number of shares issuable upon exercise
      of the warrants to 2,132,000 shares, of which 73,000 have been exercised.
      The Company recognized the change in fair value of the warrants of
      $222,681 as share issuance costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(b) | During the fiscal year ended April 30, 2008, the Company
      issued 86,666 shares at $1 per share upon the exercise of warrants for
      proceeds of $86,666. This offering was exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended (the "Act"). Each
      certificate representing securities issued to the investors bears a legend
      restricting transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(c) | During the fiscal year ended April 30, 2008, the Company
      issued 12,500 shares at $0.80 per share upon the exercise of warrants for
      proceeds of $10,000. This offering was exempt from registration under
      Section 4(2) of the Securities Act of 1933, as amended (the "Act"). Each
      certificate representing securities issued to the investors bears a legend
      restricting transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(d) | During the fiscal year ended April 30, 2008, the Company
      issued 833,950 units at $1 per unit pursuant to a private placement for
      cash proceeds of $786,780, net of issue costs of $47,170. Each unit
      consists of one common share and one warrant. Each warrant enables the
      holder to purchase one additional share at an exercise price of $1.50 per
      share for five years after closing date. This offering was exempt from
      registration under Rule 506 and Section 4(2) of the Securities Act of
      1933, as amended (the "Act"). Each certificate representing securities
      issued to the investors in this private placement bears a legend
      restricting transfer. In addition, if the exemptions under Rule 506 under
      and Section 4(2) of the Act are not available, the sales, which were all
      to non-U.S. residents, were exempt pursuant to Regulation S under the
      Act.

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

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

PLAN OF OPERATIONS

We were organized under the laws of the State of Oregon on July
27, 1992. Our principal business operations are conducted in British Columbia,
Canada.

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.

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 $10,428,687 and further losses are
expected until we complete a licensing agreement with a manufacturer and
reseller. At April 30, 2008, we had working capital deficiency of $269,856. Our
only assets are cash totaling $7,645, and prepaid expenses, totaling $872. These
factors raise substantial doubt about our

22

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

Results of operations for the year ended April 30, 2008 ("2008”) compared to the year ended April 30, 2007 ("2007")

There were no revenues from product licensing during 2008 and
2007.

The Company had a net loss of $1,236,583 in 2008, compared to a
net loss of $1,413,294 in 2007. The decrease in 2008 was mainly due to a
decrease in investor relations of $119,803 and a decrease in professional fees
of $44,963.

Our advertising expenses decreased by $64,554 to $40,758 in
2008 as compared to $105,312 in 2007. Consulting fees decreased by $38,103 to
$136,113 in 2008 compared to $174,216 in 2007. Transfer agent and filing fees
increased to $29,613 in 2008 compared to $10,667, while travel and accommodation
increased by $20,364 to $96,776 in 2008 compared to $76,412 in 2007.

Wages and benefits increased by $69,132 to $165,752 in 2008 compared to $96,620 in 2007 due to an increase in wages, while stock-based compensation decreased by $19,041 to $241,528 from $260,569 in 2007. Project consulting increased by $28,494 to $95,250 in 2008 compared to $66,756 in 2007, while prototype design and construction decreased by $18,351 to $32,821 in 2008 from $51,172 in 2007 due the majority of prototype construction and testing costs continue to be borne by potential licensees and manufactures. The overall decreases were due to decreased operations.

During the year ended April 30, 2008, the Company extended the
term on 75,000 options for a further two years. The fair value of the original
options was deducted from the fair value of the modified options for a
difference of $4,000. During the fiscal year ended April 30, 2008, $1,000 (April
30, 2007, - $nil) stock-based compensation expense was charged to operations for
the vested incremental increase in the fair value of these stock options. The
balance of $3,000 of unrecognized compensation cost related to the non-vested
stock options held by the employees will be recognized over future periods.

During the fiscal year ended April 30, 2008, the Company
granted 25,000 options in accordance with the terms of the Option Agreement as
described in Note 3 of the financial statements. During the fiscal year ended
April 30, 2008, $241,528 stock-based compensation expense was charged to
operations, and the balance of $1,044,431 of unrecognized compensation cost
related to the non-vested stock options will be recognized over future periods
as they vest.

As at April 30, 2008, the Company owed related companies
controlled or significantly influenced by the President of the Company $151,434
(April 30, 2007 - $248,253) comprised of advances and/or expenses paid on behalf
of the Company. The amounts are non-interest bearing, unsecured and without
specific terms of repayment.

We had a basic and diluted loss of $0.04 per share in 2008 compared to a basic and diluted net loss per share of $0.05 for 2007.

23

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LIQUIDITY AND CAPITAL RESOURCES

During 2008, we financed our operations mainly through proceeds
of $98,791 from the exercise of stock options and share purchase warrants, as
well as net proceeds of $537,753 from a private placement offering.

During 2008, we raised $571,250 (2007 - $262,700) pursuant to a
private placement of 833,950 units. The Units were issued at a purchase price of
US$1 per Unit for cash proceeds of $537,753 (2007 - $262,700), net of issue
costs of $33,497. Each Unit consisted of one share common stock of the Company
and one warrant. Each warrant may be exercised to enable the investor to
purchase one additional share of Common Stock at US$1.50 within five years of
the date of issuance to the purchaser. Also during 2008, we raised $12,125 from
the exercise of 38,500 stock options, and $86,666 (2007 - $10,000) from the
exercise of 99,166 share purchase warrants. 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.

During 2007, we raised $120,000 pursuant to a private placement
of 120,000 units. The Units were issued at a purchase price of US$1 per Unit for
cash proceeds of $116,496, net of issue costs of $3,504. Each Unit consisted of
one share common stock of the Company and one warrant. Each warrant may be
exercised to enable the investor to purchase one additional share of Common
Stock at US$1.50 within five years of the date of issuance to the purchaser.
Also during 2007, we raised $143,938 from the exercise of 643,500 stock options,
and $217,666 from the exercise of 268,833 share purchase warrants.

We received funding in 2008 from our affiliated companies
(common officers and directors) and our 9% shareholder, Rand Energy and Reg
Tech, the controlling shareholder of Rand Energy. The total amount owing to
related parties is $151,434 or 54% of total current liabilities as at April 30,
2008. The balances owing to related parties are non-interest bearing, unsecured
and repayable on demand. Our affiliated companies have indicated that they will
not be demanding repayment of these funds during the next fiscal year and will
advance, or pay expenses on behalf of the Company if further funds are
needed.

As at April 30, 2008, we had working capital deficiency of
$269,856. We receive interim support from our ultimate parent company and will
raise additional funds from equity financing which was negotiated. We also plan
to raise funds through loans from a major shareholder (Rand Energy). Rand Energy
owns 2,532,816 shares and plans to sell shares as needed to meet our ongoing
funding requirements if traditional equity sources of financing prove to be
insufficient.

The audited financial statements have been prepared assuming
that the Company will continue as a going-concern. As discussed in note 1 to the
financial statements, the Company has no revenues and limited capital, which
together raise substantial doubt about its ability to continue as a
going-concern. Management plans in regard to these matters are also described in
note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

The Company plans to raise funds through loans from Rand
Energy. Further, Rand Energy owns approximately 9% of the shares of the Company,
and may sell shares as needed to meet ongoing funding requirements if
traditional equity sources of financing prove to be insufficient. The Company
also receives interim support from affiliated companies and plans to raise
additional capital through debt and/or equity financings. The Company has an
equity line of credit whereby the investor agreed to purchase up to $10,000,000
of the Companys common stock. (See Note 3(e) to our financial statements). The
Company may also raise additional funds through the exercise of warrants and
stock options, if exercised.

24

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We have been successful in the past in acquiring capital
through the issuance of shares of our Common Stock, and through advances from
related parties.

We anticipate that our cash requirements for the fiscal year
ending April 30, 2009 will remain consistent with those for the fiscal year
ended April 30, 2008.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are included and begin immediately
following the signature page to this report. See Item 13 for a list of the
financial statements and financial statement schedules included.

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

None.

ITEM 8A. CONTROLS AND PROCEDURES.

We carried out an evaluation, under the supervision and with
the participation of our management, including the President (our principal
executive officer), and the Chief Financial Officer (our principal financial
officer), of the effectiveness of the design and operation of our disclosure
controls and procedures [as defined in the Exchange Act Rule 13a-15(e)] as of
the end of the period covered by this report (the evaluation date). Based upon
the evaluation of the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report, our President and Chief
Financial Officer have concluded that, as of such date, the disclosure controls
and procedures were effective at the reasonable assurance level with respect to
such disclosure controls and procedures being designed to ensure that
information relating to the Registrant required to be disclosed by the Company
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC. Additionally, our officers concluded that our disclosure controls
and procedures are effective to ensure that information required to be disclosed
in the reports that the Company files or submits under the Exchange Act is
accumulated and communicated to our management, including our President, and our
Chief Financial Officer, to allow timely decisions regarding required
disclosure.

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

There was no significant change in our internal control over
financial reporting that occurred during our most recently completed fiscal year
ended April 30, 2008 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Nor were there
any significant deficiencies or material weaknesses in our internal controls
requiring corrective actions.

25

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Managements Report on Internal Control Over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those
policies and procedures that: (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of its
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in
the effectiveness of any system of internal control, and accordingly, even
effective internal control can provide only reasonable assurance with respect to
financial statement preparation and may not prevent or detect material
misstatements. In addition, effective internal control at a point in time may
become ineffective in future periods because of changes in conditions or due to
deterioration in the degree of compliance with our established policies and
procedures.

A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in there being a more than remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

Under the supervision and with the participation of our
President and Chief Financial Officer, management conducted an evaluation of the
effectiveness of our internal control over financial reporting, as of the
evaluation date, based on the framework set forth in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on its evaluation under this framework, management
concluded that our internal control over financial reporting was effective as of
the evaluation date.

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

This Annual Report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report in this annual report.

ITEM 8B. OTHER INFORMATION.

None.

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PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS CONTROL
PERSONS, AND CORPORATE GOVERNANCE; 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 | 67  | Director, Chairman of the Board
      of Directors, President and Chief Executive Officer
|Jennifer Lorette  | 36  | Director, Vice-President                                                                 
|James Vandeberg   | 64  | Director and Chief Operating
      Officer and Chief Financial Officer                   
|Brian Cherry      | 68  | Vice President, Rand Cam Engine Technology
      Projects                               
|Lynn Petersen     | 57  | Vice President of Marketing for
      the RadMax / Rand Cam Technology                 
|Robert Grisar     | 61  | Vice President, Engineering for the RadMax /
      Rand Cam Technology                 

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 TSX 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 Reg Technologies Inc. owns the worldwide rights exclusive of the
U.S. Mr. Robertson is a Director and President and Secretary of Rand Energy
Group Inc. Mr. Robertson is President, Principal Executive Officer and a member
of the Board of Directors of IAS 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
which is currently inactive, and its predecessor. He is also the President and
Founder of Teryl Resources Corp., a public company trading on the TSX Venture
Exchange involved in gold, diamond, and oil and gas exploration. He

27

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is also President of Linux Gold Corp., a public company trading
on the OTC Bulletin Board. Since May 1977 Mr. Robertson has been President and a
member of the Board of Directors of SMR Investments Ltd., a British Columbia
corporation engaged in the business of management and investment consulting.

