REGI U.S., Inc.

Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

REGI U.S., Inc.

Notes to Consolidated Financial Statements

(Unaudited)

July 31, 2018 and 2017

REGI U.S., Inc. (“we”, “our”, the “Company”, “REGI”) has been engaged in the business of developing and building improved axial vane-type rotary devices for civilian, commercial and government applications with the marketing and intellectual rights in the U.S. Effective February 17, 2017 REGI purchased the worldwide marketing and intellectual rights, other than in the U.S., from Reg Technologies, Inc. (“Reg Tech”), a British Columbia company. No revenue has been derived to date from REGI’s principal operations of research and development.

REGI formed a wholly-ownedwholly owned subsidiary, Rad Max Technologies, Inc., on April 10, 2007 in the State of Washington.

2) SIGNFICANT ACCOUNTING POLICIES

PrinciplesBasis of consolidationPresentation

This summary of significant accounting policies is presented to assist in understanding the financial statements. The accompanying unaudited interim consolidated financial statements and notes are representations of REGI have been preparedthe Company’s management, which is responsible for their integrity and objectivity. These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United StatesStates.

Principles of America, and should be read in conjunction with the audited financial statements and notes thereto for the year ended April 30, 2018 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 2018 as reported in the Form 10-K, have been omitted.consolidation

These financial statements include the accounts of the Company, its wholly owned subsidiariessubsidiary RadMax Technologies, Inc., and its previously wholly owned subsidiary Rand Energy Group Inc. (“Rand”).

All significant inter-company balances and transactions have been eliminated upon consolidation.

Investment in associates

Investments in which the Company has the ability to exert significant influence but does not have control are accounted for using the equity method whereby the original cost of the investment is adjusted annually for the Company’s share of earnings, losses and dividends during the current year.

The Company owns 26.1%entered into a Mutual Accord and Purchase Agreement on March 7, 2018, to sell all of equityits interest in Minewest Silver and& Gold Inc. (“Minewest”), a British Columbia company.company, in exchange for settlement of its outstanding debt of $7,217 to Minewest. The Company completed the final transfer of mining rights and Claim titles to Minewest owns a 70% interest subject to a 10% Net Profits Interest in mining property in British Columbia. As at the date of this report, Minewest is inactive due to lack of funding. As a result, the assets were impaired and no transactions are recorded for Minewest during the year ended April 30, 2018 and the three months ended July 31,on August 13, 2018.

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 andFor the purposes of the statement of cash equivalents includeflows, the Company considers all highly liquid investments with original maturities of three months or less.less when acquired to be cash equivalents.

Revenue Recognition

The Company accounts for revenue in accordance with Accounting Standards Codification (ASC) Topic 606: Revenue from Contracts with Customers. Revenue is recognized using the following five-step model: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company applies this model when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

Under Topic 606, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. The Company’s contracts with customers typically contain a single performance obligation. A contract’s transaction price is recognized as revenue when, or as, the performance obligation is satisfied.

The Company considers the contractual consideration payable by the customer when determining the transaction price of each contract. Revenue is recorded net of charges for certain sales incentives and discounts, and applicable state and local sales taxes, which represent components of the transaction price. Charges are estimated upon shipment of the product based on contractual terms, and actual charges typically do not vary materially from our estimates. Shipping estimates are determined by utilizing shipping costs provided by the various service providers websites based on number of packages, weight and destination. Shipping costs are included in the cost of goods sold as the revenue is captured in total sales.

The Company receives payments from customers based on the terms established in the Company’s contracts. When amounts are billed and collected before a performance obligation has been satisfied, they are included in deferred revenue.

Performance obligations for product sales are satisfied as of a point in time. Revenue is recognized when control of the product transfers to the customer, generally upon product shipment. Performance obligations for site support and engineering services are satisfied over-time if the customer receives the benefits as we perform work and we have a contractual right to payment. Revenue recognized on an over-time basis is based on costs incurred to date relative to milestones and total estimated costs at completion to measure progress.

The Company product revenue includes compressors and expanders. The Company also provides direct site support and engineering services to customers, such as repair and upgrade of its products. During the year ended April 30, 2019, the Company’s revenue was $60,000 from sale of prototypes.

During the three months ended July 31, 2019, revenue was earned from a single contract with one customer. As of July 31, 2019, the Company had a deferred revenue balance of $12,500 from this customer related to deliverables in progress at that date.

Furniture 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 depreciation.amortization.

Depreciation 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 23 years. Depreciation of office equipment is included in general and administrative expenses; Depreciation of research equipment is included in research and development expense.

FinancialFair value of financial instruments

Fair Value

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

Fair value measurements

ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

Derivative instruments

The Company has financing arrangements that contain freestanding derivative instruments or hybrid instruments that contained embedded derivative features. In accordance with U.S. GAAP, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the Company’s balance sheet and are measured at fair value with gains or losses recognized in earnings depending on the nature of the derivative or hybrid instruments. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and recognized at fair value with changes in fair value recognized as either a gain or loss in earnings if they can be reliably measured. When the fair value of embedded derivative features cannot be reliably measured, the Company measures and reports the entire hybrid instrument at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using a Binomial model, giving consideration to all of the rights and obligations of each instrument and precluding the use of “blockage” discounts or premiums in determining the fair value of a large block of financial instruments. Fair value under these conditions does not necessarily represent fair value determined using valuation standards that give consideration to blockage discounts and other factors that may be considered by market participants in establishing fair value.

