SOURCE: Megola Inc.

Megola Inc.

April 20, 2009 11:58 ET

Megola Inc. Offers Shareholders the Opportunity to Exchange Common Stock for Voting Preferred Stock at $0.20 per Common Share

POINT EDWARD, ON--(Marketwire - April 20, 2009) - Megola Inc. (PINKSHEETS: MGOA) is pleased to announce that the Company's Board of Directors has approved an offer to exchange Company Common Stock at a price of $0.20 for every common share exchanged for shares of the Company's Series A Convertible Preferred Stock.

Purpose of the Exchange Offer

The purpose of this exchange offer is to exchange any and all of the company's outstanding common stock for Series A Convertible Preferred Stock. The exchange offer is being made as part of a plan to reduce the number of issued and outstanding shares of common stock available that trade on the open market.

"The Board believes that our current share price is not representative of the true value of the Company and that our stock should be trading at higher levels, so therefore we are offering to exchange the Company's Common Stock based on a value of $0.20 per share. The Company has undergone several significant changes with the addition of its Hartindo Product Line. This exchange program is the first step in restructuring the Company's common shares. Although we believe that a share exchange program is in the best interests of Megola and its shareholders," stated Joel Gardner, C.E.O of Megola, Inc, "we are not making any recommendation regarding whether our shareholders should tender or refrain from tendering their Common Stock for exchange in the exchange offer."

About Offering

For every twenty five (25) common shares of the Company's Common Stock tendered in the exchange, shareholders will receive one (1) share of the Company's newly created Series 'A' Convertible Preferred Stock, valued at $5.00 per share. The holders of Series A Convertible Preferred Stock shall have one-hundred (100) votes for each full share Series A Convertible Preferred Stock. The company will be completing the exchange based upon the common stock value of $0.20 per share. The deadline for accepting the exchange offer and delivery of certificates to the Company's Transfer Agent is by the close of business, 4 p.m. EDT on May 29, 2009 and will only be offered to shareholders of record as of 4 p.m. EDT, Friday, April 24, 2009.

Shareholders do not have to tender all of their Common Stock to participate in the exchange offer. Shareholder may choose to tender in the exchange offer all or any portion of the Common Stock held providing that a minimum of ten thousand (10,000) common shares for exchange is tendered.

Shareholders who do not participate will still own their Common Stock and will still be able to trade on the open market.

Shareholders as of market close April 24, 2009 will receive a mailing from the company with all instructions. After market close on April 24, 2009 all material and instructions will be available on Megola's web site or a shareholder may call or email as per information at bottom of press release.

Holding Period and Converting Preferred Back to Common

No conversion of Series A Convertible Preferred Stock to Common Stock can occur until after a holding period of twelve (12) months from May 29, 2009. Thereafter, at shareholder option, shareholder may convert the Series A Convertible Preferred Stock into Common Stock. For purposes of conversion, the value of each share of Series A Convertible Preferred Stock will be deemed to be $5.00. The number of shares of Common Stock to be received upon a conversion will be based on a value of $0.20 per share or the value of the Common Stock at the time of conversion, whichever is less. That value will be based on the average closing bid price of the Common Stock for each of the ten (10) consecutive trading days immediately prior to the date of conversion. The Company also announces that each Preferred Shareholder shall also be granted Warrants to purchase up to ten (10) common shares of Megola, Inc. Stock at a price of $0.45 for every one (1) Series A Convertible Preferred Stock held. To qualify for and to exercise these Warrants the Shareholder must still hold the Series 'A' Preferred Shares and must exercise the Warrant within a 24-month period. The holders of Series A Convertible Preferred Stock shall have one hundred (100) votes for each full share Series A Convertible Preferred Stock.

On February 19, 2009 Megola provided a Corporate Update with a review of 2008 and an outline of what is to come for 2009.

To properly tender Common Stock, the Transfer Agent must receive, prior to the expiration date, either:

(i) A timely confirmation of book-entry transfer of such common stock and a properly completed letter of transmittal according to the procedure for book-entry transfer described in this offering circular; or

(ii) An agent's message through ATOP of DTC.

If you hold the Common Stock in "Street Name" (you physically hold the common stock certificate in your name), then tender your certificate(s) by sending directly to the transfer agent. You must include a return postage payment (US check or Money Order) made out to Pacific Stock Transfer in USD for $30 for USA residents, $45 for Canadian residents and $65 for other internationals. In lieu of a check or money order you may provide a Courier Account Number for the return shipping costs.

With your certificate(s), send all executed documents that you will be receiving from Pacific Stock Transfer Company OR documents you can download from the Company's website which will be made available by 4 p.m. EDT, Friday, April 24, 2009.

(iii) Sign the back of your certificate as the seller.

Pacific Stock Transfer Company will handle the ensuing paperwork and will send your voting Series 'A' Convertible Preferred stock within thirty (30) days of the receipt of your letter and your signed certificate.

Any shareholder that wishes to participate in this common to Series 'A' Preferred Stock conversion program please:

Send your common stock certificate via certified mail or courier to:

Pacific Stock Transfer Company
500 E Warm Springs Rd Suite 240
Las Vegas, NV, 89119
(702) 361-3033

Shareholders and investors are strongly cautioned against placing undue reliance on information set forth in these communications in making any investment decisions concerning our securities.

For more detailed information on this exchange program, please visit Megola's website at

The matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks are detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission including the company's Annual Report, Quarterly Reports and other periodic filings. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

Contact Information

  • Contact:
    Megola Inc.
    Daniel Gardner
    1 888 558 6389 x 25 (M-F 9am-4pm EDT)
    1 519 336 0628 x 25 (M-F 9am-4pm EDT)