UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K




(Mark
One)




x
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
fiscal year ended April 30,
2009


q
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from _______________________ to
_______________________




Commission
File No. 0-23920


REGI
U.S., Inc.


(Exact
name of registrant in its Charter)




Oregon
                91-1580146(State
      or Other Jurisdiction of
                (I.R.S.
      Employerincorporation
      or organization)
                Identification
      No)





#240-11780
Hammersmith Way
 Richmond,
BC V7A 5E9 Canada


(Address
of Principal Executive Offices)





(604)
278-5996


Registrant’s
telephone number







(Former
Name, former address and former fiscal year, if changed since last
report)











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





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




Title
      of each class
                Name
      of each Exchange on which registered:Common
                NASD
      Over the Counter Bulletin BoardCommon
                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  q  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:  YesqNox









Indicate
by check mark whether the registrant  (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.







(1)
            Yes
            
            x
            
            No
            
            
            (2)
            Yes
            
            x
            
            No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).    YesqNox







Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form
10-K       No  q




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filed, a non-accelerated filer, or a smaller reporting
company.





Large
      accelerated filer q
            Accelerated
      filer q
            Non-accelerated
      filer q
            Smaller
      reporting company x








Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes q       No
x




ISSUERS
INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS




Not
applicable





APPLICABLE
ONLY TO CORPORATE ISSUERS





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 August 17, 2009, computed by reference to the price at which the stock was
sold on that date: $ 4,600,000.





The
number of shares outstanding of the issuer's common stock, no par value, as of
August 17, 2009 was 28,036,824





Documents
incorporated by reference: See Exhibits.













REGI
U.S., INC.


FORM
10-K


TABLE OF
CONTENTS


PART 1
            4ITEM 1. DESCRIPTION OF BUSINESS
            4GENERAL
            4BUSINESS OF THE COMPANY AND PRODUCTS
            4Overview and History
            4PRODUCTS AND PROJECTS
            5Rand Cam Technology
            5Gasoline and Diesel Engine
            5Rand CamTM Generator and Fuel Cell
      Technology
            6RadMax® Technology
            6RadMax® Compressor and Pump
            9MARKETING
            10COMPETITION
            11RAW MATERIALS AND PRINCIPAL
    SUPPLIERS
            11PATENTS, TRADEMARKS, LICENCES, FRANCHISES, CONCESSIONS,
      ROYALTY AGREEMENTS, LABOR CONTRACTS, INCLUDING
DURATION
            12RISK FACTORS
            14ITEM 2.  DESCRIPTION OF
    PROPERTY
            17ITEM 3.  LEGAL PROCEEDINGS
            17ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
      SECURITY HOLDERS
            17PART II
            18ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED
      STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES
            18DIVIDEND POLICY
            19RECENT SALES OF UNREGISTERED
      SECURITIES
            20ITEM 6.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR
      PLAN OF OPERATIONS
            20LIQUIDITY AND CAPITAL RESOURCES
            21ITEM 7.  FINANCIAL STATEMENTS
            22ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
            23ITEM 8A.  CONTROLS AND
    PROCEDURES
            23ITEM 8B.  OTHER INFORMATION
            24None.
            24PART III
            24ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
      CONTROL PERSONS, AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a)
      OF THE EXCHANGE ACT
            24Audit Committee
            26ITEM 10.  EXECUTIVE
    COMPENSATION
            27ITEM 11.  SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS
            33ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS, AND DIRECTOR INDEPENDENCE
            35ITEM 13.  EXHIBITS
            36ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND
      SERVICES
            37SIGNATURES
            40













THIS
ANNUAL REPORT ON FORM 10-K, INCLUDING EXHIBITS THERETO, CONTAINS FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE WORDS
"ANTICIPATES", "BELIEVES", "EXPECTS", "INTENDS", "FORECASTS", "PLANS", "FUTURE",
"STRATEGY", OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING
STATEMENTS, INCLUDING THOSE DESCRIBED IN "RISK FACTORS" IN THIS FORM 10-K. WE
ASSUME NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT
ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS
REGULATED BY LAW.





PART I





ITEM1.   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.  Rand
Energy Group Inc., a privately held British Columbia corporation ("Rand Energy")
holds approximately 5% 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 a
development stage company engaged in the business of developing and building an
improved axial vane-type rotary engine known as the RadMax® rotary technology
(the "Technology" or the “RadMax® Engine”), used in the design of lightweight
and high efficiency engines, compressors and pumps. The Company has a project
cost sharing agreement, whereby it will fund 50% of the further development of
the RadMax® Engine and Reg Tech will fund 50%.





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





BUSINESSOF THE COMPANY AND PRODUCTS





Overviewand History





We are
engaged in the business of developing and building an improved axial vane-type
rotary engine used in the design of lightweight and high efficiency engines,
compressors and pumps. The worldwide intellectual and marketing rights to the
RadMax® Engine, exclusive of the United States, are held by Reg Tech. The
Company owns the U.S. marketing and intellectual rights and has a project cost
sharing agreement, whereby it will fund 50% of the further development of the
RadMax® Engine and Reg Tech will fund 50%.










The
RadMax® Engine is a variation of the Original Engine (originally referred to as
the RadMax® Engine), an axial vane rotary engine.





Pursuant
to an agreement dated October 20, 1986 between Reg Tech, Rand Cam-Engine Corp.
and James McCann, Reg Tech agreed to acquire a 40% voting interest in a new
corporation to be incorporated to acquire the rights to the Original Engine. The
new corporation was Rand Energy Group Inc. (“Rand Energy”). Pursuant to an
agreement made as of April 27, 1993 among Reg Tech, Rand Cam-Engine Corp., Rand
Energy and James McCann, Reg Tech acquired an additional 330,000 shares (11%) of
Rand Energy from Rand Cam-Engine Corp. to increase its investment to
51%.





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





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





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





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





We have
tested the RadMax® Engine technology for interested customers.  To
date we have granted an option for a license for certain applications for a
Fortune 1000 company who are evaluating the RadMax® Engine design and are
currently assisting in the development and testing at no cost to the
Company.





PRODUCTSAND PROJECTS





RandCam Technology





Gasolineand 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 was fundamentally sound
and that with a program of engine review, design, testing and development, a
technically successful range of engines could be developed. The 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
RandCamTM 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 further
prototype of the diesel engine was assembled and tested.





In
January 2006 several continuous successful combustion tests were completed at
245 RPM on the new Rand CamTM engine prototype. Spin tests were conducted
initially up to 800 RPM on the new modified version of the Rand CamTM engine.
There was an insignificant amount of wear on the engine over several
months.





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





RandCamTM Generator and Fuel Cell Technology





In April,
2005 the Rand CamTM engine was tested for generator and hybrid car
applications.  We utilized 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.   We entered into a
distributors agreement in June, 2005, to acquire rights to distribute fuel cell
technology for Canada and Europe, which was ultimately assigned to our
affiliate, Reg Tech.





Production
and building of the fuel cell components commenced, and delivery to Reg Tech was
scheduled to begin upon successful training and export approvals. Due to
financial problems with the distributor, the agreement was
cancelled.





RadMax®  Technology





In
February, 2004 we completed testing of the prototype 42 H.P. diesel engine 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.


In
February 2006 we received the 125 H.P. RadMax® diesel engine from Radian
Milparts, tested by the Company’s rotary engine specialist. The 125 H.P. RadMax®
diesel engine is the improved version of the 42 H.P. RadMax® diesel engine,
which focused on eliminating leak paths and was designed for
maintainability.





During
2006, final modifications were successfully implemented on the 42 H.P RadMax®,
for the 125 H.P. version of the RadMax® engine completed by Ebco Industries.
Testing consisted of endurance tests which determined 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 were utilized.  Testing lead to several important
modifications which eliminated oil leaks from entering the combustion chamber,
and reduced compression losses.









In
January 2007, the RadMax® 125 hp diesel engine design was evaluated through
computer modeling to determine mechanical, rotational and thermal stress;
analysis contact forces; and engine resonant frequencies.  The 42
horsepower RadMax® diesel engine and compressor prototypes were designed and
concept tested.




On May
14, 2008 we entered into an agreement with a Fortune 1000 company (“evaluation
company”) to evaluate the RadMax® Engine technology.  The agreement
covers the evaluation of RadMax® Engine technology by the evaluation company to
determine if the RadMax® technology meets the evaluation company’s requirements
for certain aerospace 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 RadMax® intellectual property 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 RadMax® Engine IP for certain aerospace,
commercial and military markets.




In
October 2008 the Company hired Paul Porter, an engineer with exclusive sealing
and mechanical engineering background.  In January 2009 the Company
hired Allen Macknight a Thermal Engineer, who is recently retired from
Honeywell, to consult on the development of the RadMax® Engine
design.





REGI
engineering commenced and completed the detailed design modeling for the RadMax®
diesel engine using COSMOS, a design and analysis tool, verifying and improving
the design with respect to stress (finite element analysis), temperature
(thermal analysis), and material properties (metallurgy).  The
analysis provided by COSMOS will be applied against all RadMax® design
components including the rotor, cam, stator, vanes, and seals.





Following
the successful completion of the COSMOS analysis, and review /approval by the
evaluation company’s engineers and executives, our plans are to commence
building the prototype diesel engine.  Testing the prototype will be a
joint effort with the evaluation company.





The
process of bringing a working prototype through a successful test program is a
challenging effort. We originally estimated the time for completion of the
prototype at approximately April 2009.  However, the scope and depth
of technical reviews and analysis by the evaluation company’s engineers, while
leading towards a significantly more robust design, delayed release of
manufacturing drawings for competitive procurement.





The
Company extended the term of the evaluation agreement with the evaluation
company until December 31, 2009.  All other terms of the evaluation
agreement remain the same.  The Company believes the additional time
spent, by both engineering teams, preparing and running computer simulations and
analyzing models of the RadMax® Engine design, prior to fabrication of a
prototype, will shorten the total development time, and will increase the
probability of success of a working model prototype for the diesel
engine.




On May
22, 2009 drawings were released to start fabrication of a RadMax® Engine test
rig.  The test rig is designed to test multiple versions of the
RadMax® vane actuation systems. A cam device, driven by a variable speed motor,
will propel the vane through its full range of axial motion prior to the
implementation of a full scale RadMax® prototype.  The purpose of the
test rig is to verify the vane actuation system design and make any
modifications indicated by the tests prior to the implementation of a full scale
prototype.  Flexibility in design will allow testing of an alternate
vane actuation system, currently under development with the evaluation
company.















When
testing commences, the test rig shall provide validation of vane motion,
measurement position
tracking, induced vibration, required forces, and other parameters. Potential
future capabilities under consideration include adding high speed video to
“capture” instantaneous changes in motion, balance and vibration, harmonics, and
thermal cycling to measure changes as a result of temperature
extremes.




We
estimated that the test rig design could be completed in 4 to 6 weeks, and then
commence the fabrication of the diesel engine application for the evaluation
company.  We believe the testing of these important aspects of the
evaluation company’s diesel engine application will determine the final design
and fabrication will be the next important milestone.




