Attached files
| file | filename |
|---|---|
| EX-31.1 - EXHIBIT 31.1 - REGI U S INC | ex31-1.htm |
| EXCEL - IDEA: XBRL DOCUMENT - REGI U S INC | Financial_Report.xls |
| EX-31.2 - EXHIBIT 31.2 - REGI U S INC | ex31-2.htm |
| EX-32.2 - EXHIBIT 32.2 - REGI U S INC | ex32-2.htm |
| EX-32.1 - EXHIBIT 32.1 - REGI U S INC | ex32-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the quarterly period ended July 31, 2013 |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the transition period _____________to _____________ |
Commission File Number 0-23920
| REGI U.S., INC. |
| (Exact name of Small Business Issuer as specified in its charter) |
| Oregon | 91-1580146 | |
| (State or other jurisdiction of incorporation or | (IRS Employer Identification No.) | |
| organization) |
| #240 – 11780 Hammersmith Way | ||
| Richmond, BC, Canada | V7A 5A9 | |
| (Address of principal executive offices) | (Postal or Zip Code) |
Issuer’s telephone number, including area code: (604) 278-5996
| NA |
| (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of ’‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | [ ] | Accelerated filer | [ ] | |
| Non-accelerated filer | [ ] | 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 [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 31,969,298 shares of common stock with no par value outstanding as of September 16, 2013.
TABLE OF CONTENTS
| Page | |||
| PART I FINANCIAL INFORMATION | |||
| Item 1. | Financial Statements | 3 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 | |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 6 | |
| Item 4. | Controls and Procedures | 6 | |
| PART II OTHER INFORMATION | |||
| Item 1. | Legal Proceedings | 7 | |
| Item 1A. | Risk Factors | 7 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 7 | |
| Item 3. | Defaults Upon Senior Securities | 7 | |
| Item 4. | Mine Safety Disclosures | 7 | |
| Item 5. | Other Information | 7 | |
| Item 6. | Exhibits | 7 | |
| SIGNATURES | 8 | ||
| 2 |
| 3 |
(A Development Stage Company)
Consolidated Balance Sheets
(Unaudited)
| July 31, 2013 | April 30, 2013 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 516 | $ | 16,377 | ||||
| Total Assets | $ | 516 | $ | 16,377 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 239,609 | $ | 226,287 | ||||
| Due to related parties | 1,477,688 | 1,499,300 | ||||||
| Total Current Liabilities | 1,717,297 | 1,725,587 | ||||||
| Stockholders’ Deficit: | ||||||||
| Common stock, 100,000,000 shares authorized, no par value, 31,855,965 and 31,675,965 shares issued and outstanding, respectively | 10,212,637 | 10,019,361 | ||||||
| Deficit accumulated during the development stage | (11,929,418 | ) | (11,728,571 | ) | ||||
| Total Stockholders’ Deficit | (1,716,781 | ) | (1,709,210 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 516 | $ | 16,377 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-1 |
(A Development Stage Company)
Consolidated Statements of Expenses
(Unaudited)
| July 27, 1992 | ||||||||||||
| Three Months Ended | (Inception) | |||||||||||
| July 31, | Through | |||||||||||
| 2013 | 2012 | July 31, 2013 | ||||||||||
| Operating Expenses: | ||||||||||||
| Amortization | $ | - | $ | - | $ | 130,533 | ||||||
| General and administrative | 189,337 | 184,191 | 9,564,509 | |||||||||
| Impairment loss | - | - | 72,823 | |||||||||
| Gain on settlement of accounts payable | - | - | (200,351 | ) | ||||||||
| Research and development | 11,150 | 32,704 | 4,740,390 | |||||||||
| Loss from Operations: | (200,487 | ) | (216,895 | ) | (14,307,904 | ) | ||||||
| Other Income (Expense): | ||||||||||||
| Interest expense | (360 | ) | (360 | ) | (2,210 | ) | ||||||
| Gain on change in fair value of derivative liabilities | - | - | 280,488 | |||||||||
| Other Income (Expense) | (360 | ) | (360 | ) | 278,278 | |||||||
| Net loss | $ | (200,847 | ) | $ | (217,255 | ) | $ | (14,029,626 | ) | |||
| Net loss per share – basic | $ | (0.01 | ) | $ | (0.01 | ) | ||||||
| Net loss per share – diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||||||
| Weighted average shares outstanding – basic | 31,691,000 | 29,474,000 | ||||||||||
| Weighted average shares outstanding – diluted | 31,691,000 | 29,474,000 | ||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-2 |
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
| July 27, 1992 | ||||||||||||
| Three Months Ended | (Inception) | |||||||||||
| July 31, | Through | |||||||||||
| 2013 | 2012 | July 31, 2013 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (200,847 | ) | $ | (217,255 | ) | $ | (14,029,626 | ) | |||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||||||