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 currency is the US dollar and the reporting currency is the US 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 US 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.

For reporting purposes assets and liabilities with Canadian dollar as functional currency are translated into US dollar at the period end rates of exchange, and the results of the operations are translated at average rates of exchange for the period. The resulting translation adjustments are included the Company’s consolidated statements of operations and comprehensive loss. and stated in accumulated other comprehensive income in shareholders’ equity.US dollars.

Income taxes

Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “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 assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards.carryforwards. 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.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

Basic and diluted net loss per share

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 debt 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

The Company accounts for stock basedstock-based compensation in accordance with FASB ASC 718 which establishes the accounting treatment for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of FASB ASC 718, share-based paymentmeasurement of the value of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Non-employee stock-based compensation is measuredgranted at the Board of Director’s discretion to award select consultants for exceptional performance. Prior to issuance of the awards, the Company is not under any obligation to issue the stock options. The award vests over a specified period determined by the Company’s Board of Directors. The measurement date of the grant is also the date based onof the award. The fair value of options is expensed ratably during the specified vesting period.

The Company estimates the fair value of employee stock option awards on the date of grant using a Black-Scholes valuation model which requires management to make certain assumptions regarding: (i) the expected volatility in the market price of the Company’s common stock; (ii) dividend yield; (iii) risk-free interest rates; and (iv) the period of time employees are expected to hold the award prior to exercised (referred to as the expected holding period). The expected volatility under this valuation model is based on the current and historical implied volatilities of the Company’s common stock. The dividend yield is based on the approved annual dividend rate in effect and current market price of the underlying common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities ranging from one month to five years. The expected holding period of the awards granted is estimated using the historical exercise behavior of employees. In addition, the Company estimates the expected impact of forfeited awards and recognize stock-based compensation cost only for those awards expected to vest. The Company utilizes historical experience to estimate projected forfeitures. If actual forfeitures are materially different from estimates, stock-based compensation expense could be significantly different from what we have recorded in the current period. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as an expense overcompensation cost in the requisite service period (generallyof the vesting period). revision.

The Company accountshas adopted ASC 2018-07 for share-based payments to non-employees in accordance with FASB ASC 505-50.non-employee stock-based compensation.

Stock Granted to Employees and Non-Employees in Lieu of Cash Payments

The Company periodically issues shares of its common stock in lieu of cash payments to certain consultants, vendors and employees. The Company follows financial accounting standards that require the measurement of the value of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.

Use of estimates

The preparation of consolidated financial statements in conformityaccordance with accounting principles generally accepted in the United States of America requires management to makethe use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the datedates of the financial statements, and the reported amounts of revenues and expendituresexpenses during the reporting period. Significant areas requiring the use of management assumptions and estimates relate to long-lived asset impairments and stock-based compensation valuation. 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 compensationcould have a material effect on the Company’s reported financial position 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.operations.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

Research and development costs

Research and development costs are expensed as incurred.

Related Parties

In accordance with ASC 850 “Related Party Disclosure”, a party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Recent accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three months ended July 31, 2018.2019.

New Accounting Pronouncements

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation, Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 aligns accounting for share-based payment transactions for acquiring goods and services from nonemployees with transaction with employees. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

In February 2016, the FASB issued ASU 2016-02 Leases (Subtopic 842), which requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by most leases. The update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The ASU is effective for the Company in the first quarter of fiscal year 2020. The Company currently holds no leases subject to ASU 2016-02.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

3) GOING CONCERN

The Company incurred a net lossesloss of $434,942$261,356 for the three months ended July 31, 20182019 and has a working capital deficit of $1,294,617$2,054,101 and an accumulated deficit of $24,498,341$26,584,751 at July 31, 2018.2019. 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 July 31, 20182019 and for the three 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.

The Company also receives interim support from related parties and plans to raise additional capital through debt and/or equity financings. There is no assurance that any of these activities will be successful. There continues to be insufficient funds to provide enough working capital to fund ongoing operations for the next twelve months.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

4) EARNINGS PER SHARE

Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and warrants.

The outstanding securities at July 31, 2019 and April 30, 2019 that could have a dilutive effect are as follows:

For the three months ended July 31, 2019 and 2018, respectively, the effect of the Company’s outstanding stock options would have been anti-dilutive and so are excluded in the diluted EPS.

5) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents and conversion notes approximate fair value due to their limited time to maturity or ability to immediately convert them to cash in the normal course. The carrying values of convertible notes is net of a discount and does not reflect fair value of similar instruments. The approximate fair value of the convertible notes and accrued interest based upon the number of shares into which the notes and accrued interest are convertible is $1,297,831 and $1,978,836 using the closing price per share of stock at July 31 and April 30, 2019, respectively.

The table below sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of July 31, 2019 and April 30, 2019, respectively, and the fair value calculation input hierarchy that the Company has determined has applied to each asset and liability category.