Following
completion of reviews by the evaluation company, and the COSMOS analysis, a
Request for Proposals (RFP) was issued to three pre-qualified bidders to provide
a fixed-price quotation versus a formal Statement of Work (SOW). The RFP was
released 12 June 2009. We offered a 30-day period for review of drawings, and
responses to questions. After the review period, bidders will have 10 days to
submit a quotation and schedule for each line item. The closing date of the open
discussion period was 10 July 2009. The closing date for receipt of the
proposals is 28 July 2009. When proposals are received, and a comparative
analysis performed, we will have fixed-price quotations for expected cost and
schedule. We will require 2-3 weeks to perform a comparative analysis of
proposal, and then plan to make an award to the most responsible and compliant
bidder.




With this
approved design, the RadMax® Diesel Engine test program will start shortly after
receipt of the RadMax® parts and assemblies. The tests will initially validate
seal performance, vane actuation, pressurization, and lubrication. A series of
tests will verify other technology areas, already proven by extensive
analysis.





The phase
1 tests will validate the mechanical, sealing, and friction aspects of the
engine design to quantify inherent parameters and validate the results of
analysis, as follows:





·
            Verify Weight and Dimensions of
      Each Component


·
            Trial
  Assembly


·
            Final
  Assembly


·
            Trial Fitment of Engine
      Accessories


·
            Test Stand Preparation and Engine
      Installation on Test Stand


·
            Cold Performance Motoring
      Tests


·
            Increased RPM Performance
      Motoring Test. Increase RPM


·
            High Speed Performance
      Testing


·
            Repeat Steps 1 to 8 With
      Alternate Seal Configurations





All tests
steps must result in success. Failure of any test step requires retest of that
step, which might include redesign or rework of parts and assemblies. The
ultimate success of the phase 1 tests is to measure pressure and temperature
increase in the RadMax® Diesel Engine sufficient to sustain continuous
combustion.





The phase
1 test schedule is estimated at 3 months following receipt of the delivered
RadMax® Diesel Engine parts and assemblies. The test location will be determined
by competitive bid.





Following
successful completion of the phase 1 tests, the phase 2 tests will validate
thermodynamics and cooling aspects of the technology. Some RadMax® Diesel Engine
parts and assemblies could require modification. We anticipate that such
modifications, if any, will be minor.












The phase
2 tests require the integration of engine accessories and sensors as
follows:





·
            Cooling management (radiator,
      hoses, fan, water pump, etc.)


·
            Lubrication oil management (sump,
      pump, hoses, filter, etc.),


·
            Fuel management (common rail
      injection system, fuel lines, fuel injectors, fuel tank,
    etc.)


·
            Ignition management (control
      unit, sensors, wiring, etc.)


·
            Starting management (starter,
      battery, cables, etc.)


·
            Air management (plenum, hoses,
      filter, muffler, etc.)





The phase
2 tests are summarized by the following:





·
            Hot Performance Starting Tests,
      with fuel


·
            Hot Performance One-Minute Test,
      with fuel


·
            Hot Performance Multiple-Minutes
      Test, with fuel


·
            Hot Performance Starting Tests,
      with fuel


·
            Hot Performance One-Minute Test,
      with fuel


·
            Hot Performance Multi-Minute
      Test, with fuel


·
            Post Engine Test, Teardown and
      Inspection


·
            Performance Measurement (one-hour
      run-in)


·
            Endurance Measurement (three-hour
      run-in)


·
            Develop Horsepower vs. Torque
      Curves


·
            24 X 7
  Test





The phase
2 test schedule is estimated at 3 months following receipt successful completion
of the phase 1 tests. The test location will be determined by competitive bid.
The successful bidder must have the requisite facilities, equipment, and
personnel to perform the tests, which characterize the RadMax® Diesel Engine.
The characterization consists of performance curves for power, torque, and fuel
consumption.





The
objective of the new improved diesel engine design is to make significant
improvement over all existing engine designs in use today.  The
RadMax® engine reduces weight, number of parts, and complexity, and will use
less fuel, and, therefore, reduce hydrocarbons.





The
design incorporates changes recommended to date by us and the evaluation
company. Engineers have analyzed the stress deflections of the vane actuator
forces and these are now acceptable for the new diesel engine
implementation.





RadMax® TM Compressor and Pump





We
designed and built a prototype 3.2 SCFM [define] air compressor for a large fuel
cell customer.   Testing displayed encouraging results of up to
25 P.S.I. with only 800 R.P.M., and exceeded our expectations.  A
license agreement for compressor applications was not finalized.





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.





In March
2007, the RadMax®125 hp prototype pump fabrication was completed and prototype
radial shaft seals were integrated to eliminate leakage between rotors and
cams.  In July 2007 further pump testing was completed.  The
following is a summary of the product development to date:












Performance
measurements of prototype of RadMax® pump completed.




·
            Axial
      Vane Positive Displacement Pump efficiency validated greater than
      80%.






·
            Proprietary
      RadMax® radial shaft seals were 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 was
      underway.






·
            Proprietary
      material to coat internal surfaces to facilitate safe run-dry
      operation.




·
            The
      RadMax® Compressor includes many components common to RadMax® Pump, which
      reduces production unit cost, and is designed for any gaseous use (air,
      refrigerant, carbon dioxide, etc.)





In
October 2007, the prototype, proof-of-concept pump was completed. This pump was
suitable for supporting demonstration to potential customers displaying
performance that the RadMax® Pump is a positive displacement device, capable of
processing approximately twice its internal volume every revolution. We felt
this could indicate 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, and fluid to be
pumped. 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 included the following metrics
and results:





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





MARKETING





The
worldwide intellectual and marketing rights to the RadMax® Engine, exclusive of
the United States, are held by Reg Tech. The Company owns the U.S. marketing and
intellectual rights.





A United
States patent was issued for the Rand CamTM Engine (originally referred to as the
RC/DC Engine) on July 4, 1995, and assigned to us. Since no marketable product
has yet been developed, we have not received any revenues from
operations.









The
RadMax® 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 RadMax® 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.





We intend
to pursue the development of the RadMax® 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 RadMax®
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.





RAWMATERIALS 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 testing or
manufacture of its potential products.












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





Patents





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.





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 RadMax® 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 RadMax® 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 RadMax® Engine. WVURC
performed extensive analysis and testing on the RadMax® engine. WVURC provided
support and development of the RadMax® Engine including research, development,
testing evaluation and creation of intellectual property. In addition, WVURC
introduced us to potential customers and licensees.   Rand Energy
and Reg Tech are entitled to all intellectual property developed by WVURC
relating to the RadMax® Engine.





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 RadMax® 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
RadMax® 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.





A
Canadian Patent was issued for the Rand CamTM 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 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 CamTM
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
CamTM 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 RadMax® Engine for a generator application for
hybrid electric cars.  Additionally, our licensee for the 42 H.P.
production model diesel RadMax® 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-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 RadMax® Engine.





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









RISKFACTORS





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 RadMax® Engine which we are developing must be
technologically superior or at least equal to other engines that competitors
offer and must have a competitive price/performance ratio to adequately
penetrate its potential markets. If we are not able to achieve this condition or
if we do not remain technologically competitive, we may be unprofitable and our
investors could lose their entire investment. There can be no assurance that we
or potential licensees will be able to achieve and maintain end user acceptance
of our engine.





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





Need for
Additional Capital.  We rely on our ability to raise capital through
the sale of our securities.  Our the ultimate success will depend upon
our ability to raise additional capital or to have other par­ties bear a
portion of the required costs to further develop or exploit the potential market
for our products.  Reg Tech and REGI have agreed to provide the
necessary funds for the development of the RadMax® 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 RadMax® Engine which we are developing
must be technologically superior or at least equal to other engines which our
competitors offer and must have a competitive price/performance
ratio









to
adequately penetrate our potential markets.A number of rotary
engines have been designed over the past 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.





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, 2009, of $11,423,153.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.





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.





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-K 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.





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® 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® Engine and other products.





During
the last two fiscal years, we have incurred a total of $293,134 in research and
development expenses.  During the past year, development costs have
been assumed by a third party who is evaluating the RadMax® Engine
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 three consultants directly involved in technical development work
on the RadMax® 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.





ITEM2.   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 several companies related by common officers and
directors.  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.





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.  This agreement was not renewed and during 2009 no rent
was paid for a Spokane office.





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





ITEM3.   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.





ITEM4.   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, 2009, through the solicitation of proxies or
otherwise.









PARTII





ITEM5.   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.





There is
also a limited public market for our common stock which began trading on May 1,
2006, on the Frankfurt Stock Exchange under the symbol (RGJ). International
Security Identification Number (ISIN/CUSIP) number is US7589431045.





The
following table sets forth the high and low 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.








Bid
Price                                   Asked
Price


High
                
                
                Low
                
                
                High
                
                
                LowQuarter
      Ended July 31, 2007
                
                $
                1.50
                
                
                $
                1.02
                
                
                $
                1.52
                
                
                $
                1.05Quarter
      Ended October 31, 2008
                
                
                1.17
                
                
                
                0.93
                
                
                
                1.19
                
                
                
                0.97Quarter
      Ended January 31, 2008
                
                
                1.18
                
                
                
                0.68
                
                
                
                1.19
                
                
                
                0.76Quarter
      Ended April 30, 2008
                
                
                1.01
                
                
                
                0.70
                
                
                
                1.02
                
                
                
                0.74Quarter
      ended July 31, 2008
                
                
                0.89
                
                
                
                0.63
                
                
                
                0.9
                
                
                
                0.7Quarter
      ended October 31, 2008
                
                
                0.74
                
                
                
                0.27
                
                
                
                0.75
                
                
                
                0.3Quarter
      ended January 31, 2009
                
                
                0.37
                
                
                
                0.18
                
                
                
                0.44
                
                
                
                0.22Quarter
      ended April 30, 2009
                
                $
                0.38
                
                
                $
                0.18
                
                
                $
                0.4
                
                
                $
                0.23





(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
                
                
                LowJuly
      2009
                
                $
                0.31
                
                
                $
                0.22June
      2009
                
                
                0.28
                
                
                
                0.18May
      2009
                
                
                0.3
                
                
                
                0.2April
      2009
                
                
                0.32
                
                
                
                0.2March
      2009
                
                
                0.362
                
                
                
                0.18February
      2009
                
                $
                0.38
                
                
                $
                0.28




_________


*
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
August 3, 2009, there were 28,036,824 shares of common stock outstanding, held
by 265 shareholders of record.












DIVIDENDPOLICY





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, 2009.





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)
                
                
                1,743,000
                
                
                $
                1.16
                
                
                
                757,000Equity
      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
      (1,743,000 options) is $1.16.







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




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







(i)
            Up
      to 25% of the option may be exercised at any time during the term of the
      option, such initial exercise is referred to as the “First
      Exercise”.