Jennifer Lorette - Vice President

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 2001 she has also been a director for
Reg Technologies, Inc., a British Columbia corporation listed on the TSX 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 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 which is currently inactive, and its predecessor.
Since November 2000 Ms. Lorette has also been a director of Linux Gold Corp.
Since February 2001 Ms. Lorette has been a director of Teryl Resources Corp., a
public company trading on the TSX Venture Exchange involved in gold, and oil and
gas exploration.

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

Mr. Vandeberg became a Director of the Company in November 1998
and its Chief Operating Officer in August 1999 and its Chief Financial Officer
on January 9, 2006. Mr. Vandeberg is an attorney in Seattle, Washington. He has
served as our legal counsel since 1996. Mr. Vandeberg's practice focuses on the
corporate finance area, with an emphasis on securities and acquisitions. Mr.
Vandeberg was previously general counsel and secretary of two NYSE companies
and. He is a director of Information-Highway.com, Inc., a Florida corporation
traded on the Pink Sheets. He is also a director of IAS Communications Inc. an
Oregon corporation traded on the OTC bulletin board. Mr. Vandeberg is also a
director of Reg Technologies Inc., which is traded on the OTC bulletin board.
Mr. Vandeberg is also a director of ASAP Expo Inc. since 2005. 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.

Brian Cherry - Vice President, Rand Cam Engine Technology
Projects

Mr. Cherry was Vice President and a Director of the Company
since its inception in July 1992, until January 2001 when he left the Company to
pursue personal interests. Mr. Cherry was appointed Vice President, Rand Cam
Engine Technology Projects in June 2004. He has spearheaded the development of
the next-generation RadMax® technology. He has earlier patented prior versions
of the technology in 1996. He is currently the project manager in charge of
developing a RadMax® electric generator for hybrid electric vehicles and for
residential uses. Mr. Cherry oversees and prepares submissions of new patent
applications for the RadMax® technology.

Lynn Petersen  Vice President, Marketing for the RadMax /
Rand Cam Technology

Mr. Petersen has over 25 years leadership experience in sales,
marketing, market research and business development management. An accomplished
marketer and new product strategist, his

28

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vision and expertise has driven notable growth in the
industrial chemical, computer and packaging equipment industries. Most recently
Mr. Petersen was Marketing Manager for three years at Jetseal, Inc., which
manufactures high tech seals for the aerospace, military, semi conductor, and
nuclear industries. Mr. Petersen received his Bachelor of Science degree in
Mechanized Agriculture, and Master of Science degree in Economics and
Agricultural Engineering from South Dakota State University. He was honorably
discharged from the USAR where he served as an Ordnance Corp officer for 14
years. Mr. Petersen is responsible for managing marketing and business
development activities, and making presentations for the RadMax® and Rand Cam
technology to major potential end users. He is also responsible for researching,
defining and optimizing new business markets for REGI U.S., Inc.

Robert Grisar  Vice President, Engineering for the RadMax /
Rand Cam Technology

Mr. Grisar was appointed Vice President, Engineering for the
RadMax® / Rand Cam technology. He has more than 30 years of progressive
engineering experience designing and implementing electronic and mechanical
systems for the US Department of Defense and related agencies. This includes:
airborne radar for fixed and rotary wing aircraft, shipboard-submarine-and
torpedo sonar, and line-of-sight, meteor burst, and satellite communications
systems. His commercial experience includes designing and implementing the user
interface and software for medical imaging and diagnostic systems. Prior, he was
responsible for the Astrospace design, fabrication, test, and implementation of
the thermal protection system for Space Shuttle solid rocket boosters. Most
recently, Mr. Grisar directed MILPARTS (Military Parts Reinvention Network),
which continues to reinvent, produce, and deliver military system repair and
spare parts for legacy defense systems.

Audit Committee

Our Audit Committee consists of the entire Board of Directors
of the Company. None of the members of the Audit Committee are independent
directors.

We do not currently have a financial expert in our audit committee due to our relatively small size.  In 2008, we relied upon the services of a chartered accounting firm in Vancouver, BC, Canada, to prepare our interim unaudited quarterly consolidated financial statements. Also, we retained the services of Smythe Ratcliffe LLP, Chartered Accountants to perform the audit on our year-end consolidated financial statements and review of our quarterly consolidated financial statements.

Moreover, the audit committee is comprised of seasoned business
professionals, whereby two members each have over 25 years of experience in the
investment business, are board members of several corporations and one of the
members is an attorney whose practice focuses on the corporate finance area,
with an emphasis on securities and acquisitions.

On these bases, we believe that the audit committee has
adequate resources available to it when financial expertise and advice are
necessary.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to us,
other than Messrs. Vandeberg, Cherry, Petersen and Grisar 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.

29

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Code of Ethics

The Board of Directors does not have any committees. Our Board
of Directors has not adopted a code of ethics that applies to our principal
executive officer, principal financial officer. We believe that due to the small
size of the Company and existing systems we have in place that there is no real
benefit to having a formal code of ethics.

Directors are subject to the laws of the State of Oregon,
whereby they are required to act honestly, in good faith and in the best
interests of the Company.

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the aggregate cash compensation
paid for services rendered to the Company during the last three fiscal years by
the Company's Chief Executive Officer and the Company's most highly compensated
executive officers who served as such at the end of the last fiscal year. No
executive officer had an annual salary and bonus in excess of $100,000 during
such year.

Name and Principal Position
    Year
    Salary ($)
    Bonus ($)
    Stock Awards ($)
    Option Awards ($) (1)
    Non-Equity Incentive Plan
      Compensation ($)
    Nonqualified Deferred Compensation
      ($)
    All Other Compensa- tion ($)
    Total ($)John G. Robertson 
        President, Chief Executive Officer
    2008 2007 
        2006
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil 168,307 Nil
    Nil Nil Nil
    Nil Nil Nil
    30,000 30,000 30,000(2)
    Nil Nil Nil


(1) This column represents the dollar amount recognized for
financial statement reporting purposes with respect to the year ended April 30,
2008 for the fair value of stock options granted to each of our named executive
officers calculated in accordance with SFAS 123R. For additional information on
the valuation assumptions with respect to these option grants, refer to Note3 of
our financial statements and related notes. These amounts reflect only our
accounting expense for these option grants and do not correspond to the actual
value that will be recognized by our named executive officers. See the
Outstanding Equity Awards at April 30, 2008 table below for more information on
options held by the named executive officers.

(2) 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. Mr.
Robertson is a trustee of the Robertson Family Trust.

We entered into the following contracts with related parties.
Related parties consist of companies controlled or significantly influenced by
the President of the Company.

| | (a) | On March 31, 1994, we entered into a management agreement
      with Access Information Services, Inc., a Washington corporation, which is
      owned and controlled by the Robertson Family Trust. A management fee of
      $2,500 per month is accrued for the provision certain management,
      administrative, and financial services
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                              
| | (b) | On November 27, 2006, a company with common directors
      transferred 20,500 shares it holds of the Company to a consultant pursuant
      to a consulting agreement for services valued at
$25,000.                                                                                                                                       

30

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| | (c) | The Company entered into an agreement with a professional
      law firm (the Law Firm) in which a partner of the firm is an Officer and
      Director of the Company. The Company agreed to pay a cash fee equal to 5%
      of any financings with parties introduced to the Company by the Law Firm.
      The Company also agreed to pay an equity fee equal to 5% of the equity
      issued by the Company to parties introduced by the Law Firm, in the form
      of options, warrants or common stock. During the year ended April 30,
      2008, fees in the aggregate of $62,459 (2007 $116,598) for legal services
      have been paid to the Law Firm.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the year ended April 30,
2008:

| | (d) | the value of consulting services of $90,000 (2007 -
      $90,000) was contributed by the President, CEO and Director of the
      Company, charged to operations and treated as donated capital.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                  
| | (e) | the value of consulting services of $30,000 (2007 -
      $30,000) was contributed by the Vice President and Director of the
      Company, charged to operations and treated as donated capital.
| |     |                                                                                                                                                                                                  
| | (f) | the value of consulting services of $30,000 (2007 -
      $30,000) was contributed by the CFO, COO and Director of the Company,
      charged to operations and treated as donated capital.      
| |     |                                                                                                                                                                                                  
| | (g) | project management fees of $30,000 (2007 - $30,000) were
      paid to a company having common officers and
directors.                                                                           

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.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth information about outstanding
equity awards held by our named executive officers as of April 30, 2008.

Option Awards (1)

Name
    Number of Securities Underlying
      Unexercised Options granted (#) Exercisable
    Number of Securities Underlying
      Unexercised Options granted (#) Unexercisable
    Equity Incentive Plan Awards:
      Number of Securities Underlying Unexercised Unearned
      Options (#)
    Option Exercise Price ($)
    Option Expiration dateJohn Robertson
    Nil
    500,000
    Nil
    $1.30
    April 12, 2012


|(1) | There were no Stock Awards
      awarded to the named executive officers. Accordingly, this disclosure has
      been omitted.
|--- | ------------------------------------------------------------------------------------------------------------------------------

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Compensation of Directors

During the most recently completed financial year, the Company
paid no cash compensation (including salaries, fees, directors fees,
commissions, bonuses paid for services rendered during the most recently
completed fiscal year, bonuses paid during the most recently completed fiscal
year for services rendered in a previous year, and any compensation other than
bonuses earned during the most recently completed fiscal year the payment of
which was deferred) to the Directors for services rendered.

Executive Officers of the Company, who also act as Directors of
the Company, do not receive any additional compensation for services rendered in
such capacity other than as paid by the Company to such Executive Officers in
their capacity as Executive Officers (see Compensation of Executive
Officers).

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 AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of July 11, 2008, our
outstanding common stock owned of record or beneficially by each person who
owned of record, or was known by us to own beneficially, more than 5% of our
common stock and the name and shareholdings of each Executive Officer and
Director and all Executive Officers and Directors as a group. A person is deemed
to be the beneficial owner of securities that can be acquired by such person
within 60 days from the date of this report upon the exercise of warrants or
options. Each beneficial owner's percentage ownership is determined by assuming
that options that are held by such person and which are exercisable within 60
days from the date are exercised.

|Name                                                                                         | Shares Owned | Percentage of
|-------------------------------------------------------------------------------------------- | ------------ | -------------
|                                                                                             |              | Shares Owned 
|John G. Robertson, Chairman of the Board of Directors,
      President, Chief                |              |              
|Executive Officer and Director (1) (2)
      (3)(5)(10)(11)                                  | 12,200,911   | 43.68%       
|James McCann (4)                                                                             | 2,670,741    | 9.56%        
|Rand Energy Group Inc. (5)                                                                   | 2,670,741    | 9.56%        
|Jennifer Lorette, Vice President and Director (6)                                            | 255,400      | *            
|James Vandeberg, Chief Operating Officer
      and Director (7)                              | 175,000      | *            
|Brian Cherry, Vice President of the Rand Cam Engine
      Technology Projects               | Nil          | *            
|Lynn Petersen, Vice President of Marketing
      for the RadMax / Rand Cam technology (8)  | 105,000      | *            
|Robert Grisar Vice President of Engineering for the RadMax®
      / Rand Cam technology (9) | 200,000      | **           
|Reg Technologies Inc.(10)                                                                    | 3,320,000    | 11.89%       
|Rainbow Networks Inc.(11)                                                                    | 2,429,800    | 8.70%        
|ALL EXECUTIVE OFFICERS & DIRECTORS AS A
      GROUP (FOUR INDIVIDUALS)                       | 12,631,311   | 45.22%       

*Less than one percent of the issued and outstanding on July 25, 2008, which was 27,935,824

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

32

---

(1) This individual may be deemed to be a "parent or founder"
of REGI as that term is defined in the Rules and Regulations promulgated under
the Securities Act of 1933.