6) PROPERTY AND EQUIPMENT

Property and equipment at July 31, 20182019 and April 30, 20182019 consists of the following:

Depreciation expense totaled $1,551$2,639 and $1,198$1,389 for the three months ended July 31, 20182019 and 2017,2018, respectively.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

7) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at April 30, 2019 consist of the following:

Accounts payable and accrued liabilities at July 31, 2019 consist of the following:

Related parties are the officers of the Company, companies with common directors or owners, and companies indirectly controlled by directors or officers of the Company. Amounts owed to directors or officers of the Company as of July 31, 2019 and April 30, 2019 are the result of consulting fees that are disclosed as director or executive compensation above, including amounts paid for benefit of the Company and represents out-of-pocket expenses that were not paid as of July 31, 2019 and April 30, 2019 respectively.

The Company does not have written agreements relating to related party advances, except as delineated in several on-demand promissory and convertible promissory notes, related parties (Note 9 and Note 10). The balances are non-interest bearing, unsecured and due on demand per verbal agreements with these related parties.

During the three months ended July 31, 2019, the Company recognized $93,750 of management fees and salaries, $7,172 of payroll tax expense and $19,740 of directors fees for related parties. During the three months ended July 31, 2018, the Company recognized $118,584 of management fees and salaries and $5,578 of payroll tax expense for related parties.

The amounts owed to related parties include accrued payroll, payroll taxes and board fees which, as of July 31, 2019 and April 30 2019, were $408,088 and $287,426, respectively.

8) DUE TO RELATED PARTIES

Related parties are the officers of the Company, companies with common directors or owners, and include companies indirectly controlled by directors or officers of the Company.

During the three months ended July 31, 2019, changes to the amounts owed to/by related parties are as follows:

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

9) DEMAND NOTES, RELATED PARTIES

On March 12, 2019, the Chief Executive Officer also loaned $10,000 to the Company, payable on demand and bearing simple interest at 12% per annum.

On April 23, 2019, a current member of the Company’s Board of Directors loaned $15,000 to the Company, payable on demand and being simple interest at 12% per annum.

For the three months ended July 31, 2019, the Company recognized $791 of interest expense on the Demand Notes, related parties.

The balance of the demand notes, related parties at July 31, 2019 and April 30, 2019 was $25,000.

10) SECURED CONVERTIBLE PROMISSORY NOTES

THREE MONTHS ENDED JULY 31, 2018

As of July 31, 2018, REGI has outstanding senior secured convertible promissory notes (the “Convertible Notes”) of $195,344 (net of unamortized discount of $50,166) issued to related parties and $1,172,654 (net of unamortized discount of $422,781) issued to non-related parties. As of April 30, 2018, REGI has outstanding Convertible Notes of $142,762 (net of unamortized discount of $54,816) issued to related parties and $997,468 (net of unamortized discount of $523,658) issued to non-related parties.

During the three months ended July 31, 2018 the Company issued Convertible Notes for cash proceeds of $90,000, service debt provided by related parties of $27,932, and service debt provided by non-related parties of $16,357. During the twelve months ended April 30, 2018 the Company issued Convertible Notes for cash proceeds of $1,212,849, settled accounts payable from previous years of $17,436, service debt provided by related parties of $131,577, and service debt provided by non-related parties of $182,696 of which $66,600 was finders’ fee and legal fees for cash based Convertible Notes recorded as discount to the Convertible 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 with the exception of one Convertible Note of $150,000 (net of unamortized discount of $7,684) repayable nine months after issuance, bearing simple interest of 2% during the term of the note and simple interest rate of 15% after the due date.

As of July 31, 2018, $17,436, $40,800, $1,622,710, $60,000 and $100,000 of the Convertible Notes are convertible at any time on or after ninety days from the issuance date into the Company’s common stocks at $0.174, $0.12, $0.10, $0.09 and $0.08 per share respectively.

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 determined that the conversion option was subject to a beneficial conversion feature and during the three months ended July 31, 2018 the company recorded a total beneficial conversion feature of $5,850, and amortization of the beneficial conversion feature of $111,377 as interest expense. During the year ended April 30, 2018 the company recorded a total beneficial conversion feature of $1,027,441, and amortization of the beneficial conversion feature of $510,311 as interest expense.

Amounts

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

THREE MONTHS ENDED JULY 31, 2019

NON-RELATED PARTIES

On November 30, 2018, the Company issued a Convertible Note to Labrys Fund LP (the “Labrys Note”) in the amount of $220,000, of which $198,000 of the actual amount was received in cash proceeds by the company and the remaining $22,000 was recognized as an Original Issuance Discount, to be amortized over the life of the note. The Labrys Note is due on May 30, 2019 and bears simple interest of 12% per annum. Proceeds from the Labrys Note paid the remaining balance of the Firstfire Note.

The Labrys Note allows the holder to convert outstanding debt to shares of the Company’s common stock at a price other than a fixed conversion price per share. The conversion price of the Labrys Note is 60% of the lowest traded price of the Company’s common stock during the twenty consecutive trading day period immediately preceding any conversion notice. Management has determined that these provisions cause the conversion options to require derivative liability accounting.

In connection with Labrys Note, the Company also issued 2,000,000 shares of common stock (the “Returnable Shares”) to the holder as a commitment fee, provided however, the Returnable Shares must be returned to the Company’s treasury if the Note is fully repaid prior to 180 days after the issuance date.