(ii)
            The
      second 25% of the option may be exercised at any time after 90 days from
      the date of First Exercise, such second exercise is referred to as the
      “Second Exercise”.




(iii)
            The
      third 25% of the option may be exercised at any time after 90 days from
      the date of Second Exercise, such third exercise is referred to as the
      “Third Exercise”











(iv)
            The
      fourth and final 25% of the option may be exercised at any time after 90
      days from the date of the Third
Exercise.




(v)
            The
      options expire sixty months from the date of
  grant.









All
options granted to April 30, 2009 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.







RECENTSALES OF UNREGISTERED SECURITIES





No
issuance and sales of our securities occurred without registration during the
last fiscal year.








ITEM6:   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 RadMax®
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 $11,423,153 and further losses are expected
until we complete a licensing agreement with a manufacturer and
reseller.  At April 30, 2009, we had working capital deficiency of
$754,665. Our only assets are related party receivables totaling $260,136 and
prepaid expenses, totaling $4,500. These factors raise substantial doubt about
our ability to continue as a going concern.  Our ability to emerge
from the development stage with respect to our planned principal business
activity is dependent upon our









successful
efforts to raise additional equity financing, receive funding from affiliates
and controlling shareholders, and develop a market for our
products.





RESULTS
OF OPERATIONS





Results
of operations for the year ended April 30, 2009 ("2009”) compared to the year
ended April 30, 2008 ("2008")





There
were no revenues from product licensing during 2009 and 2008.





The
Company had a net loss of $994,466 in 2009, compared to a net loss of $1,236,583
in 2008 resulting in a decrease of $242,117.  This decrease in 2009
was mainly due to a focused effort to reduce costs while completing testing and
design of the RadMax®
engine.  Investor relations decreased from $177,610 in 2008 to $92,351
in 2009 for a difference of $85,259 as the Company did not renew consulting
contracts and focused on publications.  Wages and benefits decreased
from $165,752 in 2008 to $97,501 in 2009 resulting in a variance of $68,251 with
the release of an employee.  Travel declined from $96,776 in 2008 to
$34,568 in 2009 providing a decrease of $62,208 as the Company focused less on
promotion during the economic downturn in the investment market.  Our
advertising expenses decreased by $39,558 to $1,200 in 2009 as compared to
$40,758 in 2008 as contracts were not renewed.  Offsetting these
decreases was an increase in stock-based compensation of $69,435 to $291,857 in
2009 and an increase in research and development of $23,240 to $158,187 in 2009,
as the Company hired specialized consultants to complete testing and design of
RadMax®
engine.  The majority of prototype construction and testing costs
continue to be borne by potential licensees and manufacturers.





During
the year ended April 30, 2009, the Company extended the term on 75,000 options
for a further three years.  The fair value of the original options was
deducted from the fair value of the modified options for a difference of
$5,912.





During
the fiscal year ended April 30, 2009, the Company granted 250,000 common stock
warrants with a fair value of $52,042 in accordance with the terms of the Option
Agreement as described in Note 4 of the financial statements.





As of
April 30, 2009, the Company owed related companies controlled or significantly
influenced by the President of the Company $863,194 (April 30, 2008 - $546,397)
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. The Company had amounts due from related parties
totaling $260,136 at April 30, 2009 (April 30, 2008 - $394,963).





We had a
basic and diluted loss of $0.04 per share in 2009 compared to a basic and
diluted net loss per share of $0.04 for 2008.





LIQUIDITYAND CAPITAL RESOURCES





During
2009, with the downturn in the financial market, we financed our operations
mainly through proceeds of $451,624 from related parties.





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 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, net of issuance









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 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.





We
received funding in 2009 from our affiliated companies (common officers and
directors) and our 17% shareholder, Rand Energy and Reg Tech, the controlling
shareholder of Rand Energy. The total amount owing to related parties is
$863,194 or 85% of total liabilities as of April 30, 2009.  This
funding was necessary with a downturn in the financial market to complete the
RadMax engine and place the Company in a position to attain
profit.  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 of
April 30, 2009, we had a working capital deficiency of $754,665.  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 2,503,141 sharesand 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 2 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 2.  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 4 to our financial statements).  The
Company may also raise additional funds through the exercise of warrants and
stock options, if exercised.





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, 2010
will remain consistent with those for the fiscal year ended April 30,
2009.  These costs are identified as master design integrator, prototype
fabrication, and labour expense, estimated approximately as US$200,000 each,
with planned expenditure over the next 6 months.





ITEM7.   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.












ITEM8.   CHANGES IN AND DISAGREEEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





None.





ITEM8A. CONTROLS AND PROCEDURES.





Disclosure
controls and procedures, as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934 (the "Exchange Act"), are controls and other procedures of
the Company that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Act is accumulated and communicated to the
Company’s management, including its Chief Executive Officer and Chief
Financial Officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.  As required by
Rule 13a-15 under the Exchange Act, the Company carried out an evaluation of the
effectiveness of the design and operation of its disclosure controls and
procedures as of April 30, 2009, being the date of the Company’s most recently
completed fiscal year end. This evaluation was carried out under the supervision
and with the participation of the Company’s management, including Mr. John
Robertson, the Company’s Chief Executive Officer, and Mr. James Vandeberg, the
Company’s Chief Financial Officer.





As of
April 30, 2009, management conducted an evaluation of our disclosure controls
and procedures pursuant to the Securities Exchange Act of 1934. Based upon that
evaluation, management has concluded that our current disclosure controls and
procedures are not effective as of April 30, 2009.




The
conclusion that our disclosure controls and procedures were not effective was
due to the presence of material weaknesses in internal control over financial
reporting as identified below.  Management anticipates that such
disclosure controls and procedures will not be effective until the material
weaknesses are remediated. Our Company intends to remediate the material
weaknesses as set out below.





(b)           Management’s
Annual Report on Internal Control over Financial Reporting





The
Company’s board of directors and audit committee are responsible for
establishing and maintaining adequate internal control over financial
reporting.  The Company’s internal control system was designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation and fair presentation of its consolidated financial
statements for external purposes in accordance with generally accepted
accounting principles.





The
Company’s Chief Executive Officer, Mr. John Robertson, and the Company’s Chief
Financial Officer, Mr. James Vandeberg, assessed the effectiveness of the
Company’s internal control over financial reporting (as defined in Rule
13a-15(f) and Rule 15d-(f) promulgated under the Exchange Act) as of April 30,
2009.





Based on
management’s evaluation, we concluded our internal control over financial
reporting was not effective as at April 30, 2009 due to inadequate segregation
of duties and effective risk assessment.











We plan
to take steps to enhance and improve the design of our internal controls over
financial reporting. During the period covered by this annual report, we have
not been able to remediate the material weaknesses identified above. To
remediate such weaknesses, we plan to appoint additional qualified personnel to
address inadequate segregation of duties and ineffective risk management, and
adopt sufficient written policies and procedures for accounting and financial
reporting. These remediation efforts are largely dependent upon securing
additional financing to cover the costs of implementing the changes required. If
we are unsuccessful in securing such funds, remediation efforts may be adversely
affected.




Notwithstanding
the foregoing, all internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
may not prevent or detect misstatements and can provide only reasonable
assurance with respect to financial statement preparation and presentation.
Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.





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








ITEM8B. OTHER INFORMATION.




None.






PARTIII




ITEM9.   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
              PositionJohn
      G. Robertson
              68
              Director,
      Chairman of the Board of Directors, President and Chief Executive
      OfficerJennifer
      Lorette
              37
              Director,
      Vice-PresidentJames
      Vandeberg
              65
              Director,
      Chief Operating Officer and Chief Financial OfficerBrian
      Cherry
              69
              Vice
      President













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





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 – Director, Chairman of the Board of Directors, President and Chief
Executive Officer





Mr.
Robertson has been our Chairman, President and Chief Executive Officer since our
formation in July, 1992.
Since October 1984 Mr. Robertson has been President and a Director of Reg
Technologies Inc., a British Columbia corporation listed on the TSX Venture
Exchange that has financed the research on the RadMax® Engine since 1986. REGI
U.S. is controlled by Rand Energy Group, Inc., a British Columbia corporation of
which Reg Technologies Inc. is the majority shareholder. REGI U.S. owns the U.S.
rights to the RadMax® Engine technology and Reg Technologies Inc. owns the
worldwide rights exclusive of the U.S. Mr. Robertson is a Director and President
and Secretary of Rand Energy Group Inc. Mr. Robertson is President, Principal
Executive Officer and a member of the Board of Directors of IAS Energy, Inc., an
Oregon corporation traded on the 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 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 – Director and 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 RadMax® Engine since 1986. REGI
U.S. is controlled by Rand Energy Group, Inc., a British Columbia corporation of
which Reg Technologies Inc. is the majority shareholder.  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 – Director, Chief Operating Officer and Chief Financial
Officer









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 Energy, 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 TSX Venture Exchange and the OTC BB.  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, RadMax® 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, RadMax® 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.








AuditCommittee





Our Audit
Committee consists of three Directors of the Company – John Robertson, James
Vandeberg and Jennifer Lorette.





We do not
currently have a financial expert in our audit committee due to our relatively
small size.  In 2009, we relied upon the services of a chartered accounting
firm in Vancouver, BC, Canada, to prepare our interim unaudited quarterly
consolidated financial statements.





Moreover,
the audit committee is comprised of seasoned business professionals, whereby two
members each have over 30 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.





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.





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.





ITEM10.  EXECUTIVE COMPENSATION





STATEMENT OF EXECUTIVE
COMPENSATION





The
Company is required, under applicable securities legislation in Canada, to
disclose to its Shareholders details of compensation paid to its directors and
officers.  The following fairly reflects all material information
regarding compensation paid by the Company to its directors and officers, which
information has been disclosed to the Company's Shareholders in accordance with
applicable Canadian law.





Executive
Compensation





Compensation
Discussion and Analysis





The
Company’s executive officers make recommendations to the board of directors
regarding compensation policies and the compensation of senior
officers.  The Company does not have a Compensation
Committee.  The compensation of the senior executives comprises two
components; namely, a base salary or consulting fees and the grant of stock
options pursuant to the Company’s stock option plan which is more particularly
outlined below under the Option-based Awardssection.   These forms of compensation are chosen to
attract, retain and motivate the performance of selected directors, officers,
employees or consultants of the Company of high caliber and
potential.  Each senior executive is employed for his or her skills to
perform specific tasks and the base salary and number of options is fixed
accordingly.





Option-based
Awards





The grant
of option-based awards to the senior executives is determined by the
recommendation of executive officers to the board of directors pursuant to the
terms of the stock option plan referred to below. Previous grants of
option-based awards are taken into account when considering new
grants.





The
options are always granted at market price. The valuation of the fair value of
the options at the time of the grant is based on the Black Scholes model and
includes the following assumptions: weighted average risk free rate, weighted
average expected life, expected volatility and dividend yield.