(2) Includes 2,670,741 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
500,000 options. Mr. Robertson's address is the same as the Company's.

(3) Includes 2,747,720 common shares registered in the name of
Access Information Services, Ltd., a corporation controlled by the Robertson
Family Trust, and 500,000 options. Mr. Robertson is one of three trustees of the
Robertson Family Trust, which acts by the majority vote of the three trustees.
Mr. Robertson disclaims beneficial ownership of the shares owned or controlled
by the Robertson Family Trust. Mr. Robertson's address is the same as REGIs
address.

(4) Includes 2,670,741 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 Tech and 49% by
Rand Cam-Engine Corp. Under Rule 13d-3 under the Securities Exchange Act of
1934, both Reg Tech and Rand Cam-Engine Corp. could be considered the beneficial
owner of the 2,670,741 shares registered in the name of Rand Energy Group Inc.
Mr. Robertson is the sole director of Rand Energy Group Inc.

SMR Investment Ltd., a British Columbia corporation, holds a
controlling interest in Reg Tech. 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. Accordingly, in
Note (2) above, beneficial ownership of the 2,670,741 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 controlled by James McCann and by several other shareholders in minor
interest. 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 225,000. Ms. Lorette's address is the same as the
Company's.

(7) Includes 100,000 options.. Mr. Vandeberg's address is 601
Union Street, Suite 4500, Seattle, WA 98101.

(8) Includes 100,000 options. Mr. Petersen's address is 665 N.
Riverpoint Blvd., Suite 438, Spokane, WA 99202-1648.

(9) Includes 158,000 options. Mr. Grisar's address is 8543
Hemlock Ridge Drive, Kirtland, OH 44094 USA.

(10) Includes 3,320,000 shares registered in the name of Reg
Technologies Inc. Reg Technologies Inc. is a publicly held British Columbia
corporation. Rand Energy Group Inc., holds approximately 11% of the common
shares of REGI, which, in turn, is controlled 51% by Reg

33

---

Technologies Inc. Mr. Robertson and Ms. Lorette are both
directors and officers 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 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 3,320,000 shares registered in the name of Reg Technologies 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.

(11) Includes 2,747,720 common shares registered in the name of
Rainbow Networks Inc., a British Columbia company controlled by Mr. Robertson,
who is sole director, president and secretary. Mr. Robertson disclaims
beneficial ownership of the shares owned or controlled by Rainbow Networks. Mr.
Robertson's address is the same as REGIs address.

CHANGES IN CONTROL

We know of no arrangements the operation of which may result in
a change of our control.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE

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

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

In the April 1993 Agreement, an amendment to a previous
Amendment Agreement dated November 23, 1992, between Rand Energy, Reg Tech and
Brian Cherry (a former officer and director) and an original agreement dated
July 30, 1992, between Rand Energy, Reg Tech and Brian Cherry, Cherry agreed to:
(a) sell, transfer and assign to Rand Energy all his right, title and interest
in and to the technology related to the 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 Energy a continuing royalty of 5% of the net profits derived from
the Technology by us and (b) to pay to Brian Cherry a continuing royalty of 1%
of the net profits derived from the Technology by us.

34

---

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

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

We are controlled by Rand Energy Group Inc., a privately held
British Columbia corporation 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 Investments 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 majority-owned and controlled by James McCann and the balance by
several other shareholders.

In April, 2007 a wholly-owned US subsidiary, RadMax
Technologies, Inc, a Washington Corporation, was formed with the initial
focus on winning U.S. military contracts for custom versions of RadMax®
products, as well as research and development funding to tailor RadMax® products
to meet specific requirements defined by the U.S. military services. RadMax®
products include RadMax® internal and external combustion diesel engines,
RadMax® pumps, and RadMax® compressors.

James Vandeberg, a director and Chief Financial Officer of REGI
U.S., Inc., was been appointed as the new company's president and sole director.
The headquarters for the corporation is located at 601 Union Street, Suite 4500,
Seattle, WA 98101.

The world-wide marketing and intellectual rights, other than in
the U.S., are held by Reg Technologies, Inc. which owns 12% of the Companys
issued, and outstanding, stock and controlled the Company by way of a voting
trust arrangement. The voting trust agreement was cancelled on April 8,
2008.

Director Independence

Our common stock is traded on the over-the-counter bulletin
board. Therefore, the company is not required to have independent members of the
board of directors.

35

---

ITEM 13. EXHIBITS.

Number
      Description3.1
      Articles of Incorporation
      (1)3.2
      Article of Amendment changing name to REGI U.S.,
        Inc.
      (2)3.3
      By-laws
      (1)3.4
      Articles of Amendment Increasing Authorized Capital
        to 50,000,000 December 2003
      (7)3.5
      Articles of Amendment
        Increasing Authorized Capital to 100,000,000 May 2007
      (8)4.1
      Specimen Share Certificate
      (1)4.2
      Specimen Warrant Certificate
      (1)10.1
      Consulting Agreement, dated December 1, 1999,
        between REGI U.S., Inc. and Patrick Badgley
      (3)10.2
      Special Service Proposal, dated December 21,
        1999, between REGI U.S. and ColTec, Inc.
      (3)10.3
      Agreement between ColTec and REGI dated October
        2000
      (4)10.4
      Agreement between REGI and Advanced Ceramics
        Research dated March 20, 2002
      (5)10.5
      License Agreement between Rand Energy Group,
        Inc., and Reg Technologies, Inc. REGI U.S., Inc. and Radian Incorporated
        made as of April 24, 2002
      (5)10.6
      Agreement between REGI U.S., Inc. and Rotary
        Power Generation, Incorporated made as of April 22, 2002
      (6)10.7
      Amendment to Agreement between REGI U.S., Inc.
        and Rotary Power Generation, Incorporated made as of April 2, 2003
      (6)21.1
      List of Subsidiaries
      (8)23.1
      Consent of Independent
        Auditors (Smythe Ratcliffe LLP)
      (8)23.2
      Consent of Independent
        Auditors (Manning Elliott LLP)
      (8)31.1
      Certification of Chief
        Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of
        2002
      (8)31.2
      Certification of Chief
        Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of
        2002
      (8)32.1
      Certification of John
        G. Robertson, President and Chief Executive Officer (Principal Executive
        Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002
      (8)32.2
      Certification of James
        Vandeberg, Chief Operating Officer and Chief Financial  Officer
        (Principal Financial Officer), pursuant to 18 U.S.C. Section 1350, as 
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
      (8)


(1) Incorporated by reference from Form 10-SB Registration
Statement filed April 26, 1994. (2) Incorporated by reference from 10-Q
Report for the quarter ended 7-30-94.(3) Incorporated by reference from our
10-KSB for the fiscal year ended April 30, 2000. (4) Incorporated by
reference from our 10-KSB for the fiscal year ended April 30, 2001 (5)
Incorporated by reference from our 10-KSB for the fiscal year ended April 30,
2002 (6) Incorporated by reference from our 10-KSB for the fiscal year ended
April 30, 2003 (7) Incorporated by reference from our 10-KSB for the fiscal
year ended April 30, 2007 (8) Incorporated herein.

Report of Independent Registered Public Accounting Firm (Smythe Ratcliffe LLP) 
Consolidated Balance Sheets 
Consolidated Statements of Operations 
Consolidated Statement of Stockholders' Equity (Deficit)
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

36

---

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table discloses accounting fees and services which we paid to our auditor, Smythe Ratcliffe LLP during 2008 and 2007:

