REGI U.S. (RGUS) 10-Q 7 Apr 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2017	Apr. 06, 2017
Document And Entity Information
Entity Registrant Name	REGI U S INC
Entity Central Index Key	922,330
Document Type	10-Q
Document Period End Date	Jan. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		83,926,108
Trading Symbol	RGUS
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jan. 31, 2017	Apr. 30, 2016
Current Assets:
Cash and cash equivalents	$ 17,422	$ 42
Deposits	2,000
Total current assets	19,422	42
Furniture and equipment, net	15,476
Total Assets	34,898	42
Current Liabilities:
Accounts payable and accrued liabilities	219,445	192,752
Due to related parties	1,842,507	1,916,876
Total current liabilities	2,061,952	2,109,628
Long-term liabilities:
Convertible promissory notes	351,041
Convertible promissory notes – related parties	96,152
Total long-term liabilities	447,193
Total liabilities	2,509,145	2,109,628
Stockholders’ Deficit:
Common stock, 150,000,000 shares authorized, no par value, 83,708,686 and 32,779,298 shares issued and outstanding, respectively	11,227,302	10,840,946
Accumulated deficit	(13,701,549)	(12,950,532)
Total Stockholders’ Deficit	(2,474,247)	(2,109,586)
Total Liabilities and Stockholders’ Deficit	$ 34,898	$ 42

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jan. 31, 2017	Apr. 30, 2016
Statement of Financial Position [Abstract]
Common stock, shares authorized	150,000,000	150,000,000
Common stock, no par value
Common stock, shares issued	83,708,686	32,779,298
Common stock, shares outstanding	83,708,686	32,779,298

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Operating Expenses:
General and administrative	$ 269,780	$ 44,550	$ 566,532	$ 178,150
Research and development	100,921	1,110	172,637	47,455
Loss from operations:	(370,701)	(45,660)	(739,169)	(225,605)
Other income (expense):
Gain on settlement of accounts payable			666
Interest expense	(8,754)	(360)	(12,514)	(1,080)
Total other income (expense)	(8,754)	(360)	(11,848)	(1,080)
Net loss	$ (379,455)	$ (46,020)	$ (751,017)	$ (226,685)
Net loss per common share – basic and diluted	$ (0.01)	$ 0	$ (0.02)	$ (0.01)
Weighted average common shares outstanding – basic and diluted	64,300,766	32,779,298	43,286,454	32,779,298

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Cash flows from operating activities:
Net loss	$ (751,017)	$ (226,685)
Adjustments to reconcile net loss to net cash used in operating activities:
Donated services		90,000
Gain on settlement of accounts payable	(666)
Options and warrants issued for services	386,356
Depreciation expense	1,199
Changes in operating assets and liabilities:
Deposit	(2,000)
Due to related parties	5,108	1,080
Accounts payable and accrued liabilities	66,150	3,533
Net cash used in operating activities	(294,870)	(132,072)
Cash flows from financing activities
Advances from related parties		131,669
Issuance of convertible promissory notes	312,250
Net cash provided by financing activities	312,250	131,669
Net change in cash and cash equivalents	17,380	(403)
Cash and cash equivalents, beginning of period	42	491
Cash and cash equivalents, end of period	17,422	88
Supplemental Disclosures:
Interest paid
Income tax paid
Non-cash financing and investing transactions:
Furniture and equipment paid by related parties	16,675
Accounts payable related party converted to convertible notes related party	96,152
Accounts payable converted to convertible notes	$ 38,791

Basis of Presentation and Accou

Basis of Presentation and Accounting Policies	9 Months Ended
	Jan. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Accounting Policies	NOTE 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES The accompanying unaudited interim consolidated financial statements of REGI U.S., Inc. (“REGI”, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the year ended April 30, 2016 filed on Form 10-K with the SEC. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations for the interim period presented herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or for any future period. Notes to the unaudited consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal 2016 as reported in the Form 10-K, have been omitted. Property, plant and equipment Property and equipment are stated at cost, which includes the acquisition price and any direct costs to bring the asset into use at its intended location, less accumulated amortization. Amortization of property and equipment is calculated using the straight-line method to write off the cost, net of any estimated residual value, over their estimated useful lives of the assets as follows: Office equipment 5 years and electronic equipment 2 years. Amortization of office equipment is included in general and administrative expenses; amortization of research equipment is included in research and development expense.