During
the year ended April 30, 2009, no option-based awards for executives were
granted.  However, the Company extended the term on 75,000 options for
a further three years to an executive.  The fair value of the original
options was deducted from the fair value of the modified options for a
difference of $5,912.




Summary
Compensation Table















Named
Executive Officer mean the Chief Executive Officer (“CEO”), the Chief Financial
Officer (“CFO”) or any individual acting in a similar capacity or function,
regardless of the amount of compensation of that individual and each of the
Company’s three most highly compensated executive officers, other than the CEO
and CFO, or three most highly compensated individuals acting in similar
capacities, who were serving as executive officers, or in a similar capacity, at
the end of the most recent financial year and whose compensation exceeds
CDN$150,000, and such individuals who would be an NEO but for the fact that they
were not serving as an executive officer or in a similar capacity at the end of
that financial year.





During
the Company’s last completed financial year ended April 30, 2009, the Company
had two Named Executive Officers: Mr. John Robertson, President and CEO, and Mr.
James Vandeberg, COO and CFO.





The
following table (presented in accordance with Form 51-102F6 – Statement of
Executive Compensation (“Form 51-102F6”) under National Instrument 51-102 –
Continuous Disclosure Obligations) sets forth all annual, long term and other
compensation for services in all capacities to the Company and its subsidiaries
payable to the NEOs for the three financial years ended April 30, 2009, 2008,
and 2007 (to the extent required by the Regulations) in respect of the Named
Executive Officers:




Non-equity
      incentive plan compensation
                  ($)Name
      and Principal Position
                Year
      Ended
                  April
      30
                Salary
                  ($)
                Share-
      based Awards
                  ($)
                Option-
      Based Awards
                  ($)
      (6)
                Annual
      incen-
                  tive
      plans
                  ($)
                Long-term
      incentive plans
                  ($)
                Pension
      value
                  ($)
                All
      other
                  Compen-sation
                  ($)(5)
                Total
                  compensation
                  ($)John
      G. Robertson, CEO(1)(2)(3)
                2009
                  2008
                  2007
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                130,753
                  131,111
                  6,448
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                30,000
                  30,000
                  30,000
                160,753
                  161,111
                  36,448James Vandeberg,
      CFO(4)(5)
                2009
                  2008
                  2007
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                26,151
                  26,222
                  1,290
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                26,151
                  26,222
                  1,290




(1)
            Mr.
      Robertson is also a director and does not receive compensation in that
      capacity. See “Director Compensation – Narrative
    Discussion”.


(2)
            Access Information Services,
      Inc., a Washington corporation which is owned and controlled by the
      Robertson Family Trust, 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.  This amount for fiscal 2009
      (and fiscal 2008 and 2007) has been
paid.


(3)
            Mr.
      Robertson’s option-based awards granted during 2007 consisted of 500,000
      stock options which were granted on April 12, 2007 at an exercise price of
      CDN$1.30 and fair value of CDN$0.849 per
share.


(4)
            Mr.
      Vandeberg is also a director and does not receive compensation in that
      capacity. See “Director Compensation – Narrative
    Discussion”


(5)
            Mr.
      Vandeberg’s option-based awards granted during 2007 consisted of 100,000
      stock options which were granted on April 12, 2007 at an exercise price of
      CDN$1.30 and fair value of CDN$0.849 per
share.


(6)
            The
      value of perquisites received by each of the NEOs, including property or
      other personal benefits provided to the NEOs that are not generally
      available to all employees, were not, in the aggregate, greater than
      $50,000 or 10% of the NEOs total salary for the financial
      year.


(7)
            The
      valuation of the fair value of the options at the time of the grant is
      based on the Black Scholes model and includes the following assumptions;
      weighted average risk free rate, weighted average expected life, expected
      volatility and dividend yield.












Narrative
Discussion





The
Company does not have a share-based award plan other than the stock option plan
referred to above. The Company also does not have a pension plan or a long term
incentive plan.





Employment
Contracts and Termination of Employment





There are
no employment agreements or other compensating plans or arrangements with regard
to any of the Named Executive Officers which provide for specific compensation
in the event of resignation, retirement, other termination of employment or from
a change of control of the Issuer or from a change in a Named Executive
Officer’s responsibilities following a change in control.





Pursuant
to the Company’s stock option plan, in the event the optionee’s employment by or
engagement with (as a director or otherwise) the Company is terminated by the
Company for any reason other than death before exercise of the options granted
hereunder, the stock  option granted to the Participant shall
immediately expire and all rights to purchase shares thereunder shall
immediately cease and expire and be of no further force or effect.





In the
event the Participant resigns as an employee, the stock option granted to the
Participant shall immediately expire and all rights to purchase shares
thereunder shall immediately cease and expire and be of no further force or
effect.





Refer
also to the Compensation
Discussion and Analysissection above.





Incentive Plan
Awards





Narrative
Discussion





As
reported above under the Summary Compensation Table,the Company does not have a share-based award plan or a long term
incentive plan.  Information with respect to the grant of stock
options is more particularly described above in the Option-based Awardsand Compensation Discussion and Analysissections.





Outstanding
Option-Based Awards and Share-Based Awards





No
option-based awards were granted to the NEOs at the end of the most recently
completed financial year.  The following table sets out the
option-based awards that are currently outstanding as at the end of the most
recently completed financial year.












Option-based
      Awards
                
                
                Stock-based
      AwardsName
                
                Number
      of
                  securities
      underlying unexercised options
                  (#)
                
                
                Option
      exercise price
                  ($)
                
                Option
      expiration date
                
                Value
      of unexercised in-the-money options
                  ($)
                
                
                Number
      of shares or units of shares that have not vested
                  (#)
                
                
                Market
      or payout value of share-based awards that have not vested
                  ($)John
      Robertson
                
                
                500,000
                
                
                
                1.30
                
                April
      12, 2012
                
                
                N/A
                
                
                
                250,000
                
                
                
                212,250James
      Vandeberg
                
                
                100,000
                
                
                
                1.30
                
                April
      12, 2012
                
                
                N/A
                
                
                
                50,000
                
                
                
                42,450





Incentive
Plan Awards – value vested or earned during the year





No
incentive stock options were granted to any NEOs during the year ended April 30,
2009.





No
incentive stock options vested during the year ended April 30, 2009 which were
held by the NEOs.





During
the year ended April 30, 2009, neither of the two NEOs exercised or sold
options.  There were 600,000 unexercised options at the financial year
end held by the NEOs, none of which were in-the-money.





Pension Plan
Benefits





As
reported under the Summary
Compensation Table, the Company does not maintain a Pension Plan for its
employees and therefore no benefits were received.







Termination of Employment or
Change of Control







Other
than as described in the Narrative Discussionsection
under the Summary Compensation
Table, the Company has no plans or arrangements with respect to
remuneration received or that may be received by the Named Executive Officers
during the Company’s most recently completed financial year or current financial
year in view of compensating such officers in the event of termination of
employment (as a result of resignation, retirement, change of control, etc.) or
a change in responsibilities following a change of control, where the value of
such compensation exceeds $150,000 per executive officer.





DIRECTOR
COMPENSATION





Director
Compensation Table





The
following table sets forth all compensation provided to the directors for the
year ended April 30, 2009.





The
Company does not have a share-based award plan for the directors other than the
stock option plan referred to above, details of which are provided below under
Outstanding Option-Based
Awards, Share- Based Awards and Non-equity Incentive Plan Compensation.The Company also does not have a pension plan or a non-equity incentive
plan for its directors.









Other
than John Robertson, as described above in the Narrative Descriptionand
reported in the table below, no directors, who were not NEO’s of the Company
were compensated during the financial year ended April 30, 2009 for services in
their capacity as directors.




Non-equity
      incentive plan compensation
                  ($)Name
      and Principal Position
                Year
      Ended
                  April
      30
                Salary
                  ($)
                Share-
      based Awards
                  ($)
                Option-
      Based Awards
                  ($)
      (6)
                Annual
      incentive plans
                  ($)
                Long-term
      incen-tive plans
                Pension
      value
                  ($)
                All
      other
                  Compen-sation
                  ($)
                Total
                  compensation
                  ($)John
      G. Robertson, CEO(1)(2)
                2009
                  2008
                  2007
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  NilJames
      Vandeberg, CFO(3)
                2009
                  2008
                  2007
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  NilJennifer
      Lorette (4)
                2009
                  2008
                  2007
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil
                Nil
                  Nil
                  Nil




(1)
            Mr.
      Robertson is also an NEO and indirectly receives or accrues compensation
      in that capacity. See “Executive Compensation – Narrative
      Discussion”.


(2)
            Mr.
      Robertson did not receive option-based awards in his capacity as a
      director.


(3)
            Mr.
      Vandeberg does not receive any compensation in his capacity as a director,
      nor any option-based awards in his capacity as a
  director.


(4)
            Ms.
      Lorette not receive option-based awards in her capacity as a
      director.


(5)
            The
      valuation of the fair value of the options at the time of the grant is
      based on the Black Scholes model and includes the following assumptions;
      weighted average risk free rate, weighted average expected life, expected
      volatility and dividend yield.





Narrative
Description





There was
no other cash compensation paid to directors by the Company for services
rendered in their capacities as directors for the year ended April 30,
2009.





A
management fee was payable, but accrued to Access Information Services, Inc., a
company controlled by the Robertson Family Trust, of which Mr. Robertson is a
trustee.  Ms Lorette’s option-based awards granted during 2009
consisted of 150,000 stock options which were previously granted on May 10,
2002.  These options were due to expire on May 10, 2009 and were
extended until May 10, 2012 at an exercise price of CDN$0.20 and fair value of
CDN$0.0788 per share.  Other than as herein set forth, the Company did
not pay any compensation to its directors or Named Executive
Officers.





Directors
of the Company who are also NEOs are not compensated for their services in their
capacity as directors, although directors of the Company are reimbursed for
their expenses incurred in connection with their services as
directors.





Information
with respect to grants of options to the directors is reported below under the
Narrative Descriptionin the section below entitled Outstanding Option-Based Awards,
Share-Based Awards and Non-equity Incentive Plan
Compensation.





Other
than as described above, no directors of the Company were compensated by the
Company during the financial year ended April 30, 2009 for services as
consultants or experts.













Option-Based
Awards, Share-Based Awards and Non-equity Incentive Plan Compensation for
Directors





As
disclosed under the Director
Compensation Table,the Company does not have a share-based award plan, a
pension plan or a non-equity incentive plan for its directors.





Option-based
awards to the directors are granted pursuant to the terms of the Company’s stock
option plan.  The options are always granted at market
price.  The valuation of the fair value of the options at the time of
the grant is based on the Black Scholes model and includes the following
assumptions; weighted average risk free rate, weighted average expected life,
expected volatility and dividend yield.





Directors
generally receive a grant of stock options upon their appointment.





During
the most recently completed year, no stock options were granted to any
directors.