2008
    2007Type of Services Rendered
    Fiscal Year
    Fiscal Year(a) Audit Fees
    $ 40,443
    $ 43,460(b) Audit-Related Fees
    $Nil
    $Nil(c) Tax Fees
    $Nil
    $Nil(d) All Other Fees
    $Nil
    $Nil Our Audit Committee consists of the entire Board of Directors
of the Company and is comprised of seasoned business professionals, whereby two
members each have over 25 years of experience in the investment business, are
board members of several corporations and one of the members is an attorney
whose practice focuses on the corporate finance area, with an emphasis on
securities and acquisitions. On this basis, we believe that the audit committee
has adequate resources available to it when financial expertise and advice are
necessary. Despite being comprised of our entire Board of Directors, our
Audit Committee assists the Board in fulfilling its responsibilities relating to
the Companys corporate accounting and reporting practices. The Audit Committee
is responsible for ensuring that management has established appropriate
processes for monitoring the Companys systems and procedures for financial
reporting and controls, reviewing all financial information in disclosure
documents; monitoring the performance and fees and expenses of the Companys
external auditors and recommending external auditors for appointment by
shareholders. The Audit Committee is also responsible for reviewing the
Companys annual financial statements prior to approval by the Board and release
to the public. Currently the members are John Robertson, James Vandeberg and
Jennifer Lorette. Upon recommendation of our Audit Committee, our board of
directors appointed Smythe Ratcliffe LLP, Chartered Accountants as our principal
accountant to audit our consolidated financial statements for the fiscal year
ended April 30, 2008. In the table above, and the disclosure below, audit fees are
fees billed by the Companys external auditor for services provided in auditing
the Companys annual financial statements for the subject year. Audit-related
fees are fees not included in audit fees that are billed by the auditor for
assurance and related services that are reasonably related to the performance of
the audit or review of the Companys financial statements. Tax fees are fees
billed by the auditor for professional services rendered for tax compliance, tax
advice and tax planning. All other fees are fees billed by the auditor for
products and services not included in the foregoing categories. 37   Audit Fees The aggregate fees billed by Smythe Ratcliffe LLP, Chartered
Accountants for professional services rendered for the audit of our annual
financial statements and review of financial statements included in our Form
10-QSBs or services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements for the fiscal years ended
April 30 2008 and 2007 were $40,443and $43,460, respectively. Audit Related Fees The aggregate fees billed for assurance and related services by
Smythe Ratcliffe LLP, Chartered Accountants, as applicable, relating to the
performance of the audit of our consolidated financial statements for the fiscal
years ended April 30 2008 and 2007, which are not reported under the heading
"Audit Fees" above, were $Nil and $Nil, respectively. Tax Fees For the fiscal years ended April 30 2008 and 2007, the
aggregate fees billed for tax compliance, tax advice and tax planning by Smythe
Ratcliffe LLP, Chartered Accountants, as applicable, were $Nil and $Nil,
respectively. All Other Fees For the fiscal years ended April 30 2008 and 2007, the
aggregate fees billed by Smythe Ratcliffe LLP, Chartered Accountants, as
applicable, for products and services other than the services set out above,
were $Nil and $Nil, respectively. 38   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. RobertsonJohn G. Robertson, PresidentChief Executive Officer and Director Dated: August 7, 2008 In accordance with the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated below. Signature
    Title
    Date/s/ John G. Robertson
    Chairman of the Board,
    August 7, 2008(John G. Robertson)
    President, Chief ExecutiveOfficer and Director/s/ James Vandeberg
    Chief Operating Officer, Chief
    August 7, 2008(James Vandeberg)
    Financial Officer and Director/s/ Jennifer Lorette
    Vice President, Secretary and
    August 7, 2008(Jennifer Lorette)
    Director 39    REGI U.S., Inc.(A Development Stage Company)April 30, 2008(Expressed in U.S. dollars)  IndexReports of Independent
      Registered Public Accounting Firms
    F1 to F-2Consolidated Balance Sheets
    F-3Consolidated Statements
      of Operations
    F-4Consolidated Statements of Stockholders
      Equity (Deficiency)
    F-5 to F-8Consolidated Statements
      of Cash Flows
    F-9Notes to the Consolidated Financial Statements
    F10 to F-20     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE DIRECTORS AND STOCKHOLDERS OF REGI U.S., INC.
  (A Development Stage Company) We have audited the accompanying consolidated balance sheets of REGI U.S., Inc. (A Development Stage Company) as at April 30, 2008 and 2007 and the consolidated statements of operations, stockholders' equity (deficiency) and cash flows for the years ended April 30, 2008 and 2007, and the period from July 27, 1992 (date of inception) to April 30, 2008.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits. The statements of operations, stockholders’ equity (deficiency) and cash flows from July 27, 1992 (date of inception) to April 30, 2005 were audited by other auditors whose report dated August 9, 2005 expressed an unqualified opinion, with an explanatory paragraph discussing the Company’s ability to continue as a going-concern.  Our opinion on the statements of operations, stockholders’ equity (deficiency) and cash flows from inception to April 30, 2008, insofar as it relates to amounts for prior periods through April 30, 2005, is solely based on the reports of other auditors. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at April 30, 2008 and 2007 and the results of its operations and its cash flows for the years ended April 30, 2008 and 2007, and the period from July 27, 1992 (date of inception) to April 30, 2008 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going-concern.  As discussed in Note 1 to the financial statements, the Company has no revenues and limited capital, which together raise substantial doubt about its ability to continue as a going-concern.  Management plans in regard to these matters are also described in Note 1.  These financial statements do not include any adjustments that might result from the outcome of this uncertainty. “Smythe Ratcliffe LLP” (signed) Chartered Accountants Vancouver, British Columbia
  July 18, 2008 7th Floor, Marine Building
      355 Burrard Street, Vancouver, BC 
      Canada V6C 2G8
      Fax: 		                604.688.4675
      Telephone:    	604.687.1231 
      Web:		             SmytheRatcliffe.com F-1     Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of 
  REGI U.S., Inc. (A Development Stage Company) We have audited the statements of operations, cash flows and
  stockholders deficit of REGI U.S., Inc. (A Development Stage Company)
  accumulated from July 27, 1992 (Date of Inception) to April 30, 2005. These
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audit. We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform an audit to obtain reasonable assurance whether the
  financial statements are free of material misstatement. An audit includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management as well as evaluating the overall
  financial statement presentation. We believe that our audit provide a reasonable
  basis for our opinion. In our opinion, the financial statements referred to above present
  fairly, in all material respects, the results of the Companys operations
  and its cash flows accumulated from July 27, 1992 (Date of Inception) to April
  30, 2005, in conformity with accounting principles generally accepted in the
  United States. The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has not generated any revenues and has accumulated
  operating losses since inception. These factors raise substantial doubt about
  the Companys ability to continue as a going concern. Managements
  plans in regard to these matters are also discussed in Note 1. These financial
  statements do not include any adjustments that might result from the outcome
  of these uncertainties. /s/ MANNING ELLIOTT LLP CHARTERED ACCOUNTANTS Vancouver, Canada August 9, 2005 F-2    REGI U.S., Inc.(A Development Stage Company)Consolidated Balance Sheets(Expressed in U.S. dollars)  April 30,
    
    
    April 30,2008
    
    
    2007$
    
    
    $ASSETSCurrent AssetsCash
    
    7,645
    
    
    163,909Prepaid
      expenses (Note 3(c))
    
    872
    
    
    41,648Total Assets
    
    8,517
    
    
    205,557LIABILITIES AND STOCKHOLDERS
      DEFICIENCYCurrent LiabilitiesBank indebtedness
    
    2,347
    
    
    Accounts payable and accrued liabilities
    
    124,592
    
    
    65,449Due to related parties (Note 4(a))
    
    151,434
    
    
    248,253Total Liabilities
    
    278,373
    
    
    313,702Stockholders DeficiencyCommon Stock (Note 3):100,000,000 shares authorized without
      par value; 27,926,824 shares issued andoutstanding (April 30,
      2007 - 26,919,208 shares)
    
    6,834,547
    
    
    5,892,176Additional Paid-in Capital
    
    2,326,784
    
    
    2,085,256Common Stock Subscribed
    
    
    
    
    259,027Donated Capital (Note 4)
    
    997,500
    
    
    847,500Deficit Accumulated During the Development Stage
    
    (10,428,687
    )
    
    (9,192,104
    )Total Stockholders
      Deficiency
    
    (269,856
    )
    
    (108,145
    )Total Liabilities and Stockholders Deficiency
    
    8,517
    
    
    205,557Commitments (Note 5)Contingencies (Note 6)Approved by the Directors:John RobertsonJohn Robertson - DirectorJennifer LoretteJennifer Lorette - Director (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-3    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Operations(Expressed in U.S. dollars)  FromJuly 27,1992(Date of Inception)
    
    
    For the Year Endedto April 30,
    
    
    April 30,2008
    
    
    2008
    
    
    2007$
    
    
    $
    
    
    $ExpensesAmortization
    
    130,533
    
    
    
    
    
    General and administrative (Notes 2(g), 3(a) and
      (c))
    
    6,325,736
    
    
    1,101,636
    
    
    1,292,517Impairment loss
    
    72,823
    
    
    
    
    
    Research
      and development
    
    4,089,246
    
    
    134,947
    
    
    120,777Operating Loss
    
    10,618,338
    
    
    1,236,583
    
    
    1,413,294Other IncomeAccounts
      payable written-off (Note 6)
    
    (189,651
    )
    
    
    
    
    Net Loss for the Period
    
    10,428,687
    
    
    1,236,583
    
    
    1,413,294Loss Per Share
    
    
    
    
    0.04
    
    
    0.05Weighted Average Number of Common SharesOutstanding
    
    
    
    
    27,576,000
    
    
    26,128,000 (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-4    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Stockholders Equity (Deficiency)From July 27, 1992 (Date of Inception) to April 30, 2008(Expressed in U.S. dollars)  DeficitAccumulated
    
    TotalAdditional
    
    Common
    
    
    
    
    
    During the
    
    StockholdersPaid-in
    
    Stock
    
    Donated
    
    Deferred
    
    Development
    
    EquityShares
    
    Amount
    
    Capital
    
    Subscribed
    
    Capital
    
    Compensation
    
    Stage
    
    (Deficiency)#
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  July 27,
        1992 (date of inception)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock issued for intellectual property at
        $0.001 per share
    5,700,000
    
    57,000
    
    
    
    
    
    
    
    
    
    
    
    57,000Stock issued for cash
    300,000
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    3,000Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (23,492
    )
    (23,492
    )Balance  April 30,
        1993
    6,000,000
    
    60,000
    
    
    
    
    
    
    
    
    
    (23,492
    )
    36,508Stock issued for cash pursuant to a public
        offering
    500,000
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    500,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (394,263
    )
    (394,263
    )Balance  April 30, 1994
    6,500,000
    
    560,000
    
    
    
    
    
    
    
    
    
    (417,755
    )
    142,245Stock issued for cash pursuant
        to:Options exercised
    10,000
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Private placement
    250,000
    
    562,500
    
    
    
    
    
    
    
    
    
    
    
    562,500Warrants exercised
    170,200
    
    213,000
    
    
    
    
    
    
    
    
    
    
    
    213,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (1,225,743
    )
    (1,225,743
    )Balance  April 30, 1995
    6,930,200
    
    1,336,500
    
    
    
    
    
    
    
    
    
    (1,643,498
    )
    (306,998
    )Stock issued for cash pursuant
        to:Options exercised
    232,500
    
    75,800
    
    
    
    
    
    
    
    
    
    
    
    75,800Warrants exercised
    132,200
    
    198,300
    
    
    
    
    
    
    
    
    
    
    
    198,300A private offering
    341,000
    
    682,000
    
    
    
    
    
    
    
    
    
    
    
    682,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (796,905
    )
    (796,905
    )Balance  April 30,1996
    7,635,900
    
    2,292,600
    
    
    
    
    
    
    
    
    
    (2,440,403
    )
    (147,803
    )Stock issued for cash pursuant
        to:Options exercised
    137,000
    
    13,700
    
    
    
    
    
    
    
    
    
    
    
    13,700Warrants exercised
    185,400
    
    278,100
    
    
    
    
    
    
    
    
    
    
    
    278,100Private placements
    165,000
    
    257,500
    
    
    
    
    
    
    
    
    
    
    
    257,500Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (510,184
    )
    (510,184
    )Balance  April 30, 1997
    8,123,300
    
    2,841,900
    
    
    
    
    
    
    
    
    
    (2,950,587
    )
    (108,687
    )Stock issued for cash pursuant
        to:Options exercised
    50,000
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000A units offering
    500,000
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    500,000Stock issued for acquisition of AVFS rights
    400,000
    
    288,251
    
    
    
    
    
    
    
    
    
    
    
    288,251Stock issued for financial
        consulting services
    125,000
    
    170,250
    
    
    
    
    
    
    
    
    
    
    
    170,250Stock issued to settle an accrued liability
    50,000
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    25,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (580,901
    )
    (580,901
    )Balance  April 30, 1998
    9,248,300
    
    3,830,401
    
    
    
    
    
    
    
    
    
    (3,531,488
    )
    298,913 (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-5    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Stockholders Equity (Deficiency)From July 27, 1992 (Date of Inception) to April 30, 2008(Expressed in U.S. dollars)  DeficitAccumulated
    
    TotalAdditional
    
    Common
    
    
    
    
    
    During the
    
    StockholdersPaid-in
    
    Stock
    
    Donated
    
    Deferred
    
    Development
    
    EquityShares
    
    Amount
    
    Capital
    
    Subscribed
    
    Capital
    
    Compensation
    
    Stage
    
    (Deficiency)#
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  April 30,
        1998
    9,248,300
    
    3,830,401
    
    
    
    
    
    
    
    
    
    (3,531,488
    )
    298,913Stock issued for financial consulting services
    100,000
    
    71,046
    
    
    
    
    
    
    
    
    
    
    
    71,046Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (397,924
    )
    (397,924
    )Balance  April 30,
        1999
    9,348,300
    
    3,901,447
    
    
    
    
    
    
    
    
    
    (3,929,412
    )
    (27,965
    )Stock issued for cash pursuant to:A private placement
    852,101
    
    639,075
    
    
    
    
    
    
    
    
    
    
    
    639,075Cash commission paid
    
    
    (47,607
    )
    
    
    
    
    
    
    
    
    
    
    (47,607
    )Warrants exercised
    17,334
    
    17,334
    
    
    
    
    
    
    
    
    
    
    
    17,334Stock-based compensation
    
    
    
    
    15,417
    
    
    
    
    
    
    
    
    
    15,417Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (413,495
    )
    (413,495
    )Balance  April 30, 2000
    10,217,735
    