Going Concern

Going Concern	9 Months Ended
	Jan. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Going Concern	NOTE 2. GOING CONCERN REGI incurred net losses of $751,017 for the nine months ended January 31, 2017 and has a working capital deficit of $2,042,530 and an accumulated deficit of $13,701,549 at January 31, 2017. These factors raise substantial doubt about the ability of REGI 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, REGI’s unaudited consolidated financial statements as of January 31, 2017 and for the nine months 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. REGI also receives interim support from affiliated companies and plans to raise additional capital through debt and/or equity financings. There continues to be insufficient funds to provide enough working capital to fund ongoing operations for the next twelve months. REGI 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.

Related Parties

Related Parties	9 Months Ended
	Jan. 31, 2017
Related Party Transactions [Abstract]
Related Parties	NOTE 3. RELATED PARTIES Amounts due from related parties are unsecured, non-interest bearing and due on demand. Related parties consist of the directors and officers and a former director of REGI and companies controlled or significantly influenced by these parties. As of January 31, 2017, there was $1,842,507 due to related parties. As of April 30, 2016, there was $1,916,876 due to related parties. During the nine month period ended January 31, 2017, the CEO paid on behalf of the Company $11,827 for the purchase of the office furniture. During the nine month period ended January 31, 2017, the Chief Engineer who is also a director of the Company paid on behalf of the Company $4,848 for the purchase of the research equipment. During the nine month period ended January 31, 2017, the Company’s CEO and Chief Engineer agreed to convert $96,152 of payables due to them into convertible note promissory notes. The Convertible Notes are secured against all assets of the Company, repayable two years after the issuance, bearing simple interest rate of 10% during the term of the notes and simple interest rate of 20% after the due date, and convertible at any time on or after ninety days from the issuance date into the Company’s common stocks at $0.10 per share. The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature and determined that the instrument does not have a beneficial conversion feature. During the year ended April 30, 2012, the Company issued a promissory note of $24,000 for amounts previously accrued and owed to a company with a common director with the Company. The promissory note bears interest rate of 6% per annum, is unsecured and due on demand. During the nine months ended January 31, 2017 and 2016, there was no change to the principal amount of the promissory note and interest expense of $1,080 was recorded each year. The principal balance of the note is included as due to related parties in the consolidated balance sheets.

Gain on Debt Settlement

Gain on Debt Settlement	9 Months Ended
	Jan. 31, 2017
Debt Disclosure [Abstract]
Gain on Debt Settlement	NOTE 4. GAIN ON DEBT SETTLEMENT During the nine months ended January 31, 2017 the Company recorded gain on debt settlement of $666 with a service provider.