Non-Cash
Compensation







No stock
options were granted by the Company during the financial year ended April 30,
2009 to the directors who are not a Named Executive Officer of the
Company.





There
were no exercises of stock options during the financial year ended April 30,
2009 by the directors who are not the Named Executive Officer, and the financial
year end value of unexercised options.  There were 225,000 unexercised
options at the financial year end held by one director who is not a Named
Executive Officer, 125,000 of which were in-the-money.





Incentive
Plan Awards Tables





175,000
stock options, which were held by the non-executive directors, vested during the
2009 year.








Related
Parties





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.  There is no termination
      or change of control provision.




(b)
            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, 2009, fees in the aggregate of $21,333 (2008 - $62,459) for legal
      services have been paid to the Law
Firm.




During
the year ended April 30, 2009:















(a)
              the
      value of consulting services of $90,000 (2008 - $90,000) was contributed
      by the President, CEO and Director of the Company, charged to operations
      and treated as donated capital.
  (b)
              the
      value of consulting services of $30,000 (2008 - $30,000) was contributed
      by the Vice President and Director of the Company, charged to operations
      and treated as donated capital.
  (c)
              the
      value of consulting services of $30,000 (2008 - $30,000) was contributed
      by the CFO, COO and Director of the Company, charged to operations and
      treated as donated capital.
  (d)
              project
      management fees of $30,000 (2008 - $30,000) were paid to a company having
      common officers and
directors.





ITEM11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





The
following table sets forth, as of August 7, 2009, 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 OwnedJohn
      G. Robertson, Chairman of the Board of Directors, President, Chief
      Executive Officer and Director (1) (2) (3)(5)(10)(11)
                
                
                10,858,806
                
                
                
                38.82%James
      McCann (4)
                
                
                1,312,408
                
                
                
                4.69%Rand
      Energy Group Inc. (5)
                
                
                1,312,408
                
                
                
                4.69%Jennifer
      Lorette, Vice President and Director (6)
                
                
                255,400
                
                
                
                *James
      Vandeberg, Chief Operating Officer and Director (7)
                
                
                175,000
                
                
                
                *Lynn
      Petersen (8)
                
                
                105,000
                
                
                
                *Robert
      Grisar, Vice President (9) – subsequent to year end
                
                
                227,000
                
                
                
                *Brian
      Cherry, Vice President of the RadMax® EngineTechnology
      Projects
                
                Nil
                
                
                
                *Reg
      Technologies Inc.(10)
                
                
                3,320,000
                
                
                
                11.87%Rainbow
      Networks Inc.(11)
                
                
                2,429,800
                
                
                
                8.69%ALL
      EXECUTIVE OFFICERS & DIRECTORS AS A GROUP (FOUR
                  INDIVIDUALS)
                
                
                11,486,209
                
                
                
                41.06%


*Less
than one percent of the issued and outstanding on August 7, 2009, which was
28,036,824





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





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





(2)
Includes 1,312,408 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 1,312,408 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 1,312,408
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
1,312,408 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 options.  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.  Ms. Petersen's address is the same as the
Company's.





(9)
Includes 185,000 options.  Mr. Grisar's address is the same as the
Company's.





(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 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 2,429,800 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.








ITEM12.  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 RadMax®
Engine, including all pending and future patent applications in respect of the
Technology for all countries except the United States of America, together with
any improvements, changes or other variations to the Technology; (b) sell,
transfer and assign to us (then called Sky Technologies Inc.), all his right,
title and interest in and to the Technology, including all pending and future
patent applications in respect of the Technology for the United States of
America, together with any improvements, changes or other variations to the
Technology.





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





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










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





Rand
Energy Group Inc., a privately held British Columbia corporation which, 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 the Company is the president and sole director of RadMax
Technologies, Inc.  The headquarters for the corporation is located at
601 Union Street, Suite 4500, Seattle, WA 98101.






The
world-wide marketing and intellectual rights, other than in the U.S., are held
by Reg Technologies, Inc. which owns 12% of the Company’s issued, and
outstanding, stock, and has related directors and officers.







ITEM13.                      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
            (7)23.1
            Consent of Independent Auditors (Malone &
      Bailey PC)
            (9)23.2
            Consent of Independent Auditors (Smythe Ratcliffe
      LLP)
            (9)31.1
            Certification of Chief Executive Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002
            (9)31.2
            Certification of Chief Financial Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002
            (9)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
            (9)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
            (9)
















(1)
            Incorporated
      by reference from Form 10-SB Registration Statement filed April 26,
      1994.


(2)
            Incorporated
      by reference from 10-Q Report for the quarter ended
    7-30-94.


(3)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2000.


(4)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2001


(5)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2002


(6)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2003


(7)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2007


(8)
            Incorporated
      by reference from our 10-KSB for the fiscal year ended April 30,
      2008


(9)
            Incorporated
      herein





Report of
Independent Registered Public Accounting Firm (Malone & Bailey PC, Certified
Public Accountants)


Consolidated
Balance Sheets


Consolidated
Statements of Operations


Consolidated
Statement of Stockholders' Equity (Deficit)


Consolidated
Statements of Cash Flows


Notes to
Consolidated Financial Statements








ITEM14.                      PRINCIPAL
ACCOUNTANT FEES AND SERVICES.





The
following table discloses accounting fees and services which we paid to our
auditor, Malone & Bailey PC, Certified Public Accountants, and to our former
auditors, James Stafford, Inc., Chartered Accountants, and Smythe Ratcliffe LLP
during 2009 and 2008:





Type
      of Services Rendered
              
              2009
                Fiscal
      Year
              
              
              2008
                Fiscal
      Year(a)
       Audit Fees
              
              $
              12,000
              
              
              $
              40,443(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
30 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, on September 25, 2008, our board of
directors terminated Smythe Ratcliffe LLP, Chartered Accountants as our
principal accountant, who audited our consolidated financial statements for the
fiscal year ended April 30, 2008, and appointed James Stafford, Inc., Chartered
Accountants as the Company’s new principal accountant.  On July 8,
2009, James Stafford, Inc., Chartered Accountants, resigned as the Company’s
principal accountants.  Upon recommendation of our Audit Committee, on
July 15, 2009, our board of directors appointed Malone & Bailey PC,
Certified Public Accountants, as the Company’s new independent principal
accountant (see the Company’s Form 8-K dated October 1, 2008, 8-K/A dated
October 6, 2008, 8-K/A dated October 20, 2008, Form 8-K dated July 14, 2009 and
the 8-K dated July 17, 2009, filed on EDGAR).






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.




Audit
Fees


The
aggregate fees billed by Smythe Ratcliffe LLP, Chartered Accountants, James
Stafford, Inc., Chartered Accountants, and Malone & Bailey PC, Certified
Public Accountants for professional services rendered for the audit of our
annual financial statements and review of financial statements included in our
Form 10-Qs or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for the fiscal
years ended April 30, 2009 and 2008 were $12,000 and $40,443,
respectively.





Audit
Related Fees


The
aggregate fees billed by Smythe Ratcliffe LLP, Chartered Accountants, James
Stafford, Inc., Chartered Accountants, and Malone & Bailey PC, Certified
Public Accountants for professional services rendered for assurance and related
services, as applicable, relating to the performance of












the audit
of our consolidated financial statements for the fiscal years ended April 30
2009 and 2008, which are not reported under the heading "Audit Fees" above, were
$Nil and $Nil, respectively.





Tax
Fees


The
aggregate fees billed by Smythe Ratcliffe LLP, Chartered Accountants, James
Stafford, Inc., Chartered Accountants, and Malone & Bailey PC, Certified
Public Accountants for tax compliance, tax advice and tax planning rendered for
the fiscal years ended April 30 2009 and 2008, 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, James Stafford, Inc., Chartered
Accountants, and Malone & Bailey PC, Certified Public Accountants, as
applicable, for products and services other than the services set out above,
were $Nil and $Nil, respectively.












SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report or amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.





REGI
U.S., INC.








By: /s/ John G.
Robertson


John G.
Robertson, President


Chief
Executive Officer and Director








Dated:
August 17, 2009





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
              (John
      G. Robertson)
            Chairman
      of the Board, President, Chief Executive Officer and
    Director
            August
      17, 2009/s/
      James Vandeberg
              (James
      Vandeberg)
            Chief
      Operating Officer, Chief Financial Officer and Director
            August
      17, 2009/s/
      Jennifer Lorette
              (Jennifer
      Lorette)
            Vice
      President, Secretary and Director
            August
      17, 2009















































REGI
U.S., Inc.


(A
Development Stage Company)


Consolidated
Financial Statements








Reports
      of Independent Registered Public Accounting Firms
              42Consolidated
      Balance Sheets
              44Consolidated
      Statements of Operations
              45Consolidated
      Statements of Cash Flows
              46Consolidated
      Statements of Stockholders’ Equity (Deficit)
              47Notes
      to the Consolidated Financial Statements
              50












































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 (deficit) 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 (deficit) and cash flows from July 27, 1992 (date of
inception) to April 30, 2005 were audited by other auditors whose report dated
August 9, 2005 expressed an unqualified opinion, with an explanatory paragraph
discussing the Company’s ability to continue as a going-concern. Our opinion on
the statements of operations, stockholders’ equity (deficit) 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












REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors of REGI U.S., Inc.





We have
audited the accompanying consolidated balance sheet of REGI U.S., Inc., (A
Development Stage Company) as of April 30, 2009 and the related consolidated
statements of operations, changes in stockholders’ equity (deficit) and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. The
statements of operations, stockholders’ equity (deficit) and cash flows from
July 27, 1992 (date of inception) to April 30, 2005 were audited by other
auditors whose report dated August 9, 2005 expressed an unqualified opinion,
with an explanatory paragraph discussing the Company’s ability to continue as a
going-concern. In addition, the statements of operations, stockholders’ equity
(deficit) and cash flows from inception to April 30, 2008 were audited by other
auditors whose report dated July 18, 2008 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
(deficit) and cash flows from inception to April 30, 2009, insofar as it relates
to amounts for prior periods through April 30, 2008, is solely based on the
reports of other auditors.





We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatements. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of the Company as
of April 30, 2009 and the consolidated results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has negative working capital and
suffered recurring losses from operations, which raises substantial doubt about
its ability to continue as a going concern. Management’s plans regarding those
matters are described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.





MALONE
& BAILEY, PC


www.malone-bailey.com


Houston,
Texas





August
17, 2009









REGI
U.S., Inc.