| Amortization | - | - | 130,533 | |||||||||
| Donated services | 30,000 | 30,000 | 1,725,000 | |||||||||
| Impairment loss | - | - | 72,823 | |||||||||
| Shares issued for services | - | 6,000 | 437,900 | |||||||||
| Options and warrants issued for services | 136,321 | 132,299 | 1,806,242 | |||||||||
| Amortization of deferred compensation | - | - | 373,795 | |||||||||
| Gain on settlement of accounts payable | - | - | (200,351 | ) | ||||||||
| Gain on change in fair value of derivative liabilities | - | - | (280,488 | ) | ||||||||
| Write-off of intellectual property | - | - | 578,509 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | - | - | (3,000 | ) | ||||||||
| Due to related parties | 360 | - | 360 | |||||||||
| Accounts payable and accrued liabilities | 13,322 | 104 | 448,526 | |||||||||
| Net cash used in operating activities | (20,844 | ) | (48,852 | ) | (8,939,777 | ) | ||||||
| Cash flows from investing activities: | ||||||||||||
| Patent protection costs | - | - | (38,197 | ) | ||||||||
| Advances to related parties | - | - | (260,136 | ) | ||||||||
| Collection of advances to related parties | - | - | 260,136 | |||||||||
| Purchase of equipment | - | - | (198,419 | ) | ||||||||
| Net cash used in investing activities | - | - | (236,616 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Advances (to) from related parties | (21,972 | ) | (20,865 | ) | 1,788,165 | |||||||
| Bank indebtedness | - | (251 | ) | - | ||||||||
| Proceeds from convertible debentures | - | - | 5,000 | |||||||||
| Proceeds from the exercise of options | - | - | 20,000 | |||||||||
| Proceeds from the sale of common stock, net of issuance costs | 26,955 | 70,000 | 7,363,744 | |||||||||
| Net cash provided by financing activities | 4,983 | 48,884 | 9,176,909 | |||||||||
| Net change in cash and cash equivalents | (15,861 | ) | 32 | 516 | ||||||||
| Cash and cash equivalents, beginning of period | 16,377 | 44 | - | |||||||||
| Cash and cash equivalents, end of period | $ | 516 | $ | 76 | $ | 516 | ||||||
| Supplemental Disclosures: | ||||||||||||
| Interest paid | $ | - | $ | - | $ | - | ||||||
| Income tax paid | - | - | - | |||||||||
| Non-Cash Investing and Financing Activities: | ||||||||||||
| Warrants issued for equity line of credit | $ | - | $ | - | $ | 1,561,406 | ||||||
| Cumulative effect of change in accounting principle | - | - | 280,488 | |||||||||
| Shares issued to settle debt | - | - | 496,000 | |||||||||
| Shares issued for convertible debenture | - | - | 5,000 | |||||||||
| Shares issued for intellectual property | - | - | 345,251 | |||||||||
| Affiliate’s shares issued for intellectual property | - | - | 200,000 | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
(A Development Stage Company)
Notes to Unaudited Consolidated Financial Statements
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of REGI U.S., Inc. (“REGI”) 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, 2013 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 2013 as reported in Form 10-K, have been omitted.
Reclassifications
Certain comparative figures have been reclassified to conform to the current year’s presentation.
NOTE 2. GOING CONCERN
REGI incurred net losses of $200,847 for the three months ended July 31, 2013, has a working capital deficit of $1,716,781 and an accumulated deficit of $11,929,418 at July 31, 2013. 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 consolidated financial statements as of July 31, 2013 and for the three months ended July 31, 2013 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.
NOTE 3. RELATED PARTIES
Amounts due to and from related parties are unsecured, non-interest bearing and due on demand except for the $24,000 promissory note described below. Related parties consist of companies controlled or significantly influenced by the President of REGI. As of July 31, 2013, there was no balance due from related parties and an aggregate of $1,477,688 due to related parties. As of April 30, 2013, there was no balance due from related parties and $1,499,300 due to related parties.
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 common director with the Company. The promissory note bears interest rate of 6% per annum, is unsecured and due on demand. During the three months ended July 31, 2013, interest expense of $360 was recorded on the promissory note. The principal balance of the note is included as due to related parties in the consolidated balance sheet.