Secured Convertible Promissory

Secured Convertible Promissory Notes	9 Months Ended
	Jan. 31, 2017
Debt Disclosure [Abstract]
Secured Convertible Promissory Notes	NOTE 5. SECURED CONVERTIBLE PROMISSORY NOTES During the nine months ended January 31, 2017, the Company issued senior secured convertible promissory notes (the “Convertible Notes”) for cash proceeds of $312,250. Under the same convertible notes the Company issued convertible notes to settled accounts payable due to unrelated parties for $38,791 and $96,152 to settle accounts payable due to related party. The Convertible Notes are secured against all assets of the Company, repayable two years after the issuance, bearing simple interest rate of 10% during the term of the notes and simple interest rate of 20% after the due date, and convertible at any time on or after ninety days from the issuance date into the Company’s common stocks at $0.10 per share. The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature and determined that the instrument does not have a beneficial conversion feature.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Jan. 31, 2017
Equity [Abstract]
Stockholders' Equity	NOTE 6. STOCKHOLDERS’ EQUITY a) Common Stock On January 6, 2017, the Company’s annual and special meeting of stockholders approved the amendment to the Company’s articles that increased the authorized common shares from 100,000,000 to 150,000,000. On September 16, 2016, the Company entered into an asset purchase agreement with Reg Technologies Inc., a public company whose common stock was listed on TSX Venture Exchange to purchase all of the assets of Reg Technologies, a company with a common director and CEO with REGI. An aggregate of 50,929,388 unregistered common shares of our company were issued by January 31, 2017 as consideration for the asset purchase. The transaction was not closed until February 17, 2017 upon TSX Venture Exchange approval, which was a condition for the closing. b) Common Stock Options and Warrants On August 12, 2016, REGI granted an aggregate of 3,700,000 common stock options for services. These options vest upon grant, expire on July 20, 2021 and are exercisable at the following prices: Options Exercise price 900,000 $ 0.10 600,000 $ 0.20 550,000 $ 0.35 450,000 $ 0.50 350,000 $ 0.75 350,000 $ 1.00 250,000 $ 1.25 250,000 $ 1.50 3,700,000 The fair value of the options was determined to be $216,088 using the Black-Scholes option pricing model, which requires management to make estimates that are subjective and may not be representative of the actual results. Changes in assumptions can materially affect estimates of fair value. The following assumptions were used for the calculation: risk free interest rate 1.16% expected life (in years) 4.94 expected volatility 228.65% and expected dividend yield 0.0%. On January 1, 2017, REGI granted an aggregate of 3,500,000 common stock options for services. These options vest upon grant, expire on January 1, 2022 and are exercisable at the following prices: Options Exercise price 2,500,000 $ 0.10 300,000 $ 0.20 300,000 $ 0.35 300,000 $ 0.50 100,000 $ 0.75 3,500,000 The fair value of the options was determined to be $170,268 using the Black-Scholes option pricing model, which requires management to make estimates that are subjective and may not be representative of the actual results. Changes in assumptions can materially affect estimates of fair value. The following assumptions were used for the calculation: risk free interest rate 1.93% expected life (in years) 5.00 expected volatility 214.63% and expected dividend yield 0.0%. A summary of REGI’s stock option activity for the nine months ended January 31, 2017 is as follows: Nine months ended January 31, 2017 Weighted Average Exercise Options Price Outstanding at beginning of period 1,938,000 $ 0.15 Granted during the period 7,200,000 $ 0.36 Outstanding at end of period 9,138,000 $ 0.31 Exercisable at end of period 7,684,500 $ 0.34 Weighted average fair value of options granted $ 0.05 At January 31, 2017, the Company had $266,707 of total unrecognized compensation cost related to non-vested stock options and warrants, which will be recognized over future periods. The intrinsic value of “in the money” exercisable options at January 31, 2017 was $Nil. A summary of REGI’s common stock warrant activity for the nine months ended January 31, 2017 is as follows: January 31, 2017 Weighted Average Exercise Warrants Price Outstanding at beginning of period 200,000 $ 0.25 Outstanding at end of period 200,000 0.25 Exercisable at end of period 200,000 $ 0.25 At January 31, 2017, the exercise price and the weighted average remaining contractual life of the outstanding warrants was $0.25 per share and 0.35 year, respectively. The intrinsic value of “in the money” exercisable warrants at January 31, 2017 was $Nil.

Commitments

Commitments	9 Months Ended
	Jan. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments	NOTE 7. COMMITMENTS Pursuant to a letter of understanding dated December 13, 1993 between REGI, 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. Pursuant to an agreement dated August 20, 1992, REGI acquired the U.S. rights to the original RC/DC Engine from Rand. REGI 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.

Subsequent Events

Subsequent Events	9 Months Ended
	Jan. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	NOTE 8. SUBSEQUENT EVENTS Subsequent to January 31, 2017, the Company received cash proceeds of $132,500 for issuance of Convertible Notes. In relation to the asset purchase from Reg Technologies, an additional 217,422 common shares of the Company were issued to Reg Technologies in March, 2017.

Basis of Presentation and Acc14

Basis of Presentation and Accounting Policies (Policies)	9 Months Ended
	Jan. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Property, Plant and Equipment	Property, plant and equipment Property and equipment are stated at cost, which includes the acquisition price and any direct costs to bring the asset into use at its intended location, less accumulated amortization. Amortization of property and equipment is calculated using the straight-line method to write off the cost, net of any estimated residual value, over their estimated useful lives of the assets as follows: Office equipment 5 years and electronic equipment 2 years. Amortization of office equipment is included in general and administrative expenses; amortization of research equipment is included in research and development expense.