    4,510,249
    
    15,417
    
    
    
    
    
    
    
    (4,342,907
    )
    182,759Stock issued for cash pursuant
        to warrants exercised
    4,000
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    2,000Stock-based compensation
    
    
    
    
    18,500
    
    
    
    
    
    
    
    
    
    18,500Stock to be issued
    
    
    
    
    
    
    72,000
    
    
    
    
    
    
    
    72,000Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (808,681
    )
    (808,681
    )Balance  April 30, 2001
    10,221,735
    
    4,512,249
    
    33,917
    
    72,000
    
    
    
    
    
    (5,151,588
    )
    (533,422
    )Stock issued for cash pursuant
        to a private placement
    1,066,200
    
    266,550
    
    
    
    (72,000
    )
    
    
    
    
    
    
    194,550Amount receivable
    
    
    (3,000
    )
    
    
    
    
    
    
    
    
    
    
    (3,000
    )Stock-based compensation
    
    
    
    
    3,083
    
    
    
    
    
    
    
    
    
    3,083Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (156,090
    )
    (156,090
    )Balance - April 30, 2002
    11,287,935
    
    4,775,799
    
    37,000
    
    
    
    
    
    
    
    (5,307,678
    )
    (494,879
    )Stock issued to settle debt
    6,100,000
    
    305,000
    
    
    
    
    
    
    
    
    
    
    
    305,000Stock issued for services
    250,000
    
    16,500
    
    
    
    
    
    
    
    
    
    
    
    16,500Stock issued for convertible
        debenture
    50,000
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Stock to be issued
    
    
    
    
    
    
    25,968
    
    
    
    
    
    
    
    25,968Donated consulting services
    
    
    
    
    
    
    
    
    187,500
    
    
    
    
    
    187,500Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (220,972
    )
    (220,972
    )Balance
         April 30, 2003
    17,687,935
    
    5,102,299
    
    37,000
    
    25,968
    
    187,500
    
    
    
    (5,528,650
    )
    (175,883
    ) (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-6    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Stockholders Equity (Deficiency)From July 27, 1992 (Date of Inception) to April 30, 2008(Expressed in U.S. dollars)  DeficitAccumulated
    
    TotalAdditional
    
    Common
    
    
    
    
    
    During the
    
    StockholdersPaid-in
    
    Stock
    
    Donated
    
    Deferred
    
    Development
    
    EquityShares
    
    Amount
    
    Capital
    
    Subscribed
    
    Capital
    
    Compensation
    
    Stage
    
    (Deficiency)#
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  April 30,
        2003
    17,687,935
    
    5,102,299
    
    37,000
    
    25,968
    
    187,500
    
    
    
    (5,528,650
    )
    (175,883
    )Donated consulting services
    
    
    
    
    
    
    
    
    210,000
    
    
    
    
    
    210,000Stock issued for cash pursuant
        to a private placement
    173,120
    
    25,968
    
    
    
    (25,968
    )
    
    
    
    
    
    
    Stock issued for cash pursuant to:Warrants exercised
    550,000
    
    86,000
    
    
    
    
    
    
    
    
    
    
    
    86,000Stock options exercised
    100,000
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    20,000Stock-based compensation
    
    
    
    
    78,184
    
    
    
    
    
    (78,184
    )
    
    
    Stock issued for services
    400,000
    
    92,000
    
    
    
    
    
    
    
    (92,000
    )
    
    
    Stock issued to settle debt
    3,320,000
    
    166,000
    
    
    
    
    
    
    
    
    
    
    
    166,000Deferred compensation
    
    
    
    
    
    
    
    
    
    
    142,355
    
    
    
    142,355Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (609,913
    )
    (609,913
    )Balance  April 30, 2004
    22,231,055
    
    5,492,267
    
    115,184
    
    
    
    397,500
    
    (27,829
    )
    (6,138,563
    )
    (161,441
    )Stock issued for services
    150,000
    
    24,000
    
    
    
    
    
    
    
    (24,000
    )
    
    
    Stock issued for cash pursuant to:Options exercised
    133,750
    
    29,750
    
    
    
    
    
    
    
    
    
    
    
    29,750Warrants exercised
    173,120
    
    34,624
    
    
    
    
    
    
    
    
    
    
    
    34,624Private placement
    1,032,800
    
    258,200
    
    
    
    
    
    
    
    
    
    
    
    258,200Stock-based compensation
    
    
    
    
    23,304
    
    
    
    
    
    
    
    
    
    23,304Donated consulting services
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    150,000Deferred compensation
    
    
    
    
    
    
    
    
    
    
    38,829
    
    
    
    38,829Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (584,889
    )
    (584,889
    )Balance - April 30, 2005
    23,720,725
    
    5,838,841
    
    138,488
    
    
    
    547,500
    
    (13,000
    )
    (6,723,452
    )
    (211,623
    )Re-class deferred compensation
        to additional paid in capital
    
    
    
    
    (13,000
    )
    
    
    
    
    13,000
    
    
    
    Stock issued for cash pursuant to:Options exercised
    212,000
    
    53,313
    
    
    
    
    
    
    
    
    
    
    
    53,313Warrants exercised
    406,400
    
    142,240
    
    
    
    
    
    
    
    
    
    
    
    142,240Private placement
    1,500,000
    
    881,088
    
    
    
    
    
    
    
    
    
    
    
    881,088Common stock subscribed
    
    
    
    
    
    
    3,750
    
    
    
    
    
    
    
    3,750Stock-based compensation
    
    
    
    
    124,793
    
    
    
    
    
    
    
    
    
    124,793Deferred compensation
    
    
    
    
    12,000
    
    
    
    
    
    
    
    
    
    12,000Donated consulting services
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    150,000Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (1,055,358
    )
    (1,055,358
    )Balance
         April 30, 2006
    25,839,125
    
    6,915,482
    
    262,281
    
    3,750
    
    697,500
    
    
    
    (7,778,810
    )
    100,203 (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-7    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Stockholders Equity (Deficiency)From July 27, 1992 (Date of Inception) to April 30, 2008(Expressed in U.S. dollars)  DeficitAccumulated
    
    TotalAdditional
    
    Common
    
    
    
    
    
    During the
    
    StockholdersPaid-in
    
    Stock
    
    Donated
    
    Deferred
    
    Development
    
    EquityShares
    
    Amount
    
    Capital
    
    Subscribed
    
    Capital
    
    Compensation
    
    Stage
    
    (Deficiency)#
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Balance  April 30,
        2006
    25,839,125
    
    6,915,482
    
    262,281
    
    3,750
    
    697,500
    
    
    
    (7,778,810
    )
    100,203Stock issued for cash pursuant to:Options exercised
    662,250
    
    143,938
    
    
    
    (3,750
    )
    
    
    
    
    
    
    140,188Warrants exercised
    268,833
    
    217,666
    
    
    
    
    
    
    
    
    
    
    
    217,666Private placement
    120,000
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    120,000Private placement costs
    
    
    (3,504
    )
    
    
    (13,673
    )
    
    
    
    
    
    
    (17,177
    )Common stock
        subscribed
    
    
    
    
    
    
    272,700
    
    
    
    
    
    
    
    272,700Stock issued for services
    29,000
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    60,000Warrants issued for equity
        line of credit
    
    
    (1,561,406
    )
    1,561,406
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    260,569
    
    
    
    
    
    
    
    
    
    260,569Deferred compensation
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    1,000Donated consulting services
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    150,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    (1,413,294
    )
    (1,413,294
    )Balance  April 30, 2007
    26,919,208
    
    5,892,176
    
    2,085,256
    
    259,027
    
    847,500
    
    
    
    (9,192,104
    )
    (108,145
    )Stock issued for cash pursuant to:Options exercised
    38,500
    
    12,125
    
    
    
    
    
    
    
    
    
    
    
    12,125Warrants exercised
    99,166
    
    96,666
    
    
    
    (10,000
    )
    
    
    
    
    
    
    86,666Private placement
    833,950
    
    833,950
    
    
    
    (262,700
    )
    
    
    
    
    
    
    571,250Private placement costs
    
    
    (47,170
    )
    
    
    13,673
    
    
    
    
    
    
    
    (33,497
    )Options exercised for services
    36,000
    
    46,800
    
    
    
    
    
    
    
    
    
    
    
    46,800Stock-based compensation
    
    
    
    
    241,528
    
    
    
    
    
    
    
    
    
    241,528Donated consulting services
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    150,000Net
        loss
    
    
    
    
    
    
    
    
    
    
    
    
    (1,236,583
    )
    (1,236,583
    )Balance  April 30, 2008
    27,926,824
    
    6,834,547
    
    2,326,784
    
    
    
    997,500
    
    
    
    (10,428,687
    )
    (269,856
    ) (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-8    REGI U.S., Inc.(A Development Stage Company)Consolidated Statements of Cash Flows(Expressed in U.S. dollars)  FromJuly 27, 1992(Date of Inception)
    
    For the Year Endedto April 30,
    
    April 30,2008
    
    2008
    
    2007$
    
    $
    
    $Operating ActivitiesNet
      loss
    (10,428,687
    )
    (1,236,583
    )
    (1,413,294
    )Adjustments to reconcile
        net loss to net cash used in operating activities:Accounts payable
        written-off
    (189,651
    )
    
    
    Amortization
    130,533
    
    
    
    Impairment loss
    72,823
    
    
    
    Stock-based compensation
      (Note 3(a))
    765,378
    
    241,528
    
    260,569Amortization of deferred compensation
    373,795
    
    
    
    1,000Donated services
    997,500
    
    150,000
    
    150,000Intellectual property written-off
    578,509
    
    
    
    Shares issued and
      options exercised for services(Note 3(c))
    83,400
    
    35,900
    
    47,500Changes in operating assets and liabilitiesAccounts
      receivable
    (3,000
    )
    
    
    Prepaid expenses
    (872
    )
    28,276
    
    30,991Accounts payable and accrued
      liabilities
    322,399
    
    59,143
    
    8,634Cash Used in Operating Activities
    (7,297,873
    )
    (721,736
    )
    (914,600
    )Investing ActivitiesPatent protection
      costs
    (38,197
    )
    
    
    Purchase of property, plant and equipment
    (198,419
    )
    
    
    Cash Used in Investing
      Activities
    (236,616
    )
    
    
    Financing ActivitiesAdvances from (repayments to) related
      parties
    462,681
    
    (73,419
    )
    104,995Bank indebtedness
    2,347
    
    2,347
    
    Proceeds from convertible debenture
    5,000
    
    
    
    Proceeds from the
      sale of common stock
    7,072,106
    
    636,544
    
    474,350Subscriptions received
    
    
    
    
    259,027Cash Provided by Financing
      Activities
    7,542,134
    
    565,472
    
    838,372Increase (Decrease) In Cash
    7,645
    
    (156,264
    )
    (76,228
    )Cash  Beginning
      of Period
    
    
    163,909
    
    240,137Cash - End of Period
    7,645
    
    7,645
    
    163,909Non-Cash Investing and Financing ActivitiesWarrants issued for equity line
      of credit
    1,561,406
    
    
    
    1,561,406Shares issued to
      settle debt
    496,000
    
    
    
    Shares issued for convertible debenture
    5,000
    
    
    
    Shares issued for
      intellectual property
    345,251
    
    
    