During the three months ended July 31, 2019, the Company issued to related parties, are unsecured, non-interest bearingtwo secured promissory notes in the amounts of $150,000 and due on demand. Related parties consist$75,000, respectively. See Note 12 for further discussion. The Company used $220,000 of the directorsproceeds from the notes to pay the outstanding balance of the Labrys Note. On June 5, 2019, Labrys returned 2,000,000 shares of common stock as the Labrys Note was repaid prior to 180 days of issuance.

During the three months ended July 31, 2019, the Company issued additional non-related parties convertible notes which settled accounts payable and officers and a former directoraccrued liabilities from previous years of REGI and companies controlled or significantly influenced by these parties. $8,737.

As of July 31, 2018, there was $139,018 due2019, the Company has outstanding non-related party secured convertible promissory notes of $921,293 (net of unamortized discount of $55,293) issued to non-related parties.

RELATED PARTIES

During the three months ended July 31, 2019, the Company issued Convertible Notes to related parties. parties totaling for cash proceeds of $100,000. The company issued convertible notes to related parties in the amounts of $27,932 for accrued liabilities.

As of April 30, 2018, there was $106,823 dueJuly 31, 2019, the Company has outstanding senior secured convertible promissory notes of $583,453 (net of unamortized discount of $45,030) issued to related parties.

CONVERSION EQUIVALENTS

Non-related parties

As of July 31, 2019, the aggregate principal balance of $976,587 and accrued interest balance of $162,845 due to convertible note holders, non-related parties is convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.092 per share, or an aggregate of 12,439,448 shares of the Company’s common stock.

Related parties

As of July 31, 2019, the aggregate principal balance of $628,483 and accrued interest balance of $57,866 due to convertible note holders, related parties is convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a weighted average conversion price of $0.075 per share, or an aggregate of 9,190,777 shares of the Company’s common stock.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

MATURITY

At July 31, 2019, principal payments on the convertible promissory notes are due as follows:

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 except as disclosed on the First Fire Note and the Labrys Note (Note 11).

11) DERIVATIVE LIABILITY

On April 18, 2018 and November 30, 2018, respectively, the Company issued two convertible notes (The Labrys Note and the First Fire Note) which contained provisions allowing holders of the notes to convert outstanding debt to shares of the Company’s common stock at a price other than a fixed conversion price per share. (Note 10). Management has determined that these provisions cause the conversion options to require derivative liability accounting.

The First Fire Note contained provisions which, after 180 days from the date of issuance, called for the debt conversion exercise price to be the lower of $0.10 per share or seventy-five percent (75%) of the lowest traded price of the Company’s common stock during the twenty consecutive trade days immediately preceding the date of a conversion. Management valued that portion of derivative liability associated with the First Fire Note at fair value of the derivative at the earliest date in which the holder of the note would have been eligible to convert the note to shares of the Company’s stock. The Company utilized the assumptions in determining fair value of the initial derivative liability associated with the First Fire Note:

The Company recognized loss on initial recording of the conversion derivative liability of $106,117 and concurrently recorded an unamortized discount on the derivative liability of $150,000, to be amortized over the remaining life of the note. The unamortized discount on the derivative liability was charged to the “Capital” account.

On November 19, 2018, the Company issued the Labrys Note, the proceeds of which paid the remaining outstanding balance of the First Fire Note. The Labrys Note contained provisions which called for the debt conversion exercise price to be sixty percent (60%) of the lowest traded price of the Company’s common stock during the twenty consecutive trade days immediately preceding the date of a conversion. The Company utilized the following assumptions in determining fair value of the initial derivative liability associated with the Labrys Note:

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

The Company recognized loss on initial recording of the conversion derivative liability associated with the Labrys Note in the amount of $351,870 and concurrently recorded an unamortized discount on the derivative liability of $195,000, to be amortized over the remaining life of the note. The unamortized discount on the derivative liability was charged to the “Capital” account.

At April 30, 2019, the fair value of conversion option derivative units was estimated at the period’s end using the Binomial option pricing model using the following assumptions:

Below is the detail of change in conversion option liability balance for the three months ended July 31, 2019 and year ended April 30, 2019, respectively:

12) PROMISSORY NOTES

On September 25, 2018, the Company entered into a promissory note with a director of the Company’s board. The term of the agreement is five (5) years and has principal and interest payments of $445 per month. The agreement has a stated interest rate of 12% per annum. The balance due to the related party at July 31, 2019 is $17,163.

On May 30, 2019, the Company issued to related parties, two secured promissory notes in the amounts of $150,000 and $75,000, respectively. The notes bear interest at ten percent (10%) per annum and are due and payable on May 30, 2021. The notes are secured by a General Security Agreement dated May 30, 2019. The Company used $220,000 of the proceeds from the notes to pay the balance of the Labrys note (Note 10). On June 5, 2019, Labrys returned 2,000,000 shares previously issued as collateral on its convertible promissory note.

13) STOCKHOLDERS’ EQUITY

Issuance of common stock on exercise of convertible of notes, related parties

During the three months ended July 31, 2019 and 2018, respectively, there were no shares of common stock issued for conversion of related party convertible promissory notes.

REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

Issuance of common stock on exercise of convertible notes, non-related parties

During the three months ended July 31, 2018, non-related party convertible promissory note of $12,047 and its accrued interest of $916 were converted into 129,622129,672 shares REGI’s common stock at $0.10 per share.