During the three month period ended July 31, 2013, the President, CEO and director of REGI provided consulting services to REGI valued at $22,500, which were accounted for as donated capital and charged to expense during the period. The same amount was recorded in the three month period ended July 31, 2012.
| F-4 |
During the three month period ended July 31, 2013, the CFO, COO and director of REGI provided consulting services to REGI valued at $7,500, which were accounted for as donated capital and charged to expense during the period. The same amount was recorded in the three month period ended July 31, 2012.
During each of three month periods ended July 31, 2013 and 2012, management fees of $7,500 were accrued to a company having a common director.
REGI currently utilizes 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.
NOTE 4. STOCKHOLDERS’ EQUITY
a) Common Stock Options and Warrants
During the three month periods ended July 31, 2013 and 2012, the Company recorded aggregate stock-based compensation associated with options and warrants of $136,321 and $132,299, respectively. At July 31, 2013 and April 30, 2013, the Company had $401,072 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 grant or modification during the three months ended July 31, 2013 and 2012 was determined using the Black-Scholes option pricing model and the following assumptions:
| Three Months Ended July 31, | ||||||||
| 2013 | 2012 | |||||||
| Risk free interest rate | 0.11% - 0.15% | 0.15 - 0.74% | ||||||
| Expected life | 0.09-1.64 | 0.01 - 5 years | ||||||
| Annualized volatility | 191.11% - 299.98% | 204.98% - 377.83% | ||||||
| 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.
A summary of REGI’s stock option activity for the three months ended July 31, 2013 is as follows:
| July 31, 2013 | |||||||||
| Weighted | |||||||||
| Average | |||||||||
| Exercise | |||||||||
| Options | Price | ||||||||
| Outstanding at beginning of period | 2,638,000 | $ | 0.15 | ||||||
| Outstanding at end of period | 2,638,000 | $ | 0.15 | ||||||
| Exercisable at end of period | 659,500 | $ | 0.15 | ||||||
| Weighted average fair value of options granted | $ | 0.17 | |||||||
At July 31, 2013, the range of exercise prices and the weighted average remaining contractual life of the outstanding options was $0.10 to $0.20 per share and 4.13 years, respectively. The intrinsic value of “in the money” exercisable options at July 31, 2013 was $29,397.
At April 30, 2013, the range of exercise prices and the weighted average remaining contractual life of the outstanding options was $0.10 to $0.20 per share and 4.83 years, respectively. The intrinsic value of “in the money” exercisable options at April 30, 2013 was $158,005.
| F-5 |
A summary of REGI’s common stock warrant activity for three months ended July 31, 2013 is as follows:
| July 31, 2013 | |||||||||
| Weighted | |||||||||
| Average | |||||||||
| Exercise | |||||||||
| Warrants | Price | ||||||||
| Outstanding at beginning of period | 3,730,150 | $ | 0.18 | ||||||
| Outstanding at end of period | 3,730,150 | $ | 0.18 | ||||||
| Exercisable at end of period | 3,692,650 | $ | 0.18 | ||||||
On July 27, 2013, the Company extended the expiration date of 833,950 outstanding common stock warrants with expiration dates between July 30, 2012 and December 17, 2013 by one year and reduced their exercise price from $0.50 to $0.25. REGI calculated the incremental increase in the fair value using the Black-Scholes option pricing model and determined it to be $136,321 which was expensed in three months ended July 31, 2013.
At July 31, 2013, the range of exercise prices and the weighted average remaining contractual life of the outstanding warrants was $0.10 to $0.25 per share and 0. 75 year, respectively. The intrinsic value of “in the money” exercisable warrants at July 31, 2013 was $106,707.
At April 30, 2013, the range of exercise prices and the weighted average remaining contractual life of the outstanding warrants was $0.15 to $0.25 per share and 1.01 years, respectively. The intrinsic value of “in the money” exercisable warrants at April 30, 2013 was $783,466.
b) Cash Consideration
During July 2013, the Company sold an aggregate of 180,000 units in a private placement for cash proceeds of approximately $27,000 at $0.15 per unit. Each unit consists of one common share and two common stock purchase warrants, with one warrant exercisable at $0.20 per share for one year and one warrant exercisable at $0.25 per share for two years into the Company’s common stock from the closing date of the private placement. As at the date of this report the private placement has not been closed.
NOTE 5. SUBSEQUENT EVENT
During August, 2013, the Company sold an aggregate of 188,333 units in a private placement for cash proceeds of $28,250 at $0.15 per unit. Each unit consists of one common share and two common stock purchase warrants, with one warrant exercisable at $0.20 per share for one year and one warrant exercisable at $0.25 per share for two years into the Company’s common stock.
| F-6 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth in our 10-K for the fiscal year ended April 30, 2013. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.
All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.