(A
Development Stage Company)


Consolidated
Balance Sheets


April
      30,2009
                
                
                2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                
                $
                -
                
                
                $
                7,645Due
      from related parties
                
                
                260,136
                
                
                
                394,963Prepaid
      expenses
                
                
                4,500
                
                
                
                872Total
      Assets
                
                $
                264,636
                
                
                $
                403,480LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      Liabilities:Bank
      indebtedness
                
                $
                1,789
                
                
                $
                2,347Accounts
      payable and accrued liabilities
                
                
                154,318
                
                
                
                124,592Due
      to related parties
                
                
                863,194
                
                
                
                546,397Total
      Current Liabilities
                
                
                1,019,301
                
                
                
                673,336Stockholders’
      Deficit:Common
      stock, 100,000,000 shares authorized, no par value,27,997,824
      and 27,926,824 shares issued and outstanding,respectively
                
                
                10,668,488
                
                
                
                10,158,831Deficit
      accumulated during the development stage
                
                
                (11,423,153
                )
                
                
                (10,428,687
                )Total
      Stockholders’ Deficit
                
                
                (754,665
                )
                
                
                (269,856
                )Total
      Liabilities and Stockholders’ Deficit
                
                $
                264,636
                
                
                $
                403,480The
      accompanying notes are an integral part of these consolidated financial
      statements.

















REGI
U.S., Inc.


(A
Development Stage Company)


Consolidated
Statements of Operations


July
      27, 1992Years
      Ended
                
                
                (Inception)April
      30,
                
                
                Through2009
                
                
                2008
                
                
                April
      30, 2009Operating
      Expenses:Amortization
                
                $
                -
                
                
                $
                -
                
                
                $
                130,533General
      and administrative
                
                
                846,979
                
                
                
                1,101,636
                
                
                
                7,172,715Impairment
      loss
                
                
                -
                
                
                
                -
                
                
                
                72,823Gain
      on settlement of accounts payable
                
                
                (10,700
                )
                
                
                -
                
                
                
                (200,351
                )Research
      and development
                
                
                158,187
                
                
                
                134,947
                
                
                
                4,247,433Net
      Loss
                
                $
                (994,466
                )
                
                $
                (1,236,583
                )
                
                $
                (11,423,153
                )Net
      loss per share – basic and diluted
                
                $
                (0.04
                )
                
                $
                (0.04
                )Weighted
      average shares outstanding – basic and diluted
                
                
                27,954,000
                
                
                
                27,576,000The
      accompanying notes are an integral part of these consolidated financial
      statements.


























REGI
U.S., Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows










July
      27, 1992Years
      Ended
                
                
                (Inception)March
      30,
                
                
                Through2009
                
                
                2008
                
                
                April
      30, 2009Cash
      flows from operating activities:Net
      Loss
                
                $
                (994,466
                )
                
                $
                (1,236,583
                )
                
                $
                (11,423,153
                )Adjustments
      to reconcile loss to net cashused
      by operating activities:Amortization
                
                
                -
                
                
                
                -
                
                
                
                130,533Donated
      services
                
                
                150,000
                
                
                
                150,000
                
                
                
                1,147,500Impairment
      loss
                
                
                -
                
                
                
                -
                
                
                
                72,823Shares
      issued for services
                
                
                67,800
                
                
                
                35,900
                
                
                
                151,200Stock-based
      compensation
                
                
                291,857
                
                
                
                241,528
                
                
                
                1,057,235Amortization
      of deferred compensation
                
                
                -
                
                
                
                -
                
                
                
                373,795Gain
      on settlement of accounts payable
                
                
                (10,700
                )
                
                
                -
                
                
                
                (200,351
                )Write-off
      of intellectual property
                
                
                -
                
                
                
                -
                
                
                
                578,509Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                -
                
                
                
                -
                
                
                
                (3,000
                )Prepaid
      expenses
                
                
                (3,628
                )
                
                
                28,276
                
                
                
                (4,500
                )Accounts
      payable and accrued liabilities
                
                
                40,426
                
                
                
                59,143
                
                
                
                362,825Net
      cash used in operating activities
                
                
                (458,711
                )
                
                
                (721,736
                )
                
                
                (7,756,584
                )Cash
      flows from investing activities:Patent
      protection costs
                
                
                -
                
                
                
                -
                
                
                
                (38,197
                )Purchase
      of equipment
                
                
                -
                
                
                
                -
                
                
                
                (198,419
                )Net
      cash used in investing activities
                
                
                -
                
                
                
                -
                
                
                
                (236,616
                )Cash
      flows from financing activitiesAdvances
      from (repayments to) related parties
                
                
                451,624
                
                
                
                (73,419
                )
                
                
                914,305Bank
      indebtedness
                
                
                (558
                )
                
                
                2,347
                
                
                
                1,789Proceeds
      from convertible debentures
                
                
                -
                
                
                
                -
                
                
                
                5,000Proceeds
      from the sale of common stock
                
                
                -
                
                
                
                636,544
                
                
                
                7,072,106Net
      cash provided by financing activities
                
                
                451,066
                
                
                
                565,472
                
                
                
                7,993,200Net
      decrease in cash and cash equivalents
                
                
                (7,645
                )
                
                
                (156,264
                )
                
                
                -Cash
      and cash equivalents, beginning of period
                
                
                7,645
                
                
                
                163,909
                
                
                
                -Cash
      and cash equivalents, end of period
                
                $
                -
                
                
                $
                7,645
                
                
                $
                -Supplemental
      Disclosures:Interest
      paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
      tax paid
                
                
                -
                
                
                
                -
                
                
                
                -Non-Cash
      Investing and Financing Activities:Warrants
      issued for equity line of credit
                
                $
                -
                
                
                $
                -
                
                
                $
                1,561,406Shares
      issued to settle debt
                
                
                -
                
                
                
                -
                
                
                
                496,000Shares
      issued for convertible debenture
                
                
                -
                
                
                
                -
                
                
                
                5,000Shares
      issued for intellectual property
                
                
                -
                
                
                
                -
                
                
                
                345,251Affiliate’s
      shares issued for intellectual property
                
                
                -
                
                
                
                -
                
                
                
                200,000The
      accompanying notes are an integral part of these consolidated financial
      statements.


















REGI
U.S., Inc.
 (A
Development Stage Company)
 Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)
  
 
 
 DeficitAccumulated
                  
                  
                  TotalCommon
                  
                  
                  
                  
                  
                  During
      the
                  
                  
                  Stockholders’Common
      Stock
                  
                  
                  Stock
                  
                  
                  Deferred
                  
                  
                  Development
                  
                  
                  EquityShares
                  
                  
                  Amount
                  
                  
                  Subscribed
                  
                  
                  Compensation
                  
                  
                  Stage
                  
                  
                  (Deficit)Balances
      – July 27, 1992 (Inception)
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Stock
      issued for intellectual property
                  
                  
                  5,700,000
                  
                  
                  
                  57,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  57,000Stock
      issued for cash
                  
                  
                  300,000
                  
                  
                  
                  3,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (23,492
                  )
                  
                  
                  (23,492
                  )Balances
      – April 30, 1993
                  
                  
                  6,000,000
                  
                  
                  
                  60,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (23,492
                  )
                  
                  
                  36,508Stock
      issued for cash pursuant to apublic
      offering
                  
                  
                  500,000
                  
                  
                  
                  500,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  500,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (394,263
                  )
                  
                  
                  (394,263
                  )Balances
      – 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
                  )Balances
      – 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
                  )Balances
      – 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
                  )Balances
      – 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 ofAVFS
      rights
                  
                  
                  400,000
                  
                  
                  
                  288,251
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  288,251Stock
      issued for services
                  
                  
                  125,000
                  
                  
                  
                  170,250
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  170,250Stock
      issued to settle an accruedliability
                  
                  
                  50,000
                  
                  
                  
                  25,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  25,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (580,901
                  )
                  
                  
                  (580,901
                  )Balances
      – April 30, 1998
                  
                  
                  9,248,300
                  
                  
                  
                  3,830,401
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,531,488
                  )
                  
                  
                  298,913Stock
      issued for services
                  
                  
                  100,000
                  
                  
                  
                  71,046
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  71,046Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (397,924
                  )
                  
                  
                  (397,924
                  )Balances
      – 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
                  )Balances
      – April 30, 2000
                  
                  
                  10,217,735
                  
                  
                  
                  4,525,666
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,342,907
                  )
                  
                  
                  182,759Stock
      issued for cash pursuant towarrants
      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
                  )Balances
      – April 30, 2001
                  
                  
                  10,221,735
                  
                  
                  
                  4,546,166
                  
                  
                  
                  72,000
                  
                  
                  
                  -
                  
                  
                  
                  (5,151,588
                  )
                  
                  
                  (533,422
                  )Stock
      issued for cash pursuant to aprivate
      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
                  )Balances
      – April 30, 2002
                  
                  
                  11,287,935
                  
                  
                  
                  4,812,799
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (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 convertibledebenture
                  
                  
                  50,000
                  
                  
                  
                  5,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,000Stock
      to be issued
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  25,968
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  25,968Donated
      consulting services
                  
                  
                  -
                  
                  
                  
                  187,500
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  187,500Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (220,972
                  )
                  
                  
                  (220,972
                  )Balances
      – April 30, 2003
                  
                  
                  17,687,935
                  
                  
                  
                  5,326,799
                  
                  
                  
                  25,968
                  
                  
                  
                  -
                  
                  
                  
                  (5,528,650
                  )
                  
                  
                  (175,883
                  )Donated
      consulting services
                  
                  
                  -
                  
                  
                  
                  210,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  210,000Stock
      issued for cash pursuant to aprivate
      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
                  )Balances
      – April 30, 2004
                  
                  
                  22,231,055
                  
                  
                  
                  6,004,951
                  
                  
                  
                  -
                  
                  
                  
                  (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
                  )Balances
      – April 30, 2005
                  
                  
                  23,720,725
                  
                  
                  
                  6,524,829
                  
                  
                  
                  -
                  
                  
                  
                  (13,000
                  )
                  
                  
                  (6,723,452
                  )
                  
                  
                  (211,623
                  )Re-class
      deferred compensation tocommon
      stock
                  
                  
                  -
                  
                  
                  
                  (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
                  )Balances
      – April 30, 2006
                  
                  
                  25,839,125
                  
                  
                  
                  7,875,263
                  
                  
                  
                  3,750
                  
                  
                  
                  -
                  
                  
                  
                  (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
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  60,000Stock-based
      compensation
                  
                  
                  -
                  
                  
                  
                  260,569
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  260,569Deferred
      compensation
                  
                  
                  -
                  
                  
                  
                  1,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,000Donated
      consulting services
                  
                  
                  -
                  
                  
                  
                  150,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  150,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,413,294
                  )
                  
                  
                  (1,413,294
                  )Balances
      – April 30, 2007
                  
                  
                  26,919,208
                  
                  
                  
                  8,824,932
                  
                  
                  
                  259,027
                  
                  
                  
                  -
                  
                  
                  
                  (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
                  )Balances
      – April 30, 2008
                  
                  
                  27,926,824
                  
                  
                  
                  10,158,831
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (10,428,687
                  )
                  
                  
                  (269,856
                  )Options
      exercised for services
                  
                  
                  71,000
                  
                  
                  
                  67,800
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  67,800Stock-based
      compensation
                  
                  
                  -
                  
                  
                  
                  291,857
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  291,857Donated
      consulting services
                  
                  
                  -
                  
                  
                  
                  150,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  150,000Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (994,466
                  )
                  
                  
                  (994,466
                  )Balances
      – April 30, 2009
                  
                  
                  27,997,824
                  
                  
                  $
                  10,668,488
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  (11,423,153
                  )
                  
                  $
                  (754,665
                  )The
      accompanying notes are an integral part of these consolidated financial
      statements.