During the yearthree months ended April 30, 2018 relatedJuly 31, 2019 non-related party convertible promissory notes of $126,152$20,472 and accrued interest of $10,931$4,094 were converted into a total of 1,369,964156,432 shares of REGI’s common stock at $0.10conversion prices between $0.08 per share and convertible promissory notes of $755,185 and accrued interest of $41,173 were converted into a total of 1,054,779 shares of REGI’s common stock at $0.755$0.10 per share.

Common Shares Issued In Lieu of Cash for Services

During the three months ended July 31, 2019 and 2018, respectively, there were no shares of common stock issued for services.

Common shares issued for exercise of options

During the three months ended July 31, 2019 and 2018, respectively, there were no shares of common stock issued for exercise of options.

Returnable shares

On May 30, 2019, the Company issued to related parties, two secured promissory notes in the amounts of $150,000 and $75,000, respectively. The notes bear interest at ten percent (10%) per annum and are due and payable on May 30, 2021. The notes are secured by a General Security Agreement dated May 30, 2019. The Company used $220,000 of the proceeds from the notes to pay the balance of the Labrys note (Note 10). On June 5, 2019, Labrys returned 2,000,000 shares previously issued as collateral on its convertible promissory note.

14) SHARES TO BE ISSUED

Between April 15 and April 30, 2019, several holders elected to convert certain convertible notes with balance of $5,117 including accrued interest (Note 10) into 51,167 shares of the Company’s common stock at the conversion price of $0.10 per share as per terms of the agreements.

The Company received proceeds of $14,000 pursuant to the terms of a Private Placement a price of $0.07 per unit for 200,000 shares of its Common Stock and warrants to purchase an additional 200,000 shares of its common stock to an investor pursuant to a private placement of its securities. The offering consisted of the sale of “units” of the Company’s securities at the per unit price of $0.07. Each unit consisted of one shares of common stock and one warrants to purchase an additional share of common stock. Warrants issued pursuant to the 2019 Offering entitle the holders thereof to purchase shares of common stock for the price of $0.15 per share. The term of each warrant is for eighteen months commencing with its issuance date.

Between May 7 and June 5, 2019, the Company issued 251,167 shares of its common stock for Shares to Be Issued with a balance of $19,117 in consideration of the Private Placement and Conversion of promissory notes prior to April 30, 2019.

On July 31, 2019, as per Note 10, a holder elected to convert three non-related party notes with an aggregate balance of $1,800 including accrued interest of $300 into 18,000 common shares pursuant to the terms of the agreement at a conversion price of $0.10 per share.

On July 31, 2019, as per Note 10, a holder elected to convert two non-related party notes with an aggregate balance of $8,580 including accrued interest of $1,430 into 85,800 common shares pursuant to the terms of the agreement at a conversion price of $0.10 per share.

On August 1, 2019, the Company issued 400,000 shares of its common stock, and warrants to purchase an additional 400,000 shares of its common stock to an investor pursuant to a private placement of its securities (the “2019 Offering”). The 2019 Offering consisted of the sale of “units” of the Company’s securities at the per unit price of $0.05. Each unit consisted of one shares of common stock and one warrants to purchase an additional share of common stock. Warrants issued pursuant to the 2019 Offering entitle the holders thereof to purchase shares of common stock for the price of $0.10 per share. The term of each warrant is for eighteen months commencing with its issuance date. The Company raised a total of $20,000 to date pursuant to the 2019 Offering.

During the twelve months endedREGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

As of July 31, 2019 and April 30, 2018 non-related party convertible promissory notes2019, the balance of $531,940Shares to be issued was $30,380 and accrued interest$19,117, respectively.

15) STOCK OPTIONS

On August 12, 2016, the Company approved the 2016 Stock Option Plan to issue up to 5,000,000 shares to certain key directors and employees. Pursuant to the Plan, the Company has granted stock options to certain directors, consultants and employees. This Stock Option Plan was amended to issue up to 9,200,000 shares. All options granted by the Company under the 2016 Plan vested immediately.

The Stock Option Plan has a fixed maximum percentage of $26,569 were converted into 5,630,54310% of the Company’s outstanding shares that are eligible for the plan pool, whereby the number of Shares under the plan increases automatically increases as the total number of shares outstanding increase. The number of shares subject to the Stock Option Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company’s common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company’s assets.

The Stock Option plan also has terms and conditions, including without limitations that the exercise price for stock options granted under the Stock Option Plan must equal the stock’s fair value, based on the closing price per share of common stock, at the time the stock option is granted. The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology. Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board.

On June 6, 2019, the Board of Directors authorized the grant of 500,000 options to purchase shares of common stock at $0.10 per share, principal of $3,848 and accrued interest of $623 were converted into 55,892 shares of common stock at $0.08 per share, principal of $10,000 and accrued interest of $879 were converted into 99,661 shares of commons stock at $0.12 per share.

During the twelve months ended April 30, 2018 the Company issued 155,000 shares of its common stock for options exercised at $0.10 per share for a total of $15,500. Among the 155,000 shares of common stock, 55,000 were issued to a related party.