    Shares issued and options exercised
      for services
    95,900
    
    35,900
    
    60,000Consulting services
      reflected as donated capital
    997,500
    
    150,000
    
    150,000Affiliate's shares issued for intellectual property
    200,000
    
    
    
    Supplemental DisclosuresInterest paid
    
    
    
    
    Income
        tax paid
    
    
    
    
     (The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements) 
  F-9    REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  1.
    NATURE OF OPERATIONS AND CONTINUANCE OF
        BUSINESSThe Company was incorporated in the State
        of Oregon, U.S.A., on July 27, 1992.The Company is a development stage company
        engaged in the business of developing and commercially exploiting an improved
        axial vane type rotary engine known as the Rand Cam/Direct Charge Engine
        (the RC/DC Engine) in the U.S. The world wide marketing and
        intellectual rights, other than in the U.S., are held by Reg Technologies,
        Inc. (Reg), a major shareholder, which owns 12% of the Companys
        issued, and outstanding, stock and controlled the Company by way of a
        voting trust arrangement, which was cancelled on April 30, 2008. The Company
        owns the U.S. marketing and intellectual rights and has a project cost
        sharing agreement, whereby it will fund 50% of the further development
        of the RC/DC Engine and Reg will fund 50%.The Company formed a wholly-owned subsidiary,
        Rad Max Technologies, Inc. (Rad Max) on April 10, 2007 in
        the State of Washington.In a development stage company, management
        devotes most of its activities to establishing a new business. Planned
        principal activities have not yet produced any revenues and the Company
        has suffered recurring operating losses as is normal in development stage
        companies. The Company has accumulated losses of $10,428,687 since inception.
        These factors raise substantial doubt about the Companys ability
        to continue as a going-concern. The ability of the Company to emerge from
        the development stage with respect to its planned principal business activity
        is dependent upon its successful efforts to raise additional equity financing,
        receive funding from affiliates and controlling shareholders, and develop
        a market for its products.The Company plans to raise funds through loans
        from Rand Energy Group Inc. (Rand), a private company with
        officers and directors in common with the Company. Further, Rand owns
        approximately 9% of the shares of the Company, and may sell shares as
        needed to meet ongoing funding requirements if traditional equity sources
        of financing prove to be insufficient. The Company also receives interim
        support from affiliated companies and plans to raise additional capital
        through debt and/or equity financings. The Company has an equity line
        of credit whereby the investor agreed to purchase up to $10,000,000 of
        the Companys common stock (see Note 3(e)). There continues to be
        insufficient funds to provide enough working capital to fund ongoing operations
        for the next twelve months. The Company may also raise additional funds
        through the exercise of warrants and stock options, if exercised.2.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a)
    Basis of Presentation and Principles of ConsolidationThese consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and are presented in U.S. dollars, unless otherwise noted, and include the accounts of the Company and its subsidiary, Rad Max. All inter-company balances have been eliminated upon consolidation. The Company’s fiscal year-end is April 30.(b)
    Use of EstimatesThe preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the 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 reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities, and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.(c)
    Cash and Cash EquivalentsThe Company considers all highly liquid instruments
        with maturity of three months or less at the time of issuance to be cash
        equivalents. F-10   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  2.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)(d)
    Financial Instruments(i)
    Fair ValueThe carrying values of cash, bank indebtedness, due
        to related parties, and accounts payable and accrued liabilities approximate
        their fair values because of the short-term maturity of these financial
        instruments.(ii)
    Interest Rate RiskThe Company is not exposed to significant interest rate
        risk due to the short-term maturity of its monetary assets and liabilities.(iii)
    Credit RiskThe Companys financial asset that is exposed to
        credit risk consists primarily of cash. To manage the risk, cash is placed
        with major financial institutions.(iv)
    Currency RiskThe Companys functional and reporting currency
        is the U.S. dollar. Monetary assets and liabilities denominated in foreign
        currencies are translated using the exchange rate prevailing at the balance
        sheet date. Gains and losses arising on translation or settlement of foreign
        currency denominated transactions or balances are included in the determination
        of income. Foreign currency transactions are primarily undertaken in Canadian
        dollars. The Company has not, to the date of these financial statements,
        entered into derivative instruments to offset the impact of foreign currency
        fluctuations.(e)
    Income TaxesPotential benefits of income tax losses are
        not recognized in the accounts until realization is more likely than not.
        The Company has adopted SFAS No. 109, Accounting for Income Taxes,as of its inception. Pursuant to SFAS No. 109, the Company is required
        to compute tax asset benefits for net operating losses carried forward.
        Potential benefits 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.In July 2006, the Financial Accounting Standards
        Board (FASB) issued Financial Interpretation No. 48 (FIN
        48), Accounting for Uncertainty in Income Taxes,as an interpretation of FASB Statement No. 109, Accounting
        for Income Taxes(SFAS 109). This Interpretation
        clarifies the accounting for uncertainty in income taxes recognized in
        an enterprises financial statements in accordance with SFAS 109
        and prescribes a recognition threshold of more-likely-than-not to be sustained
        upon examination. Measurement of the tax uncertainty occurs if the recognition
        threshold has been met. This Interpretation also provides guidance on
        de-recognition, classification, interest and penalties, accounting in
        interim periods, disclosure, and transition. FIN 48 is effective for fiscal
        years beginning after December 15, 2006. Differences between the amounts
        recognized in the statements of financial position prior to the adoption
        of FIN 48 and the amounts reported after adoption should be accounted
        for as a cumulative-effect adjustment recorded to the beginning balance
        of retained earnings. The adoption of FIN 48 had no impact to the Company.(f)
    Research and DevelopmentThe Company is in the development stage and
        all costs relating to research and development are charged to operations
        as incurred.(g)
    Stock-Based CompensationPrior to May 1, 2005, the Company accounted
        for stock-based awards under the recognition and measurement provisions
        of Accounting Principles Board (APB) Opinion No. 25, Accounting
        for Stock Issued to Employees,using the intrinsic value method
        of accounting, under which compensation expense was only recognized if
        the exercise price of the Companys employee stock options was less
        than the market price of the underlying common stock on the date of grant.
        Effective May 1, 2005, the Company adopted the fair value recognition
        provisions of SFAS No. 123R, Share-Based Payments,using
        the modified prospective transition method. There has been no effect on
        the Companys reported loss from operations, cash flows or loss per
        share as a result of adopting SFAS No. 123R. F-11   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  2.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)(h)
    Basic and Diluted Income (Loss) per ShareThe Company computes income (loss) per share in accordance
        with SFAS No. 128, Earnings per Share. SFAS No. 128
        requires presentation of both basic and diluted earnings per share (EPS)
        on the face of the income statement. Basic EPS is computed by dividing
        net income (loss) available to common shareholders (numerator) by the
        weighted average number of common shares outstanding (denominator) during
        the period. Diluted EPS gives effect to all dilutive potential common
        shares outstanding during the period including stock options, using the
        treasury stock method, and convertible preferred stock, using the if-
        converted method. In computing diluted EPS, the average stock price for
        the period is used in determining the number of common shares assumed
        to be purchased from the exercise of stock options or warrants. Diluted
        EPS excludes all dilutive potential common shares if their effect is anti-dilutive.(i)
    Recent Accounting PronouncementsIn May 2008, the FASB issued SFAS No. 162, The
        Hierarchy of Generally Accepted Accounting Principles.SFAS 162 identifies the sources of accounting principles
        and the framework for selecting the principles to be used in the preparation
        of financial statements of non-governmental entities that are presented
        in conformity with generally accepted accounting principles in the United
        States. It is effective 60 days following the SECs approval of the
        Public Company Accounting Oversight Board amendments to AU Section 411,
        The Meaning of Present Fairly in Conformity With Generally Accepted
        Accounting Principles.The adoption of this statement is not
        expected to have a material effect on the Companys consolidated
        financial statements.In March 2008, the FASB issued SFAS No. 161, Disclosures
        about Derivative Instruments and Hedging Activities  an amendment
        to FASB Statement No. 133.SFAS No. 161 is intended to improve
        financial standards for derivative instruments and hedging activities
        by requiring enhanced disclosures to enable investors to better understand
        their effects on an entity's financial position, financial performance,
        and cash flows. Entities are required to provide enhanced disclosures
        about: (a) how and why an entity uses derivative instruments; (b) how
        derivative instruments and related hedged items are accounted for under
        Statement 133 and its related interpretations; and (c) how derivative
        instruments and related hedged items affect an entitys financial
        position, financial performance, and cash flows. It is effective for financial
        statements issued for fiscal years beginning after November 15, 2008,
        with early adoption encouraged. The adoption of this statement is not
        expected to have a material effect on the Companys consolidated
        financial statements.In December 2007, the FASB issued SFAS No. 141R, Business
        Combinations. This statement replaces SFAS 141 and defines the
        acquirer in a business combination as the entity that obtains control
        of one or more businesses in a business combination and establishes the
        acquisition date as the date that the acquirer achieves control. SFAS
        141R requires an acquirer to recognize the assets acquired, the liabilities
        assumed, and any non-controlling interest in the acquiree at the acquisition
        date, measured at their fair values as of that date. SFAS 141R also requires
        the acquirer to recognize contingent consideration at the acquisition
        date, measured at its fair value at that date. This statement is effective
        for fiscal years, and interim periods within those fiscal years, beginning
        on or after December 15, 2008. Earlier adoption is prohibited. The adoption
        of this statement is not expected to have a material effect on the Company's
        consolidated financial statements.In December 2007, the FASB issued SFAS No. 160, Non-controlling
        Interests in Consolidated Financial Statements Liabilities  an Amendment
        of ARB No. 51. This statement amends ARB 51 to establish accounting
        and reporting standards for the non-controlling interest in a subsidiary
        and for the deconsolidation of a subsidiary. This statement is effective
        for fiscal years, and interim periods within those fiscal years, beginning
        on or after December 15, 2008. Earlier adoption is prohibited. The adoption
        of this statement is not expected to have a material effect on the Company's
        future reported financial position or results of operations.In February 2007, the FASB issued SFAS No. 159, The
        Fair Value Option for Financial Assets and Financial Liabilities 
        Including an Amendment of FASB Statement No. 115.This statement
        permits entities to choose to measure many financial instruments and certain
        other items at fair value. Most of the provisions of SFAS No. 159 apply
        only to entities that elect the fair value option. However, the amendment
        to SFAS No. 115,Accounting for Certain Investments in Debt
        and Equity Securities, applies to all entities with available-for-
        sale and trading securities. SFAS No. 159 is effective as of the beginning
        of an entitys first fiscal year that begins after November 15, 2007.
        Early adoption is permitted as of the beginning of a fiscal year that
        begins on or before November 15, 2007, provided the entity also elects
        to apply the provision of SFAS No. 157, Fair Value Measurements.The adoption of this statement is not expected to have a material
        effect on the Company's consolidated financial statements. F-12   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  2.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)(i)
    Recent Accounting Pronouncements (Continued)In September 2006, the FASB issued SFAS No.
        157, Fair Value Measurements. The objective of SFAS
        No. 157 is to increase consistency and comparability in fair value measurements
        and to expand disclosures about fair value measurements. SFAS No. 157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles, and expands disclosures about
        fair value measurements. SFAS No. 157 applies under other accounting pronouncements
        that require or permit fair value measurements and does not require any
        new fair value measurements. The provisions of SFAS No. 157 are effective
        for fair value measurements made in fiscal years beginning after November
        15, 2007. The adoption of this statement is not expected to have a material
        effect on the Company's consolidated financial statements.In March 2006, the FASB issued SFAS No. 156,
        "Accounting for Servicing of Financial Assets, an amendment of FASB
        Statement No. 140, Accounting for Transfers and Servicing of Financial
        Assets and Extinguishments of Liabilities". This statement requires
        all separately recognized servicing assets and servicing liabilities be
        initially measured at fair value, if practicable, and permits for subsequent
        measurement using either fair value measurement with changes in fair value
        reflected in earnings or the amortization and impairment requirements
        of Statement No. 140. The subsequent measurement of separately recognized
        servicing assets and servicing liabilities at fair value eliminates the
        necessity for entities that manage the risks inherent in servicing assets
        and servicing liabilities with derivatives to qualify for hedge accounting
        treatment and eliminates the characterization of declines in fair value
        as impairments or direct write-downs. SFAS No. 156 is effective for an
        entity's first fiscal year beginning after September 15, 2006. The adoption
        of this statement did not have a material effect on the Company's consolidated
        financial statements.3.
    COMMON STOCK(a)
    Stock Option PlanThe 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.The Company records stock-based compensation
        in accordance with SFAS No. 123R Share Based Payments,using the fair value method.All transactions in which goods or services
        are the consideration received for the issuance of equity instruments
        are accounted for based on the fair value of the consideration received
        or the fair value of the equity instrument issued, whichever is more reliably
        measurable. Equity instruments issued to employees and the cost of the
        services received as consideration are measured and recognized based on
        the fair value of the equity instruments issued.All options granted by the Company under the
        2000 Plan have the following vesting schedule:(i)
    Up to 25% of the option may be exercised at any time
        during the term of the option; such initial exercise is referred to as
        the First Exercise.(ii)
    The second 25% of the option may be exercised at any time after 90 days
      from the date of First Exercise; such second exercise is referred to as
      the Second Exercise.(iii)
    The third 25% of the option may be exercised at any time after 90 days
      from the date of Second Exercise; such third exercise is referred to as
      the Third Exercise.(iv)
    The fourth and final 25% of the option may be exercised at any time after
      90 days from the date of the Third Exercise.(v)
    The options expire 60 months from the date of grant. F-13   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  3.
    COMMON STOCK(Continued)(a)
    Stock Option Plan (Continued)On April 12, 2007, the Company approved a new 2007 Stock
        Option Plan to issue up to 2,000,000 shares to certain key directors and
        employees. Pursuant to the Plan, the Company has granted stock options
        to certain directors and employees.All options granted by the Company under the 2007 Plan
        have the following vesting schedule:  (i)
    Up to 25% of the option may be exercised 90 days after
        the grant of the option.(ii)
    The second 25% of the option may be exercised at any
        time after 1 year and 90 days after the grant of the option.(iii)
    The third 25% of the option may be exercised at any
        time after 2 years and 90 days after the grant of the option.(iv)
    The fourth and final 25% of the option may be exercised
        at any time after 3 years and 90 days after the grant of the option.(v)
    The options expire 60 months from the date of grant. The fair value for options granted was
  estimated at the date of grant using the Black-Scholes option pricing model
  and the weighted average fair value of stock options granted during the year
  ended April 30, 2008 was $1.30 (2007 - $1.32) . During the year ended April
  30, 2008, the Company recorded stock-based compensation of $241,528 (2007 -
  $260,569) as a general and administrative expense. At April 30, 2008, the Company
  had $1,044,431 (2007 - 1,247,391) of total unrecognized compensation cost related
  to non-vested stock options held by employees, which will be recognized over
  future periods. The weighted average assumptions used
  are as follows: April 30, 2008
    April 30, 2007Expected dividend yield
    0%
    0%Risk-free interest rate
    3.49%
    4.54Expected volatility
    110%
    142%Expected option life (in years)
    2.50
    2.50 Option pricing models require the input
  of highly subjective assumptions including the expected price volatility. The
  subjective input assumptions can materially affect the fair value estimate. On May 10, 2007, the Company extended
  the term on 75,000 options for an additional two years. The incremental fair
  value of the modification of the stock options was estimated to be $0.05 per
  share, and the Company recognized $1,000 as stock-based compensation. The fair
  value of the extended options was estimated at the date of grant or modification
  using the Black-Scholes option pricing model using the following weighted average
  assumptions: risk free interest rate of 4.53%, expected volatility of 118%,
  an expected option life of 2.1 years and no expected dividends. On November 7, 2007, the Company granted
  25,000 stock options from the 2007 Stock Option Plan to an employee exercisable
  at $1.30 per share, up to November 7, 2012. The fair value of options was estimated
  at the date of grant using the Black-Scholes option pricing model using the
  following weighted average assumptions: risk free interest rate of 3.49%, expected
  volatility of 110%, an expected option life of 2.5 years and no expected dividends.
  The weighted average fair value of options granted was $0.62 per option During
  the fiscal year ended April 30, 2008, the Company recorded stock-based compensation
  of $241,528 as a general and administrative expense. F-14   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  3.
    COMMON STOCK(Continued)(a)
    Stock Option Plan (Continued)The following table summarizes the continuity of the
        Companys stock options:  Weighted AverageOptions
    