REGI
U.S., Inc.


(A
Development Stage Company)


Notes
to Consolidated Financial Statements





NOTE
1.                                   ORGANIZATION
AND BASIS OF PRESENTATION





Nature
of Business





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





The
Company is a development stage enterprise, as defined in Statements of Financial
Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by
Development Stage Enterprises”.  The Company is engaged in the
business of developing and commercially exploiting an improved axial vane type
rotary engine known as the Rand Cam/Direct Charge Engine (the “RC/DC Engine”) in
the U.S. The worldwide marketing and intellectual rights, other than in the
U.S., are held by Reg Technologies, Inc. (“Reg”), a major shareholder, which
owns 12% of the Company’s issued, and outstanding, stock and formerly 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%.  No revenue has
been derived during the organization period and the Company’s planned principle
operations have not commenced.





The
Company formed a wholly-owned subsidiary, Rad Max Technologies, Inc. (“Rad Max”)
on April 10, 2007 in the State of Washington.




Significant
Accounting Policies





The
following is a summary of significant accounting policies used in the
preparation of these consolidated financial statements.





Principles
of consolidation





These
consolidated financial statements include the accounts of the Company, and its
wholly owned subsidiary, Rad Max, since its date of incorporation on April 10,
2007. All inter-company balances and transactions have been eliminated on
consolidation.





Fiscal
period





The
Company’s fiscal year ends on April 30.





Reclassifications




50







Certain
prior period amounts have been reclassified to conform to the current period
presentation.





Risks
and uncertainties





The
Company operates in an emerging industry that is subject to market acceptance
and technological change. The Company’s operations are subject to significant
risks and uncertainties, including financial, operational, technological and
other risks associated with operating an emerging business, including the
potential risk of business failure.





Cash
and cash equivalents





Cash and
cash equivalents include highly liquid investments with original maturities of
three months or less.





Financial
instruments





Fair
Value





The
carrying values of cash and cash equivalents, amounts due to related parties,
bank indebtedness, accounts payable and accrued liabilities approximate their
fair values because of the short-term maturity of these financial
instruments.





Interest
Rate Risk





The
Company is not exposed to significant interest rate risk due to the short-term
maturity of its monetary assets and liabilities.





Credit
Risk





The
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.





Currency
Risk





The
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 consolidated financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.





Income
taxes





Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with SFAS No. 109, “Accounting for Income Taxes”,
which requires the use of the asset/liability method of accounting for income
taxes. Deferred income taxes and tax benefits are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their









respective
tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The Company provides for deferred taxes for the estimated
future tax effects attributable to temporary differences and carry-forwards when
realization is more likely than not.





Basic
and diluted net loss per share





The
Company computes net 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 shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti-dilutive.





Stock-based
compensation





Effective
January 1, 2006, the Company adopted the provisions of SFAS No. 123 (R),
“Share-Based Payment (as amended),” which establishes the accounting treatment
for transactions in which an entity exchanges its equity instruments for goods
or services. Under the provisions of SFAS No. 123 (R), share-based payment
compensation is measured at the grant date, based on the fair value of the
award, and is recognized as an expense over the requisite service period
(generally the vesting period).The Company accounts for share-based payments to
non-employees in accordance with guidance provided by Emerging Issues Task Force
Issue No. 96-18, “Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services.”





Research
and development





Research
and development costs are expensed as incurred.





Use
of estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from these
estimates.  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.





Recent
accounting pronouncements





In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”
(“SFAS 167”).  SFAS No. 167 is intended to establish general standards
of financial reporting for companies with variable interest
entities.  It requires timely and useful disclosure of information
related to the Company’s involvement with variable interest
entities.  This disclosure should alert all users to the effects on
specific provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest
Entities, related to the changes to the special-purpose entity proposal
in FASB Statement No. 166, Accounting for Transfers of
Financial Assets, and the treatment of specific provisions of
Interpretation 46(R).  SFAS No. 167 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2009.  The Company has determined that the adoption of SFAS No.
167 will have no impact will have on its consolidated financial
statements.





In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets—an amendment of FASB Statement” (“SFAS
166”).  SFAS No. 166 is intended to establish standards of financial
reporting for the transfer of assets and transferred assets to improve the
relevance, representational faithfulness, and comparability.  SFAS 166 was
established to clarify derecognition of assets under FASB Statement No. 140,
Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities.SFAS No. 166 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2009.  The Company has determined that the adoption of SFAS No.
166 will have no impact will have on its consolidated financial
statements.





In May
2009, the FSAB issued SFAS No. 165, Subsequent Events (“SFAS No.
165”). SFAS No. 165 is intended to establish general standards of accounting for
and disclosure of events that occur after the balance sheet date, but before
financial statements are issued or are available to be issued.  It
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date–that is, whether that date
represents the date the financial statements were issued or were available to be
issued. This disclosure should alert all users of financial statements that an
entity has not evaluated subsequent events after that date in the set of
financial statements being presented.  SFAS No. 165 is effective for
financial statements issued for fiscal years and interim periods ending after
June 15, 2009. The Company is evaluating the impact that the adoption of SFAS
No. 165 will have on its consolidated financial statements.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  SFAS No. 162 is intended
to improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing financial
statements that are presented in conformity with U.S. Generally Accepted
Accounting Principles (“GAAP”) for nongovernmental entities.  Prior to
the issuance of SFAS 162, GAAP hierarchy was defined in the American Institute
of Certified Public Accountants (“AICPA”) Statement on Auditing Standards No.
69, “The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles” (“SAS
69”).  SAS 69 has been criticized because it is directed to the
auditor rather than the entity.  SFAS 162 addresses these issues by
establishing that the GAAP hierarchy should be directed to entities because it
is the entity, not its auditor, that is responsible for selecting









accounting
principles for financial statements that are presented in conformity with
GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board Auditing amendments to AU Section
411, “The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting
Principles”.  The Company does not expect SFAS 162 to have a
material effect on its consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51” (“SFAS 160”).  SFAS 160 establishes accounting and
reporting standards for ownership interests in subsidiaries held by parties
other than the parent, the amount of consolidated net income attributable and to
the noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated.  SFAS 160 also establishes disclosure requirements
that clearly identify and distinguish between the interests of the parent and
the interests of the noncontrolling owners.  SFAS 160 is effective for
fiscal years beginning after 15 December 2008.  The adoption of
SFAS 160 is not expected to have a material impact on the Company’s
financial position, results of operations or cash flows.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”
(“SFAS No. 141(R)”). SFAS No. 141(R) establishes principles and requirements for
how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any noncontrolling
interest in the acquiree and the goodwill acquired. SFAS No. 141(R) also
establishes disclosure requirements to enable the evaluation of the nature and
financial effects of the business combination. SFAS No. 141(R) is effective for
fiscal years beginning after 15 December 2008.  The Company is
currently evaluating the potential impact, if any, of the adoption of SFAS No.
141(R) on its consolidated results of operation and financial
condition.





In June
2008, FASB ratified EITF No. 07-05, Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity’s Own Stock (“EITF 07-05”).EITF 07-05 provides that an entity should use a two-step approach to
evaluate whether an equity-linked financial instrument (or embedded feature) is
indexed to its own stock, including evaluating the instrument’s contingent
exercise and settlement provisions. The Company is currently evaluating the
potential impact, if any, of the adoption of EITF No. 07-05 on its consolidated
results of operation and financial condition.





In May
2008, the FASB issued FASB Staff Position APB No. 14-1, “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)” (“APB 14-1”), which applies to convertible
debt that includes a cash conversion feature. Under APB 14-1, the liability and
equity components of convertible debt instruments within the scope of this
pronouncement shall be separately accounted for in a manner that will reflect
the entity’s nonconvertible debt borrowing rate when interest cost is recognized
in subsequent periods. APB 14-1 is effective for fiscal years beginning after
December 15, 2008. We examined our convertible debt instruments and preferred
stock for applicability under this FSP. The Company is currently evaluating the
potential impact, if any, of the adoption of FASB Staff Position No. 14-1 on its
consolidated results of operation and financial condition.





In
September 2006, the FASB issued SFAS 157,Fair Value Measurements
(SFAS 157), which defines fair value, establishes a framework for measuring fair
value, and expands









disclosures
about fair value measurements. This pronouncement applies to other standards
that require or permit fair value measurements. Accordingly, this statement does
not require any new fair value measurement. The provisions of SFAS 157 are
effective for the Company on January 1, 2008. We have partially adopted FAS
157 as of January 1, 2008 except for those non-recurring measurements for
non-financial assets and non-financial liabilities subject to the partial
deferral in FASB Statement of Position No. 157-2,Partial Deferral of the
Effective Date of Statement 157,”  (“FSP
157-2”).  The adoption of FAS 157 did not have an impact on our
consolidated financial position or operating results.   FSP 157-2
delays the effective date of FAS 157 from fiscal years beginning after November
15, 2007 to fiscal years beginning after November 15, 2008 for all nonfinancial
assets and nonfinancial liabilities, except those that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually).





Recent
accounting pronouncements adopted





In May
2008, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts – an interpretation of FASB Statement No.
60” (“SFAS 163”).  SFAS No. 163 provides enhanced guidance on
the recognition and measurement to be used to account for premium revenue and
claim liabilities and related disclosures and is limited to financial guarantee
insurance (and reinsurance) contracts, issued by enterprises included within the
scope of FASB Statement No. 60, Accounting and Reporting by Insurance
Enterprises.  SFAS 163 also requires that an insurance enterprise
recognize a claim liability prior to an event of default when there is evidence
that credit deterioration has occurred in an insured financial
obligation.  SFAS 163 is effective for financial statements issued for
fiscal years and interim periods beginning after 15 December 2008, with early
application not permitted.  The Company adopted SFAS 163 on February
1, 2009 and has determined that SFAS 163 did not have an impact on its
consolidated financial statements.





In March
2008, the FASB issued SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No.
133”, which amends and expands the disclosure requirements of SFAS 133 to
provide an enhanced understanding of an entity’s use of derivative instruments,
how they are accounted for under SFAS 133 and their effect on the entity’s
financial position, financial performance and cash flows.  The
provisions of SFAS 161 are effective for periods beginning after 15 November
2008.  The Company adopted SFAS 163 on February 1, 2009 has determined
that SFAS 161 did not have an impact on its consolidated financial
statements.





NOTE
2.                                   GOING
CONCERN





The
Company has a net loss of $994,466 during the year ended April 30, 2009 and has
working capital deficit of $754,665 and an accumulated deficit of $11,423,153 at
April 30, 2009. These factors raise substantial doubt about the ability of the
Company to continue as a going concern.  The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. As a result, the Company’s consolidated financial statements
as of April 30, 2009 and for the year ended have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business.