During the twelve months ended April 30, 2018 the Company issued 3,310,000 shares of its common stock for services provided by the directors, officers, employees and consultants of the Company for services to an officer of the Company. The Company estimated the fair value of this option grants using the Black-Scholes model with the total value recorded at $562,700 based on the market trading price as of the issuance date.following information and assumptions:

On November 2, 2017 the Company issued 3,172,269 shares of its common stock to Rand Energy. No value was assigned to these shares, as Rand Energy did not have any assets. These shares together with 827,721 shares of common stock initially owned by Rand Energy and recorded as the Company’s treasury shares, were transferred to the 49% shareholders of Rand Energy, as consideration for purchase of all of the 49% interest in Rand Energy, resulting in the Company owning 100% equity interest in Rand Energy.

On March 1, 2018, REGI granted an aggregate of 1,400,000 common stock options for services. TheseThe options vest upon grant, expire on March 1, 2023 and are exercisable at the following prices:

On April 30, 2018, REGI granted an aggregateThe expiration date of 500,000 common stockthe options is June 6, 2024. The fair value of the options is $48,084 and is recognized as stock-based compensation for services.the three months ended July 31, 2019. These options vest upon grant, expire on April 30, 2023costs are classified as management and are exercisable at the following prices:administrative expense.

A summary of REGI’s stock option activities for the three months ended JulyREGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2018 and year ended April 30 2018 are as follows:2019

The weighted average remaining contractual life of the options is 3.42 years at July 31, 2018, and 3.67 years at April 30, 2018.

At July 31 and April 30, 2018 there were no warrants outstanding.

The Company is subject to the income tax laws of the United States and the States of Washington and Oregon, and uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. The Company does not anticipate that the “Tax Reform Act” will have any substantial effect on the Company’s financial position in the near future.

Deferred tax assets consist of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.

The compositionfollowing is a summary of REGI’s deferred tax assetsthe Company’s options issued and outstanding in conjunction with the Company’s Stock Option Plans:

(a) Weighted average exercise price.

The following table summarizes additional information about the options under the Company’s Stock Option Plan as of July 31, 2019:

The total value of stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of April 30, 2019 and 2018, respectively, there was no unrecognized compensation cost related to stock-based options and awards.

The intrinsic value of exercisable options at July 31, 2019 and April 30, 2018:2019, was $Nil and $Nil, respectively.

Management has determined that the Company is subject to examination of income tax filings in the United States for the 2014 through 2016 tax years.REGI, U.S., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JULY 31, 2019

16) SUBSEQUENT EVENT

Management has evaluated subsequent events from the balance sheet date through the date the financial statements were available to be issued and determined that no material subsequent events exist other thatthan the following.

Subsequent to July 31, 2018,On August 1, 2019, the Company issued Convertible Notes for service debt provided bya convertible promissory note to a related partiesparty in consideration of $47,400.$50,000 The Convertible Notes areconvertible promissory note is 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.

Subsequent to July 31, 2018, The convertible promissory note is convertible at any time after the original issuance date into a totalnumber of 1,210,589 shares of the Company’s common stock, weredetermined by dividing the amount to be converted by a weighted average conversion price of $0.05 per share.

On or about August 1, 2019, the Company issued $50,000 in ten percent (10%) convertible debentures to a related party which are due two (2) year after their original issue date and are convertible into 1,000,000 shares of the Company’s common stock at the conversion price of $.05 per share.

On September 6, 2019, the Company issued 300,000 shares of its common stock in lieu of cash for Convertible Promissoryservices to three members of the board of directors with a fair value of $19,740.

On September 20, 2019, as per Note 10, a holder elected to convert a non-related party note with a balance of $36,000 including accrued interest of $6,000 into 300,000 common shares pursuant to the terms of the agreement at a conversion price of $0.12 per share.

On September 20, 2019, as per Note 10, a holder elected to convert a non-related party note with a balance of $12,000 including accrued interest of $2,000 into 100,000 common shares pursuant to the terms of the agreement at a conversion price of $0.12 per share.

On October 14, 2019, as per Note 10, a holder elected to convert two non-related party notes with an aggregate balance of $4,020 including accrued interest of $670 into 40,200 common shares pursuant to the terms of the agreement at a conversion price of $0.10 per share.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Caution Regarding Forward-Looking StatementsInformation

CertainIn addition to historical information, this Form 10-Q contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). This statement is included for the express purpose of availing the Company. of the protections of the safe harbor provisions of the PSLRA.

All statements contained in this Quarterly Report on Form 10-Q, constitute “forward-looking statements.other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words “believe,” These statements, identified by words such as “plan,“expect,” “anticipate,” “believe,“intends,” “estimate,” “should,“forecast,” “expect”“project,” and similar expressions includeexpressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future revenue, economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current viewspredictions of management with respect to future events and areis subject to a number of risks and uncertainties and other factorsdescribed under Item 1A - Risk Factors beginning on page 20 below that may cause our actual results performance or achievements, or industry results, to be materially different from those described indiffer materially.