    
    Exercise Price#
    
    
    $Outstanding, April 30, 2006
    
    1,175,750
    
    
    0.37Granted
    
    1,375,000
    
    
    1.32Exercised
    
    (662,250
    )
    
    0.22Outstanding, April 30, 2007
    
    1,888,500
    
    
    1.12Granted
    
    25,000
    
    
    1.30Exercised
    
    (74,500
    )
    
    0.79Outstanding, April 30, 2008
    
    1,839,000
    
    
    1.13 Additional information regarding options
  outstanding and exercisable as at April 30, 2008, is as follows: Options Outstanding Weighted AverageAggregate
    
    
    RemainingExercise
    
    
    Shares Under
    
    
    Intrinsic
    
    
    ContractualExpiry Date
    
    Price
    
    
    Option
    
    
    Value
    
    
    Life (in years)$
    
    
    #
    
    
    $
    
    
    #September 10, 2008
    
    0.25
    
    
    150,000
    
    
    84,000
    
    
    0.36December 2, 2008
    
    0.35
    
    
    100,000
    
    
    46,000
    
    
    0.59May 10, 2009
    
    0.20
    
    
    75,000
    
    
    45,750
    
    
    1.03September 30, 2009
    
    0.35
    
    
    25,000
    
    
    11,500
    
    
    1.42May 27, 2010
    
    0.45
    
    
    50,000
    
    
    18,000
    
    
    2.07April 21, 2011
    
    2.20
    
    
    75,000
    
    
    
    
    
    2.98June 29, 2011
    
    2.09
    
    
    25,000
    
    
    
    
    
    3.16November 1, 2011
    
    1.37
    
    
    125,000
    
    
    
    
    
    3.51January 30, 2012
    
    1.30
    
    
    200,000
    
    
    
    
    
    3.75April 12, 2012
    
    1.30
    
    
    989,000
    
    
    
    
    
    3.95November 7, 2012
    
    1.30
    
    
    25,000
    
    
    
    
    
    4.53Options outstanding
    
    
    
    
    1,839,000
    
    
    205,250
    
    
    3.18 Options Exercisable Weighted AverageAggregate
    
    
    RemainingExercise
    
    
    Shares Under
    
    
    Intrinsic
    
    
    ContractualExpiry Date
    
    Price
    
    
    Option
    
    
    Value
    
    
    Life (in years)$
    
    
    #
    
    
    $
    
    
    #September 10, 2008
    
    0.25
    
    
    150,000
    
    
    84,000
    
    
    0.36December 2, 2008
    
    0.35
    
    
    100,000
    
    
    46,000
    
    
    0.59May 10, 2009
    
    0.20
    
    
    18,750
    
    
    11,438
    
    
    1.03September 30, 2009
    
    0.35
    
    
    25,000
    
    
    11,500
    
    
    1.42May 27, 2010
    
    0.45
    
    
    12,500
    
    
    4,500
    
    
    2.07April 21, 2011
    
    2.20
    
    
    18,750
    
    
    
    
    
    2.98June 29, 2011
    
    2.09
    
    
    6,250
    
    
    
    
    
    3.16November 1, 2011
    
    1.37
    
    
    31,250
    
    
    
    
    
    3.51January 30, 2012
    
    1.30
    
    
    50,000
    
    
    
    
    
    3.75April 12, 2012
    
    1.30
    
    
    220,250
    
    
    
    
    
    3.95November 7, 2012
    
    1.30
    
    
    6,250
    
    
    
    
    
    4.53Options exercisable
    
    
    
    
    639,000
    
    
    157,438
    
    
    2.29 The aggregate intrinsic value of the
  options exercised during the year ended April 30, 2008 was $19,060 (2007 - $816,325). F-15   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  3.
    COMMON STOCK(Continued)(a)
    Stock Option Plan (Continued)At April 30, 2008, the Company had $1,044,431 of total
        unrecognized compensation cost related to non- vested stock options held
        by employees, which will be recognized over the vesting period. A summary
        of the status of the Companys non-vested stock options as of April
        30, 2008, and changes during the fiscal year ended April 30, 2008, is
        presented below:  Weighted-AverageGrant-DateNon-vested
      stock options
    
    Stock Options
    
    
    Fair Value#
    
    
    $Non-vested at May 1, 2007
    
    1,383,250
    
    
    0.90Granted
    
    25,000
    
    
    1.30Modified
    
    75,000
    
    
    0.20Vested
    
    (283,250
    )
    
    0.81Non-vested at April
      30, 2008
    
    1,200,000
    
    
    0.87  (b)
    Performance Stock PlanThe Company has allotted 2,500,000 shares to be issued
        pursuant to a Performance Stock Plan approved and registered on June 27,
        1997, and amended in June 2004. On April 27, 2007, the Company further
        amended the Plan so that the term of the Plan is extended to the twentieth
        anniversary of the effective date.(c)
    Non-Cash ConsiderationShares issued for non-cash consideration to third parties
        were valued based on the fair market value of the services provided.During the year ended April 30, 2007, the Company entered
        into a Financial Advisory Agreement valued at $120,000 for services to
        be rendered over a one-year period. Part of this agreement stated that
        $60,000 was to be paid by issuance of the Companys shares of common
        stock. At the date of this obligation, 29,000 shares were issued when
        the value of the Companys stock was $2.07 per share. During the
        fiscal year ended April 30, 2008, the Company charged $12,500 (2007 
        $47,500) to operations for the pro-rata portion of stock-based compensation
        related to the services performed.During the fiscal year ended April 30, 2008, a consultant
        exercised 36,000 stock options with a fair value of $46,800 for services
        rendered; 50% was charged to research and development and the other 50%
        charged to a related party as per the agreement. (See Notes 2(f) and 3(h)).(d)
    Share Purchase WarrantsThe following table summarizes the continuity of the
        Companys warrants:  Weighted AverageNumber of
    
    
    Exercise PriceWarrants
    
    
    $Balance, April 30, 2006
    
    750,000
    
    
    0.80Exercised
    
    (255,833
    )
    
    0.80Exercised
    
    (13,000
    )
    
    1.00Issued
    
    2,252,000
    
    
    1.03Balance, April 30, 2007
    
    2,733,167
    
    
    1.02Issued
    
    873,950
    
    
    1.29Exercised
    
    (99,166
    )
    