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. 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. There is no assurance that any of these activities will be
successful.





NOTE
3.                                   RELATED
PARTIES





Amounts
due to and from 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. As of April 30, 2009, there was
$260,136 due from related parties and $863,194 due to related parties. As of
April 30, 2008, there was $394,963 due from related parties and $546,397 due to
related parties. There is no right of offset associated with these payables and
receivables.





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 year ended April 30, 2009 and
2008, fees in the aggregate of $21,333 and $62,459, respectively, for legal
services have been paid or accrued to the Law Firm.





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.








During
year ended April 30, 2009, the President, CEO and director of the Company
provided consulting services to the Company. These services were valued at
$90,000, which was accounted for as donated capital and charged to expense
during the period. A similar amount was recorded in the year ended April 30,
2008.





During
year ended April 30, 2009, the Vice President and director of the Company
provided consulting services to the Company. These services were valued at
$30,000, which was accounted for as donated capital and charged to expense
during the period. A similar amount was recorded in the year ended April 30,
2008.





During
year ended April 30, 2009, the CFO, COO and director of the Company provided
consulting services to the Company. These services were valued at $30,000, which
was accounted for as donated capital and charged to expense during the period. A
similar amount was recorded in the year ended April 30, 2008.





During
year ended April 30, 2009 and 2008, project management fees of $30,000 were paid
to a company having common officers and directors.





NOTE
4.                                   STOCKHOLDERS’
EQUITY





a)      Common
Stock Options and Warrants









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
(the “2000 Plan”).





The
Company records stock-based compensation in accordance with SFAS No. 123(R),
“Share-Based Payment”,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.





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 (the “2007 Plan”).
Pursuant to the 2007 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.





During
the year ended April 30, 2009 and 2008, the Company recorded stock-based
compensation of $291,857 and $241,528, respectively.  At April 30,
2009, the Company had $713,538 and $1,044,431, respectively, of total
unrecognized compensation cost related to non-vested stock options and warrants,
which will be recognized over future periods.














The fair
value of each option and warrant granted was determined using the Black-Scholes
option pricing model and the following assumptions:





April
      30,2009
                
                
                2008Risk
      free interest rate
                
                
                1.26%
      - 2.12%
                
                
                
                3.49%Expected
      life
                
                3.0
      – 5.0 years
                
                
                2.5
      yearsAnnualized
      volatility
                
                
                88%
      - 113%
                
                
                
                110%Expected
      dividends
                
                
                -
                
                
                
                -





Option
pricing models require the input of highly subjective assumptions including the
expected price volatility.  The subjective input assumptions can
materially affect the fair value estimate.




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.  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.




On
October 1, 2008, the Company granted 100,000 common stock warrants from the 2000
Stock Option Plan to a consultant exercisable at $0.60 per share, up to October
1, 2011.  The fair value of warrants 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 2.12%, expected volatility of
110%, an expected option life of 3 years and no expected dividends.





On
January 13, 2009, the Company granted 100,000 common stock warrants from the
2000 Stock Option Plan to a consultant exercisable at $0.50 per share, up to
January 13, 2013.  The fair value of warrants 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 1.26%, expected
volatility of 88%, an expected option life of 4 years and no expected
dividends.





On April
22, 2009, the Company extended the term on 75,000 options for an additional
three years.  The incremental fair value of the modification of the
stock options was estimated to be $5,912.  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 1.36%, expected volatility of 66%, an
expected option life of 3.1 years and no expected dividends.









On April
23, 2009, the Company granted 50,000 common stock warrants from the 2000 Stock
Option Plan to a consultant exercisable at $0.25 per share, up to April 23,
2014.  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 1.89%, expected volatility of
113%, an expected option life of 5 years and no expected dividends.





A summary
of the Company’s stock option activity for the years ended April 30, 2008 and
2009 is as follows:




April
      30, 2009
                
                
                April
      30, 2008Weighted
                
                
                
                
                
                WeightedAverage
                
                
                
                
                
                AverageExercise
                
                
                
                
                
                ExerciseOptions
                
                
                Price
                
                
                Options
                
                
                PriceOutstanding
      at beginning of period
                
                
                1,439,000
                
                
                $
                1.05
                
                
                
                1,488,500
                
                
                $
                1.04Granted
                
                
                -
                
                
                
                -
                
                
                
                25,000
                
                
                
                1.30Exercised
                
                
                (36,000
                )
                
                
                1.30
                
                
                
                (74,500
                )
                
                
                0.79Expired
                
                
                (250,000
                )
                
                
                0.29
                
                
                
                -
                
                
                
                -Cancelled
                
                
                (25,000
                )
                
                
                2.09
                
                
                
                -
                
                
                
                -Outstanding
      at end of period
                
                
                1,128,000
                
                
                $
                1.19
                
                
                
                1,439,000
                
                
                $
                1.05Exercisable
      at end of period
                
                
                587,500
                
                
                $
                1.28
                
                
                
                306,250
                
                
                $
                1.22Weighted
      average fair value of options granted
                
                
                
                
                
                $
                -
                
                
                
                
                
                
                $
                0.62





At April
30, 2009, the range of exercise prices and the weighted average remaining
contractual life of the outstanding options was $0.20 to $2.09 per share and
2.88 years, respectively. The intrinsic value of “in the money” options at April
30, 2009 was $6,000.





A summary
of the Company’s common stock warrant activity for the years ended April 30,
2008 and 2009 is as follows:




April
      30, 2009
                
                
                April
      30, 2008Weighted
                
                
                
                
                
                WeightedAverage
                
                
                
                
                
                AverageExercise
                
                
                
                
                
                ExerciseWarrants
                
                
                Price
                
                
                Warrants
                
                
                PriceOutstanding
      at beginning of period
                
                
                3,452,950
                
                
                $
                1.19
                
                
                
                3,133,167
                
                
                $
                1.07Granted
                
                
                250,000
                
                
                
                0.49
                
                
                
                873,950
                
                
                
                1.29Exercised
                
                
                (35,000
                )
                
                
                0.60
                
                
                
                (99,166
                )
                
                
                0.97Expired
                
                
                -
                
                
                
                -
                
                
                
                (455,001
                )
                
                
                1.00Cancelled
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Outstanding
      at end of period
                
                
                3,667,950
                
                
                $
                1.15
                
                
                
                3,452,950
                
                
                $
                1.19Exercisable
      at end of period
                
                
                3,259,200
                
                
                $
                1.15
                
                
                
                3,171,700
                
                
                $
                1.17





At April
30, 2009, the range of exercise prices and the weighted average remaining
contractual life of the outstanding warrants was $0.25 to $2.20 per share and
2.77 years, respectively. The intrinsic value of “in the money” warrants at
April 30, 2009 was $1,500.





b)              Performance
Stock Plan









The
Company has allotted 2,500,000 shares to be issued pursuant to a Performance
Stock Plan approved and registered on June 27, 1997, and amended in June 2004.
On April 27, 2007, the Company further amended the Plan so that the term of the
Plan is extended to the twentieth anniversary of the effective
date.





c)      Non-Cash
Consideration





Shares
issued for non-cash consideration to third parties were valued based on the fair
market value of the services provided.





During
the year ended April 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 to operations
for the pro-rata portion of stock-based compensation related to the services
performed.





During
the year ended April 30, 2009, a consultant exercised 36,000 common stock
warrants 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.





During
the year ended April 30, 2009, a consultant exercised 35,000 common stock
warrants with a fair value of $21,000 for services rendered and was charged to
research and development.





d)   Equity
Line of Credit





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 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 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 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.





e)      Other





During
the 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.





During
the 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.





During
the 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.





During
the 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.





During
the 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.





During
the 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.






61











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.





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








NOTE
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, licenses,
      royalties or income derived from the patented technology.  To
      date no sales have been accrued and no royalties have been accrued or
      paid.





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.  To date no sales have been accrued and no
      royalties have been accrued or
paid.





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 Law 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.





NOTE
6.                                   INCOME
TAXES





We
account for income taxes in accordance with Statement of Financial Standards No.
109, “Accounting for Income Taxes,” which uses the asset and liability method of
accounting for income taxes. Deferred income taxes are recognized for the tax
consequences of “temporary differences” by applying enacted statutory tax rate
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities and result
primarily form differences in methods used to amortize intangible assets. A
valuation allowance is provided when management cannot determine whether it is
more likely than not that the deferred tax asset will be realized. The effect on
deferred income taxes of the change in tax rates is recognized in income in the
period that includes the enactment date.




The
Company has losses carried forward for income tax purposes to April 30, 2009,
however, the related deferred tax asset has been fully reserved due to
management’s determination that the realization of the deferred tax assets is
less than likely. The difference between the statutory tax rate and the
effective tax rate is the valuation allowance.










The
composition of the Company’s deferred tax assets at April 30, 2009 and 2008 is
as follows:





April
      30,2009
                
                
                2008Net
      operating loss carry forward
                
                
                9,073,809
                
                
                
                8,589,000Statutory
      federal income tax rate
                
                
                35%
                
                
                
                35%Effective
      income tax rate
                
                
                0%
                
                
                
                0%Deferred
      tax asset
                
                
                3,175,833
                
                
                
                3,006,200Less:
      Valuation allowance
                
                
                (3,175,833
                )
                
                
                (3,006,200
                )Net
      deferred tax asset
                
                
                -
                
                
                
                -





As of
April 30, 2009, the Company has unused net operating losses for U.S. federal
income tax purposes of approximately $9,073,809 that are available to offset
future taxable income.  This unused net operating loss carry forward
balance for income tax purposes will expire in the years 2024 through
2029.





NOTE
7.                                   SUBSEQUENT
EVENTS





The
following events occurred subsequent to April 30, 2009  The Company
evaluated all events and transactions that occured after April 30, 2009 up
through August 17, 2009, the date the Company issued these financial
statements:





a)
            On
      May 4, 2009, the Company entered into a consulting agreement for a period
      of one month for compensation in the amount of $10,000 in
      cash.





b)
            In
      May through July 2009, the Company issued 9,000 shares at $1.30 per share
      upon the exercise of stock options for consulting services rendered with a
      fair value of $11,700.





c)
            In
      May through July 2009, the Company issued 10,000 shares at $0.60 per share
      upon the exercise of stock options for consulting services rendered with a
      fair value of $9,000.





d)
              On
      June 6, 2009, the Company granted 100,000 stock options exercisable at
      $0.25 per share with an expiration date of January 6, 2010. The options
      vest as follows: 20% vest immediately upon grant, 20% vest 30 days from
      the date of the first exercise, 20% vest 30 days from the date of the
      second exercise, 20% vest 30 days from the date of the third exercise and
      20% vest 30 days from the date of the fourth
  exercise.





e)
            On
      July 31, 2009 the Company issued 20,000 shares at $0.25 per share pursuant
      to a partial exercise of a stock
option