News out! Here it is:
September 18, 1998
REGI U S INC (RGUS)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION
The Company was incorporated in the State of Oregon, U.S.A. on July 27, 1992 and is in the business of developing and
commercially exploiting an improved axial vane type rotary engine known as the Rand Cam/Direct Charge Engine ("The
Engine"), which is a variation of the original Rand-Cam Engine. The world-wide marketing and intellectual rights, other than the
U.S., are held by Rand Energy Group Inc. ("REGI") which controls the Company. The Company owns the U.S. marketing and
intellectual rights and has a project cost sharing agreement, effective May 1, 1993, whereby it will fund 50% of the further
development of The Engine and REGI will fund 50%.
In a development stage company, management devotes most of its activities to establishing a new business. Planned principle
activities have not yet produced significant revenue. The ability of the Company to emerge from the development stage with
respect to its planned principle business activity is dependent upon its successful efforts to raise additional equity financing and
develop the market for its products.
PROGRESS REPORT FROM MAY 1, 1998 TO SEPTEMBER 14, 1998
The design of the special transmission oil pump for automobiles has been completed for prototype fabrication and testing.
According to the Company's engineer, Paul Lamarche, the major advantages of the Rand Cam-TM- design are the small size,
ability to have multiple pressures in one pump and being able to turn off one half of the pump when a predetermined RPM has
been achieved in order to save on fuel consumption.
The heavy duty test fixture is now operational to test the diesel engine prototype, which tests will include natural gas and/or
propane on the Rand Cam-TM- engine. It will also be used to test other Rand Cam-TM- applications, such as the air
conditioning compressors and any foreseeable new development programs. The 100 horsepower electric motor is now
operational with fully variable speeds from 0 - 2000 RPM.
On August 7th, 1998 the Company announced that an agreement was completed with Trans Air Manufacturing Corporation
("TRANS AIR") to jointly develop and manufacture a working prototype compressor for air conditioning for buses. Trans Air,
founded in 1979, has successfully manufactured and supported the highest quality transportation air conditioning systems in the
industry using a single basic premise, which is to make a quality product and stand behind it.
By News Release dated August 19th, 1998 the Company announced that, pursuant to a private placement of 500,000 units at
a price of $2.00 per unit completed in 1995, the warrants forming part of the units were exercisable at a price of $2.50 per
share, expiring on August 16, 1998. Due to the current market price of the common stock of the Company, the Board of
Directors elected to extend the term of the warrants for an additional six months. Accordingly, the 500,000 warrants are now
exercisable on or before February 16, 1999 at a price of $2.50 per share.
On August 24th, 1998 the Company announced that the current oil pump tests results were successfully completed by the
Company's engineers. The Rand Cam-TM- oil pump was tested up to 650 psi with no signs of stress. The conventional oil
pump pressures peak at 300 psi with 200 psi as the standard operating pressure. The Company's engineers have commenced
the production design for the Rand Cam-TM- oil pump for commercialization for automotive use to be completed by
November of this year. The Company believes that this unique patented rotary design should open a completely new
opportunity for all pump applications. The Rand Cam-TM- pump is an efficient, smooth and quiet running design that will
require very little maintenance due to the simplicity of the design.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 1998 COMPARED TO THE
THREE MONTHS ENDED JULY 31, 1997
There were no revenues from product licensing during the periods.
The net loss in 1998 decreased by $13,000 to $63,000 compared to $76,000 in 1997. The decreased net loss in 1998 was
due to administrative expenses which decreased by $16,000 to $14,000 as compared to $30,000 in 1997. The major
components of this decrease was due to a decrease in investor relations consulting by $15,000 to $6,000 as compared to
$21,000 in 1997. Only one full time consultant was hired for investor relations activities during the quarter. The Company has
cost sharing arrangements with other affiliated companies to keep overall overhead costs to a minimum.
Basic ongoing research and development activities took place during the three months ended July 31, 1998. Paul LaMarche
and Patrick Badgley undertook the majority of development activities during the quarter and were paid technical consulting fees
totalling $21,000 and compared to $14,000 in the comparative period. The low costs for research and development is due to
more cost effective prototype construction activity than in previous periods.
LIQUIDITY
During the three months ended July 31, 1998, the Company's operations were financed through advances from its parent
company Rand Energy Group Inc. ("RAND"). Rand periodically sells small quantities of common stock of the Company into
the open market and advances the proceeds to the Company as needed.
Unexercised stock options and warrants, if exercised, could raise $1,163,000 of additional funds.
The Company continues to finance its operations through funding from RAND. The Company also has a cost sharing
arrangement with RAND for ongoing research and development of the RC/DC Engine. The Company is solely responsible for
ongoing development of the recently acquired world-wide rights (except Canada) to the Air/Vapor Flow System.
The Company's ability to pay debts as they become due and to finance future overhead and development is contingent upon
receiving funds from RAND which is dependent upon the ability to sell shares it owns of the Company into the market.
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