    0.97Expired
    
    (455,001
    )
    
    1.00Balance, April 30, 2008
    
    3,052,950
    
    
    1.16 F-16   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  3.
    COMMON STOCK(Continued)(d)
    Share Purchase Warrants (Continued)At April 30, 2008, the following share purchase warrants
        were outstanding:  Exercise
    April 30,
    April 30,Expiry Date
    Price
    2008
    2007$
    #
    #November 30, 2007
    1.00
    
    252,500April 26, 2008
    1.00
    
    241,667October 15, 2009
    1.50
    40,000
    November 17, 2011
    1.00
    2,059,000
    2,119,000February 21, 2012
    1.50
    120,000
    120,000July 30, 2012
    1.50
    579,950
    October 4, 2012
    1.50
    32,000
    November 7, 2012
    1.50
    76,000
    December 17, 2012
    1.50
    95,000
    February 14, 2013
    1.50
    51,000
    Warrants outstanding
    
    3,052,950
    2,733,167  (e)
    On November 17, 2006, the Company entered into a Securities
        Purchase Agreement (equity line of credit), whereby an investor
        agreed to purchase up to $10,000,000 of the Companys common stock
        over a term of 36 months at the Companys discretion. Each purchase
        will be for a minimum of $150,000 and up to a maximum of the lessor of
        $750,000, or 200% of the average weighted volume for the Companys
        common stock for the 20 trading days prior to the date of purchase. Each
        purchase will be at a 15% discount to the market price of the Companys
        common stock over the 10 trading days prior to the purchase.In connection with the equity line of credit, the Company
        issued to the investor a warrant (Investor warrant) to purchase
        1,000,000 shares of the Companys common stock at $1.30 per share
        (the Exercise Price) for five years, and to an agent a warrant
        (Placement warrant) to purchase 640,000 shares of the Companys
        common stock at $1.30 per share for five years. If the Company fails to
        register the shares issuable upon the exercise of the Investor or Placement
        warrant, the holder is entitled to exercise the warrant and receive, for
        no consideration, a certificate equal to the number of shares obtained
        by subtracting the Exercise Price of the warrant for the volume weighted
        average price on the trading day immediately preceding the date of such
        election and multiplying that amount by the number of shares issuable
        upon the exercise of the warrant.The Company filed an SB-2 Registration Statement with
        the United States Securities and Exchange Commission that was declared
        effective February 9, 2007, to register shares of common stock potentially
        issuable under this equity line of credit (6,160,000 shares) and the related
        warrants (1,640,000 shares).Pursuant to the agreement, if the Company issues any
        common stock, or rights to acquire common stock at a price less than the
        Exercise Price, the Exercise Price will be adjusted to the lower price.
        In addition, the number of shares issuable will be increased such that
        the aggregate exercise price after adjustment is equal to the aggregate
        exercise price prior to adjustment.Subsequent to the issuance of the warrants, the Company
        completed an equity financing at $1 per share. The issuance of the Companys
        common shares lowered the Exercise Price of the Investor warrants to $1
        and increased the number of shares issuable upon exercise of the warrants
        to 2,132,000 shares, of which 73,000 have been exercised. The Company
        recognized the change in fair value of the warrants of $222,681 as share
        issuance costs.The Company has determined that, in accordance with
        SFAS 133, Accounting for Derivative Instruments and Fair Value
        Hedges, the warrants are not derivative instruments and, accordingly,
        guidance in EITF 00- 19, Accounting for Derivative Financial
        Instruments Indexed to, and Potentially Settled in, a Company's Own Stock,
        relating to net cash settlement versus net share settlement should be
        followed. The contract permits the Company to settle in unregistered shares,
        the Company has a sufficient number of unissued authorized shares available
        to settle the contract, and there is an explicit limit on the number of
        shares to be delivered in a share settlement. As the issuance of shares
        and, thus, the modification of the exercise price is wholly under the
        control of the Company and the Company has the ability to control net-settlement,
        these warrants have been classified as equity and their fair value of
        $1,338,725 has been recognized as share issuance costs. F-17   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  3.
    COMMON STOCK(Continued)(f)
    During the fiscal year ended April 30, 2008, the Company
        issued 13,500 shares at $0.25 per share upon the exercise of stock options
        for proceeds of $3,375.(g)
    During the fiscal year ended April 30, 2008, the Company
        issued 25,000 shares at $0.35 per share upon the exercise of stock options
        for proceeds of $8,750.(h)
    During the fiscal year ended April 30, 2008, the Company
        issued 36,000 shares at $1.30 per share upon the exercise of stock options
        for services rendered with a fair value of $46,800.(i)
    During the fiscal year ended April 30, 2008, the Company
        issued 86,666 shares at $1 per share upon the exercise of warrants for
        proceeds of $86,666.(j)
    During the fiscal year ended April 30, 2008, the Company
        issued 12,500 shares at $0.80 per share upon the exercise of warrants
        for proceeds of $10,000.(k)
    During the fiscal year ended April 30, 2008, the Company
        issued 833,950 units at $1 per unit pursuant to a private placement for
        cash proceeds of $786,780, net of issue costs of $47,170. Each unit consists
        of one share and one warrant. Each warrant enables the holder to purchase
        one additional share at an exercise price of $1.50 per share for five
        years after closing date.(l)
    During the fiscal year ended April 30, 2008, the Company
        increased its number of authorized shares without par value to 100,000,000.4.
    RELATED PARTY TRANSACTIONS(a)
    Amounts due to related parties are unsecured, non-interest
        bearing and due on demand. Related parties consist of companies controlled
        or significantly influenced by the President of the Company.(b)
    As part of an agreement with a professional law firm
        (the Law Firm) in which a partner of the firm is an officer
        and director of the Company, the Company agreed to pay a cash fee equal
        to 5% of any financings with parties introduced to the Company by the
        Law Firm. The Company also agreed to pay an equity fee equal to 5% of
        the equity issued by the Company to parties introduced by the Law Firm,
        in the form of options, warrants or common stock. During the fiscal year
        ended April 30, 2008, fees in the aggregate of $62,459 (2007 - $116,598)
        for legal services have been paid to the Law Firm.(c)
    During the fiscal year ended April 30, 2008, a company
        with common directors transferred 30,000 shares it holds of the Company
        to a consultant pursuant to a consulting agreement for services valued
        at $29,700. As at April 30, 2008, this was recorded as due to related
        parties.(d)
    During the fiscal year ended April 30, 2008, a Company
        controlled by the President of the Company purchased 71,000 units pursuant
        to a private placement for cash proceeds of $71,000.(e)
    During the fiscal year ended April 30, 2008, the value
        of consulting services of $90,000 (2007 - $90,000) was contributed by
        the President, CEO and director of the Company, charged to operations
        and treated as donated capital.(f)
    During the fiscal year ended April 30, 2008, the value
        of consulting services of $30,000 (2007 - $30,000) was contributed by
        the Vice President and director of the Company, charged to operations
        and treated as donated capital.(g)
    During the fiscal year ended April 30, 2008, the value
        of consulting services of $30,000 (2007 - $30,000) was contributed by
        the CFO, COO and director of the Company, charged to operations and treated
        as donated capital.(h)
    During the year ended April 30, 2008, rent of $nil (2007
        - $3,009) was paid to a company having common officers and directors.(i)
    During the fiscal year ended April 30, 2008, project
        management fees of $30,000 (2007 - $30,000) were paid to a company having
        common officers and directors. F-18   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  5.
    COMMITMENTS(a)
    Pursuant to a letter of understanding dated December
        13, 1993 between the Company, Rand and Reg (collectively called the grantors)
        and West Virginia University Research Corporation (WVURC),
        the grantors have agreed that WVURC shall own 5% of all patented technology
        with regards to RC/DC Engine technology and will receive 5% of all net
        profits from sales, licences, royalties or income derived from the patented
        technology.(b)
    Pursuant to an agreement dated August 20, 1992, the
        Company acquired the U.S. rights to the original RC/DC Engine from Rand.
        The Company will pay Rand and the original owner a net profit royalty
        of 5% and 1%, respectively.(c)
    The Company is committed to fund 50% of the further
        development of the RC/DC Engine.(d)
    The Company entered into an agreement with a professional
        law firm (the Law Firm) in which a partner of the firm is
        an officer and director of the Company. The Company agreed to pay a cash
        fee equal to 5% of any financings with parties introduced to the Company
        by the Law Firm. The Company also agreed to pay an equity fee equal to
        5% of the equity issued by the Company to parties introduced by the Law
        Firm, in the form of options, warrants or common stock. (See Note 4(b)).6.
    CONTINGENCIESLong outstanding accounts payable in the amount
        of $189,651 determined to be no longer payable have been written-off since
        inception.7.
    INCOME TAXESPotential benefits of income tax losses are
        not recognized in the accounts until realization is more likely than not.
        The Company has net operating losses of $8,589,000, which commence expiring
        in 2013. Pursuant to SFAS No. 109, the Company is required to compute
        tax asset benefits for net operating losses carried forward. The potential
        benefit of net operating losses has not been recognized in these financial
        statements because the Company cannot be assured it more likely than not
        will utilize the net operating losses carried forward in future years.
        For the years ended April 30, 2008 and 2007, the valuation allowance established
        against the deferred tax assets increased by $295,400 and $350,700, respectively.The components of the net deferred tax asset
        at April 30, 2008 and 2007 and the statutory tax rate, the effective tax
        rate and the elected amount of the valuation allowance are scheduled below:  April 30,
    
    
    April 30,2008
    
    
    2007$
    
    
    $Net Operating Losses
    
    8,589,000
    
    
    7,745,000Statutory Tax Rate
    
    35%
    
    
    35%Effective Tax Rate
    
    
    
    
    Deferred Tax Asset
    
    3,006,200
    
    
    2,710,800Valuation Allowance
    
    (3,006,200
    )
    
    (2,710,800
    )Net Deferred Tax Asset
    
    
    
    
     F-19   REGI U.S., Inc.(A Development Stage Company)Notes to the Consolidated Financial StatementsFor the years ended April 30, 2008 and 2007(Expressed in U.S. dollars)  7.
    INCOME TAXES(Continued)Pursuant to SFAS No. 109, the Company is required to
        compute tax asset benefits for non-capital losses carried forward. Potential
        benefit of non-capital losses has not been recognized in these financial
        statements because the Company cannot be assured it is more likely than
        not it will utilize the losses carried forward in future years.The reconciliation of income tax attributable to continuing
        operations computed at the statutory tax rates to income tax expense is:  April 30,
    
    
    April 30,2008
    
    
    2007$
    
    
    $Income tax benefit computed at U.S. statutory
      rates
    
    432,804
    
    
    494,653Stock-based compensation
    
    (84,535
    )
    
    (91,199
    )Compensation recognized as donated capital
    
    (52,500
    )
    
    (52,500
    )Non-deductible meals and entertainment
    
    (330
    )
    
    (225
    )Unrecognized tax losses
    
    (295,439
    )
    
    (350,729
    )Future income tax
      benefit
    
    
    
    
      8.
    SUBSEQUENT EVENTIn May, June, and July 2008, the Company issued 9,000
        shares at $1.30 per share upon the exercise of stock options for services
        rendered with a fair value of $11,700. F-20