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Jan. 31, 2017
Summary of Stock Options Activity	A summary of REGI’s stock option activity for the nine months ended January 31, 2017 is as follows: Nine months ended January 31, 2017 Weighted Average Exercise Options Price Outstanding at beginning of period 1,938,000 $ 0.15 Granted during the period 7,200,000 $ 0.36 Outstanding at end of period 9,138,000 $ 0.31 Exercisable at end of period 7,684,500 $ 0.34 Weighted average fair value of options granted $ 0.05
Summary of Common Stock Warrants Activity	A summary of REGI’s common stock warrant activity for the nine months ended January 31, 2017 is as follows: January 31, 2017 Weighted Average Exercise Warrants Price Outstanding at beginning of period 200,000 $ 0.25 Outstanding at end of period 200,000 0.25 Exercisable at end of period 200,000 $ 0.25
July 20, 2021 [Member]
Schedule of Common Stock Options Exercise Price	Options Exercise price 900,000 $ 0.10 600,000 $ 0.20 550,000 $ 0.35 450,000 $ 0.50 350,000 $ 0.75 350,000 $ 1.00 250,000 $ 1.25 250,000 $ 1.50 3,700,000
January 1, 2022 [Member]
Schedule of Common Stock Options Exercise Price	Options Exercise price 2,500,000 $ 0.10 300,000 $ 0.20 300,000 $ 0.35 300,000 $ 0.50 100,000 $ 0.75 3,500,000

Basis of Presentation and Acc16

Basis of Presentation and Accounting Policies (Details Narrative)	9 Months Ended
	Jan. 31, 2017
Office Equipment [Member]
Property, plant and equipment, estimated useful lives	5 years
Electronic Equipment [Member]
Property, plant and equipment, estimated useful lives	2 years

Going Concern (Details Narrativ

Going Concern (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016	Apr. 30, 2016
Accounting Policies [Abstract]
Net loss	$ 379,455	$ 46,020	$ 751,017	$ 226,685
Working capital deficit	2,042,530		2,042,530
Accumulated deficit	$ 13,701,549		$ 13,701,549		$ 12,950,532

Related Parties (Details Narrat

Related Parties (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Apr. 30, 2012	Apr. 30, 2016
Due to related parties	$ 1,842,507			$ 1,916,876
Issuance of secured convertible promissory notes	312,250
Interest expense	1,080	$ 1,080
CEO [Member]
Purchase of office furniture	11,827
Director [Member]
Purchase of research equipment	4,848
Promissory note due to related parties			$ 24,000
Promissory note bears interest rate			6.00%
CEO And Chief Engineer [Member]
Issuance of secured convertible promissory notes	$ 96,152
Convertible notes, repayable term	2 years
Promissory note bears interest rate	10.00%
Debt conversion price per share	$ 0.10
After Due Date [Member]
Promissory note bears interest rate	20.00%

Gain on Debt Settlement (Detail

Gain on Debt Settlement (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
Debt Disclosure [Abstract]
Gain on debt settlement			$ 666

Secured Convertible Promissor20

Secured Convertible Promissory Notes (Details Narrative) - USD ($)	9 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Issuance of convertible promissory notes	$ 312,250
Settled accounts payable due to unrelated parties	38,791
Settle accounts payable due to related party	96,152
Secured Convertible Promissory Notes [Member]
Issuance of convertible promissory notes	$ 312,250
Interest rate percentage	10.00%
Debt conversion price per share	$ 0.10
Secured Convertible Promissory Notes [Member] | After Due Date [Member]
Interest rate percentage	20.00%