Nature of Business
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 “RadMax® Engine”), used in the design of lightweight and high efficiency engines, compressors and pumps. We have a project cost sharing agreement, whereby the development of the RadMax™ Engine will be funded equally by us and by Reg Technologies Inc. (“Reg Tech”), a public company listed for trading on the TSX Venture Exchange and on OTC.BB. Reg Tech holds approximately 10.50% of our issued and outstanding shares.
Going Concern
We incurred net losses of $200,847 for the three months ended July 31, 2013, has a working capital deficit of $1,716,781 and an accumulated deficit of $11,929,418 at July 31, 2013. Further losses are expected until we enter into a licensing agreement with a manufacturer and reseller. These factors raise substantial doubt about the ability of the Company to continue as a going concern.
We may receive interim support from affiliated companies and plan to raise additional capital through debt and/or equity financings. We may also raise additional funds through the exercise of warrants and stock options, if exercised. However, there is no assurance that any of these activities will be successful.
Due to the uncertainty of our ability to generate sufficient revenues from our operating activities and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, in their report on our financial statements for the year ended April 30, 2013, our registered independent auditors included additional comments indicating concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our registered independent auditors. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| 4 |
Results of Operations for Three Months Ended July 31, 2013 Compared to the Three Months Ended July 31, 2012
We had a net loss of $200,847 during the three months ended July 31, 2013, decreased by $16,408 from net loss of $217,255 during the three months ended July 31, 2012.
Research and development expenses decreased from $32,704 in three months ended July 31, 2012 to $11,150 in three months ended July 31, 2013, due to fewer engineering hours are required during the three months ended July 31, 2013.
Total general and administrative expenses increased from $184,191 in three months ended July 31, 2012 to $189,337 in the three months ended July 31, 2013. We recorded financing cost of $136,321 for warrant re-pricing and extensions in the first quarter of 2014 compared to $83,977 in 2013. We did not record option-based compensation in the first quarter of 2014 compared to $48,322 in 2013.
Other expense comparisons are as follows:
| ● | Professional fees including legal, accounting, audit and auditors’ review expenses increased slightly from $8,000 during the three months ended July 31, 2012 to $9,192 during the three months ended July 31, 2013; |
| ● | Office and administrative expenses decreased from $12,659 during the three months ended July 31, 2012 to $8,017 during the three months ended July 31, 2013; and |
| ● | Consulting and management fees remained at $37,500 for the three months ended July 31, 2012 and 2013. |
During the three months ended July 31, 2012 and 2013 we recorded interest expense of $360 on the same promissory note issued to a related party.
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
Liquidity and Capital Resources
During the three months ended July 31, 2013, we financed our operations mainly through proceeds of $26,955 from the sale of common stock net of share issuance costs.
During the three months ended July 31, 2013 we had net proceeds of $21,972 returned to our affiliated companies. At July 31, 2013 total amount owing to related parties is $1,477,688 or 86.05% of total liabilities as of July 31, 2013. This funding was necessary with a downturn in the financial market to complete the RadMax™ Engine and place us 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.
We also plan to raise additional capital through debt and/or equity financings. We cannot provide any assurance that additional funding will be available to finance our operations on acceptable terms in order to enable us to complete our plan of operations. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue the development of our RadMax™ Engine and our business will fail.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.
| 5 |
Critical Accounting Policies
We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 1 of the consolidated financial statements for the three months ended July 31, 2013, attached hereto.
Contractual Obligations
We do not currently have any contractual obligations requiring any payment obligation from us.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures
Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our management, with participation of our Chief Executive Officer and our Chief Financial Officer as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to inadequate segregation of duties.
As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
We are taking steps to enhance and improve the design of our disclosure controls. During the period covered by this interim report, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we need to appoint additional qualified personnel to address inadequate segregation of duties, 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.
(b) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 6 |
We are not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
From May 1, 2013 to the date of this report, we sold an aggregate of 368,333 units for cash proceeds of $55,250. Each unit consists of one common share and two common stock purchase warrants, with one warrant exercisable at $0.20 per share for one year and one warrant exercisable at $0.25 per share for two years into the Company’s common stock.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
| (a) | Exhibit(s) | |
| 31.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 101.INS | XBRL Instance Document** | ||
| 101.SCH | XBRL Taxonomy Extension Schema Document** | ||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document** | ||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document** | ||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document** | ||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document** | ||
| * | Filed Herewith. | |
| ** | In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”. |
| 7 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
September 16, 2013
| REGI U.S., INC. | |
| /s/ John G. Robertson | |
| John G. Robertson, | |
| President and Chief Executive Officer |
| 8 |