Consequently, all of the forward-looking statements. Such risksstatements made in this Form 10-Q are qualified by these cautionary statements and uncertainties include those set forth in our 10-K forthere can be no assurance that the fiscal year ended April 30, 2018. We do not intend to update the forward- looking information to reflect actual results anticipated by management will be realized or, changes ineven if substantially realized, that they will have the factors affectingexpected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking information. We advise youstatements as they speak only of the Company’s views as of the date the statement was made. The Company undertakes no obligation 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.publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

Nature of Business

We are an early stage company engaged in the business of developing and building improved axial vane-type rotary devices for civilian, commercial and government applications. We own the worldwide intellectual and marketing rights to the RadMax®RadMax technology. Our vision is to develop advanced devices that reduce carbon footprint, reduce device size, weight and parts count, and increase fuel and manufacturing efficiencies. We intend to develop and market these devices in cooperation with industry and government partners. We are focused on creating new, disruptive technologies that are more efficient, compact and cost-effective than those currently available.

On July 27, 2016, we undertook our reorganization, naming our wholly owned subsidiary, RadMax Technologies, Inc. (“RadMax”) as the Company’s DBA for marketing and technology image.

Recent Development

Effective February 17, 2017 we purchased all assets of Reg Technologies Inc. (“Reg Tech”), a British Columbia public company, with the issuance of 51,757,119 shares of our common stock, increasing our ownership in the intellectual and marketing rights to the RadMax® technology from US only to worldwide. Reg Tech then distributed all these shares to its shareholders of record as dividends. This consolidation of ownership to the technology better enables our focused research and development efforts.

The asset purchase also resulted in our ownership of 49% of the issued and outstanding common shares of Rand Energy Group Inc. (“Rand Energy”), a British Columbia Company and 26% of the issued and outstanding common shares of Minewest Silver and Gold Inc. (“Minewest”), also a British Columbia company.

Rand Energy previously owned and transferred its intellectual and marketing rights to the original RadMax technology to Reg Tech. Effective November 2, 2017, we issued 3,172,269 shares of our common stock to Rand Energy. These shares together with the 827,721 shares of our common stock initially owned by Rand Energy and recorded as the Company’s treasury shares, were transferred to the 49% shareholders of Rand Energy, as consideration for purchasing all of their 49% interest in Rand Energy, resulting in the Company owing 100% equity interest of Rand Energy. This agreement with the 49% shareholder of Rand Energy settles any and all potential claims between the companies.

Minewest is engaged in the business of acquisition and exploration of mineral properties. Minewest owns a 70% interest subject to a 10% Net Profits Interest in mining property in British Columbia. As at the date the asset purchase and the date of this report, Minewest is inactive due to lack of funding.

Going Concern

We incurred net losses of $434,942$261,356 for the three months ended July 31, 20182019 and had a working capital deficit of $1,294,617 and$2,054,101and an accumulated deficit of $24,498,341$26,584,751 at July 31, 2018.2019. Further losses are expected until we enter into licensing agreements of our technologies. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

We may receive interim support from related parties and plan to raise additional capital through debt and/or equity financings. We may also raise additional funds when our outstanding options are exercised. However, there is no assurance that any of these activities will be realized.

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, 2018,2019, 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.

Results of Operations for Three Months Ended July 31, 2018 ComparedReports to the Three Months Ended July 31, 2017Security Holders

The Registrant does not issue annual or quarterly reports to security holders other than the annual Form 10-K and quarterly Forms 10-Q as electronically filed with the SEC. Electronically filed reports may be accessed atwww.sec.gov. Interested parties also may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 450 Fifth Street NW, Washington, DC 20549. Information may be obtained on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330.

PLAN OF OPERATION

The Company is engaged in the business of developing and commercially exploiting an improved axial vane type rotary technology known as RadMax^®.

Our early engineering and development work have not yet produced revenues and we have a working capital deficit. We have incurred net losses to July 31, 2019 totaling $ 26,584,751 and further losses are expected until we complete a licensing agreement with a manufacturer and reseller. At July 31, 2019, the Company had working capital deficiency of $2,054,101. These factors raise substantial doubt about the Company’s ability to continue as a net loss of $434,942 duringgoing 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 funds or develop a market for our products.

RESULTS OF OPERATIONS

Management continues to focus its research and development efforts and administrative support with the increased success in financing the required expenditures. Research and development expenses increased from $120,358 to $129,618 for the three months ended July 31, 2018 and 2019, respectively. General and administrative expense increased $2,156 from net loss of $390,552 during the three months ended July 31, 2017.

We incurred research and development expenses of $120,358 in$21,725 for the three months ended July 31, 2018 a decrease as compared to research and development expenses of $149,841 in$23,881 for the three months ended July 31, 2017.2019.

DuringThe Company’s basic and diluted loss per share was $0.002 for the three months ended July 31, 2018 we incurred interest expense of $153,063 on secured convertible promissory notes as compared to $54,250 on secured convertible promissory notes during the three months ended July 31, 2017.

Total other administrative expenses decreased from $186,461 in the three months ended July 31, 2017 to $161,521 in2019 and $0.004 for the three months ended July 31, 2018.

Liquidity and Capital ResourcesLIQUIDITY AND FINANCIAL CONDITION

During the three months ended July 31, 2018, we financed our operations mainly with2019, the Company issued Convertible Notes to a related party for cash proceeds of $90,000$100,000 and received cash proceeds from issuancedemand and related party promissory notes in the amount of secured$226,194. The Company repaid convertible party promissory notes.notes in the amount of $220,000 and received cash proceeds from the sale of common stock in the amount of $20,000.