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Jan. 02, 2017	Sep. 16, 2016	Aug. 12, 2016	Jan. 31, 2017	Jan. 31, 2016	Jan. 06, 2017	Apr. 30, 2016
Common stock, shares authorized				150,000,000			150,000,000
Stock option granted for services	3,500,000		3,700,000	7,200,000
Stock option expire date	Jan. 1, 2022		Jul. 20, 2021
Fair value of stock options	$ 170,268		$ 216,088	$ 386,356
Fair value assumptions expected risk free interest rate	1.93%		1.16%
Fair value assumptions expected life	5 years		4 years 11 months 9 days
Fair value assumptions expected volatility	214.63%		228.65%
Fair value assumptions expected dividend yield	0.00%		0.00%
Unrecognized compensation cost				266,707
Intrinsic value of exercisable options
Warrants exercise price				$ 0.25			$ 0.35
Warrants intrinsic value
Asset Purchase Agreement [Member] | Reg Technologies Inc. [Member]
Number of unregistered common shares issued for purchase of assets		50,929,388
Minimum [Member]
Common stock, shares authorized						100,000,000
Maximum [Member]
Common stock, shares authorized						150,000,000

Stockholders' Equity - Schedule

Stockholders' Equity - Schedule of Common Stock Options Exercise Price (Details) - $ / shares	Jan. 02, 2017	Aug. 12, 2016	Jan. 31, 2017
Total stock option granted	3,500,000	3,700,000	7,200,000
Stock option exercise price			$ 0.36
Options [Member]
Total stock option granted	2,500,000	900,000
Stock option exercise price	$ 0.10	$ 0.10
Options 1 [Member]
Total stock option granted	300,000	600,000
Stock option exercise price	$ 0.20	$ 0.20
Options 2 [Member]
Total stock option granted	300,000	550,000
Stock option exercise price	$ 0.35	$ 0.35
Options 3 [Member]
Total stock option granted	300,000	450,000
Stock option exercise price	$ 0.50	$ 0.50
Options 4 [Member]
Total stock option granted	100,000	350,000
Stock option exercise price	$ 0.75	$ 0.75
Options 5 [Member]
Total stock option granted		350,000
Stock option exercise price		$ 1
Options 6 [Member]
Total stock option granted		250,000
Stock option exercise price		$ 1.25
Options 7 [Member]
Total stock option granted		250,000
Stock option exercise price		$ 1.50

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Stock Options Activity (Details) - $ / shares	Jan. 02, 2017	Aug. 12, 2016	Jan. 31, 2017
Equity [Abstract]
Options, Outstanding at beginning of period			1,938,000
Options, Granted during the period	3,500,000	3,700,000	7,200,000
Options, Outstanding at end of period			9,138,000
Options, Exercisable at end of period			7,684,500
Weighted average exercise price, Outstanding at beginning of period			$ 0.15
Weighted Average Exercise Price, Granted during the period			0.36
Weighted Average Exercise Price, Outstanding at end of period			0.31
Weighted Average Exercise Price, Exercisable at end of period			0.34
Weighted average fair value of options granted			$ 0.05

Stockholders' Equity - Summar24

Stockholders' Equity - Summary of Common Stock Warrants Activity (Details) - Warrant [Member]	Jan. 31, 2017$ / sharesshares
Warrants, Outstanding at beginning of period | shares	200,000
Warrants, Outstanding at end of period | shares	200,000
Warrants, Exercisable at end of period | shares	200,000
Weighted Average Exercise Price, Outstanding at beginning of period | $ / shares	$ 0.25
Weighted Average Exercise Price, Outstanding at end of period | $ / shares	0.25
Weighted Average Exercise Price, Exercisable at end of period | $ / shares	$ 0.25

Commitments (Details Narrative)

Commitments (Details Narrative)	Dec. 13, 1993	Aug. 20, 1992
Percentage of patented technology owned by West Virginia University Research Corporation	5.00%
Percentage of net profits from sales, licenses, royalties or income of patented technology earned by West Virginia University Research Corporation	5.00%
Rand Energy Group Inc [Member]
Payment of royalty on net profit, percentage		5.00%
West Virginia University Research Corporation [Member]
Payment of royalty on net profit, percentage		1.00%

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Mar. 31, 2017	Jan. 31, 2017	Jan. 31, 2016
Proceeds from convertible notes		$ 312,250
Subsequent Event [Member]
Proceeds from convertible notes		$ 132,500
Subsequent Event [Member] | Reg Technologies Inc. [Member]
Purchase consideration of unregistered common shares	217,422