SOURCE: Megola Inc.

Megola Inc.

January 04, 2011 16:00 ET

Megola Inc. Pays Back Their Two Outstanding Convertible Debenture Loans to Tangiers Investors, LP

POINT EDWARD, ON--(Marketwire - January 4, 2011) - Megola Inc. (OTCBB: MGON) is pleased to announce it has paid back their two outstanding convertible debenture loans to Tangiers Investors, LP which eliminates any potential stock conversion for these outstanding amounts.

"While it was necessary to obtain these debentures on a short term basis, it was always the company's intention to repay the notes prior to their conversion to common shares, which would have occurred at a price no higher than $0.01 per share resulting in the issuance of no less than 4.5 million shares from treasury," stated Joel Gardner, CEO. "It is critical that we make every effort to put in place the necessary framework that will provide share price appreciation over the longer term that will benefit both us as a company and our long-term shareholders." 

About Debentures

On July 16, 2010, Megola was issued $20,000 as proceeds from a 9% Convertible Debenture issued to Tangiers Investors, LP (the "Holder"). The loan bears a rate of interest of 9% per annum and is payable on April 16, 2011 or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder (the "Maturity Date"), and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 9% per annum, payable on the Maturity Date, unless the Debenture is converted to shares of common stock in accordance with the terms and conditions herein. The holder of the note has the right to convert the note into common stock of the Company at a price of $0.01 per share of common stock or a price of seventy percent (70%) of the average of the two lowest volume weighted average prices ("VWAPs"), determined on the then current trading market for the Company's common stock, for ten (10) trading days prior to conversion (the "Set Price"), at the option of the Holder, in whole at any time and from time to time. 

On October 19, 2010, a similar arrangement was entered into whereby Megola was issued $25,000 as proceeds from a 9% Convertible Debenture issued to Tangiers Investors, LP (the "Holder). The loan bears a rate of interest of 9% per annum and is payable on July 19, 2011 or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder (the "Maturity Date"), and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 9% per annum, payable on the Maturity Date, unless the Debenture is converted to shares of common stock in accordance with the terms and conditions herein.. The holder of the note has the right to convert the note into common stock of the Company at a price of $0.01 per share of common stock or a price of seventy percent (70%) of the average of the two lowest volume weighted average prices ("VWAPs"), determined on the then current trading market for the Company's common stock, for ten (10) trading days prior to conversion (the "Set Price"), at the option of the Holder, in whole at any time and from time to time. 

About Tangiers Investors, LP

Tangiers Investors, LP is a Southern California based asset manager that raises, invests, and manages alternative investment funds. The objective of Tangiers Investors, LP is to provide the best possible risk-return tradeoff by making direct investments into foreign and domestic private and public micro-cap companies. This is done through the acquisition of stock, convertible debt, warrants, and other instruments from target companies at a substantial discount. Tangiers Investors, LP will play a significant role in the formation of liquidity events for its private investments, assisting companies in the alternative public offering market through a variety of services.

For more info on Megola Inc., please visit www.megola.com

As of October 31, 2010, the Common Share structure for Megola is as follows:

Authorized: 200,000,000
Outstanding:   27,075,755
   
   

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.

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