At July 31, 2018 total amount owed to related parties is $139,018 as of July 31, 2018. This funding was necessary to meet our research and development targets and place us in a position to attain profit. TheseThe note balances owed to related parties are non-interestgenerally interest bearing, unsecured and repayable on demand. Our related parties 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.

We planAs of July 31, 2019, the Company had a working capital deficit of $2,054,101.

REGI U.S., Inc. anticipates continuing to raise additional capital throughrely on sales of its debt and/or equity financings. We cannot provide any assurance that additional funding will be available to finance our operations on acceptable termssecurities in order to enable uscontinue to complete our planfund ongoing operations. Issuances of operations.additional shares of common stock may result in dilution to the Company’s existing stockholders. There areis no assurancesassurance that wethe Company will be able to achieve furthercomplete any additional sales of equity securities or that it will be able arrange for other financing to fund its planned business activities.

The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, or ultimately to attain profitability. Potential sources of cash, or relief of demand for cash, include additional external debt, the sale of shares of the Company’s stock or alternative methods such as mergers or sale of the Company’s assets. No assurances can be given, however, that the Company will be able to obtain any of these potential sources of cash. The Company currently requires additional cash funding from outside sources to sustain existing operations and to meet current obligations and ongoing capital requirements.

The Company plans for the long-term continuation as a going concern include financing future operations through sales of our common stock equity and/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 technologies and our business will fail.debt securities.

Off-Balance Sheet ArrangementsOFF-BALANCE SHEET ARRANGEMENTS

We haveThe Company has no significant 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 isare material to ourits stockholders.

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 2 of the consolidated financial statements for the three months ended July 31, 2018, 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 theSecurities Exchange Act of 1934and are not required to provide the information under this item.

Item 4.Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

(a)EvaluationAt the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the President and Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures

(as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based upon anon that evaluation, of the effectiveness of our disclosure controlsPEO and procedures performed by our management, with participation of our Chief Executive Officer and our Chief Financial Officerthe PFO have concluded that as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer concluded that ourthe Company’s disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures.

Management of the Company believes that these material weaknesses are due to inadequatethe small size of the Company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties.duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

PEO and PFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the PEO and the PFO. The Certifications are required in accordance with Section 03 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Items of this report which you are currently reading is the information concerning the Evaluation referred to in Section 302 Certifications and this information should be read in conjunction with Section 302 Certifications for a more complete understanding of the topics presented.

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 werehave been no changes in our internal control over financial reporting during the quarter ended July 31, 20182019 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controlcontrols over financial reporting.

PART II-II - OTHER INFORMATION

Item 1. Legal Proceedings

We areREGI, U.S., Inc. is not a party to any pendingmaterial legal proceeding. Management is not awareproceedings, and, to Management’s knowledge, no such proceedings are threatened or contemplated. No director, officer or affiliate of REGI, U.S., Inc. and no owner of record or beneficial owner of more than 5% of the Company’s securities or any associate of any threatened litigation, claimssuch director, officer or assessments.security holder is a party adverse to REGI, U.S., Inc. or has a material interest adverse to REGI, U.S., Inc. in reference to pending litigation.

Item 1A. Risk FactorsThere have been no material changes from the risk factors as previously disclosed in the Company’s Form 10-K for the year ended April 30, 2019 which was filed with the SEC on September 11, 2019

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 MayOn August 1, 2018 to the date of this report,2019, the Company issued a convertible promissory notes for cash proceedsnote to a related party in consideration of $90,000 and service debt of $91,689.$50,000 The convertible notes arepromissory note is 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.

From May 1, 2018 to The convertible promissory note is convertible at any time after the original issuance date into a number of this report, 1,340,211 shares of the Company’s common stock, weredetermined by dividing the amount to be converted by a weighted average conversion price of $0.05 per share.

On or about August 1, 2019, the Company issued $50,000 in ten percent (10%) convertible debentures to a related party which are due two (2) year after their original issue date and are convertible into 1,000,000 shares of the Company’s common stock at the conversion price of $.05 per share.

On September 6, 2019, the Company issued 300,000 shares of its common stock in lieu of cash for convertible promissoryservices to three members of the board of directors with a fair value of $19,740.

On September 20, 2019, as per Note 10, a holder elected to convert a non-related party note with a balance of $36,000 including accrued interest of $6,000 into 300,000 common shares pursuant to the terms of the agreement at a conversion price of $0.12 per share.

On September 20, 2019, as per Note 10, a holder elected to convert a non-related party note with a balance of $12,000 including accrued interest of $2,000 into 100,000 common shares pursuant to the terms of the agreement at a conversion price of $0.12 per share.

On October 14, 2019, as per Note 10, a holder elected to convert two non-related party notes with an aggregate balance of $4,020 including accrued interest of $670 into 40,200 common shares pursuant to the terms of the agreement at a conversion price of $0.10 per share.

Item 3. Defaults Upon Senior SecuritiesNone

None.

Item 4. Mine Safety Disclosures

Not applicable.applicable

Item 5. Other InformationNone

None.

Item 6. Exhibits

(a) Exhibit(s)

SIGNATURES

Pursuant to the requirements of theSecurities Exchange Act of 1934,, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

September 17, 2018