SOURCE: Megola Inc.

Megola Inc.

February 19, 2009 08:30 ET

Megola Inc. Provides Corporate Update

POINT EDWARD, ON--(Marketwire - February 19, 2009) - Megola Inc. (PINKSHEETS: MGOA) is pleased to provide shareholders with the following progress report in order to update financial filings, highlight the achievements and milestones recorded in calendar year 2008, and provide management's outlook for calendar year 2009.


With the recent filing of 2007's year end financials, as well as first quarter 2008 just filed, Megola is well on its way to completing its remaining outstanding financial reports and beginning the process of re-establishing MGOA on the OTCBB.

"A major hurdle has been overcome in getting our 2007 financial statements filed as our new accountants/auditors had to review all past financial filings. We are confident that the balance of our financials will be brought current in a timely manner as we work diligently with our accountants/auditors to get the financials back to compliant status," states Joel Gardner, CEO, Megola Inc.

Megola's efforts in 2008 to set up strong collaborative relationships with distribution groups and product manufacturers have been successful and it expects to have strong sales results in the second half of this fiscal year, primarily from the Hartindo product line. "We are still strongly optimistic that, in time, our shareholders patience will be well rewarded," echoed Darryl Germain, recently appointed COO for Megola.


In 2007, Megola announced that it had acquired the exclusive North American manufacturing and Canadian distribution rights to the Hartindo product line, some of the most technologically advanced and environmentally-friendly fire inhibitor and fire suppression products in the world. With the infinite possibilities brought on through the acquisition of the Hartindo line, Megola abruptly changed its focus from environmental water and air treatment technology to a very planned and deliberate introduction of these revolutionary fire safety products.

In February 2008, Megola participated in a demonstration of the Titan 21 Fire Blanket for the Windsor Fire and Rescue Service in Windsor, Ontario. In addition, preliminary fabric testing results indicated that Hartindo AF21 met the requirements for fabric used in the uniforms of the Canadian Armed Forces. Lastly, and perhaps most significantly, BluWood Plus, which incorporates AF21 in its formula, received several Class A ratings for its surface burning characteristics on various wood-based building products, as per the ASTM E-84 test method. These results were instrumental in solidifying Megola's partnership with the makers of BluWood, WoodSmart Solutions, Inc.

In May of 2008, Megola announced that Hartindo AF21 would be used with BluWood in construction of the Florida Showcase Green EnviroHome, promoted as the "Greenest House in the World" at the Green Earth Expo 2008. It was also announced in May of '08 that the Bluwood Plus formula would be used to build a new home in California that was replacing one of the more than 1500 homes lost to the California wildfires of 2007.

In August of 2008, Megola moved its location due to the need for a larger facility and increased services to fulfill its role in manufacturing the Hartindo line of products. The move also expanded the office space necessary to accommodate the planned expansion of the management team. In addition, the new location provides direct access to a local shipping and warehousing company, which is located in the same building complex. Joel Gardner, President and CEO of Megola Inc. stated, "With the advent of the Hartindo line of anti-fire products, it was essential that Megola obtain a site with the requisite manufacturing, warehousing and shipping facilities."

Megola also announced the hiring of a Logistics Manager, Don McEwen, to be responsible for coordinating all production facility logistics -- from raw product acquisition, to manufacturing, to packaging and distribution to customers.


In order to obtain the required product approvals and certifications in North America, a series of tests that comply with North American standards continued throughout 2008, and are ongoing in 2009 as Megola explores the myriad of opportunities that flow from the potential of the Hartindo product line.

In 2008, Megola, in cooperation with Woodsmart Solutions, obtained Class A ratings following ASTM E-84 Surface Burning tests at independent laboratories for various species of lumber and wood products treated with their combined product, BluWood Plus. Megola continues to work closely with Woodsmart to identify other opportunities for collaboration and to obtain similar product ratings that meet the needs of their licensees and prospective customers.

In 2008, Hartindo AF31, a multi-purpose, water-based, non-toxic and non-corrosive fire extinguishing and fire inhibiting agent, underwent toxicity tests to evaluate acute eye irritation, acute dermal irritation, acute oral toxicity and acute dermal toxicity. Results concluded that Hartindo AF31 is both non-toxic and non-irritating. These positive results followed aquatic toxicity tests performed in 2007 that identified AF31 as non-harmful to aquatic life.


In October, Megola announced the signing of a multimillion dollar Agreement with WoodSmart Solutions, Inc. covering the sale, distribution and use of Hartindo AF21 Fire Inhibitor by WoodSmart in the wood building products industry across North America. The agreement also stipulates minimum purchase requirements on behalf of Woodsmart of 1.65 million gallons of concentrated Hartindo AF21 over the next 3 years, providing Megola with firm sales targets and production requirements.

In November, Megola announced the selection of Regal Capital Partners, LLC to direct its shareholder, marketing, and public relations campaigns. Megola also issued to Regal an aggregate 3,000,000 restricted common stock purchase warrants to be exercised within a one year period. "The time has come to be aggressively proactive in disseminating our business plans and environmental technology initiatives to the retail market to attract new investors. Regal brings the required expertise in this area that allows us to focus on our core business," states Dan Gardner, General Manager of Megola.

In January 2009, as further testament to Megola's ability to create strong partnerships with sustainable-minded companies, Megola announced a Distributorship and Sales Agency and Royalty Agreement with Vulcan Technologies, LLC worth over $50 million over the next ten years for the exclusive and co-exclusive rights to distribute the Hartindo line of Anti-Fire Products (Product) to the Rail Industry. Vulcan demonstrated their commitment and belief in the future of Megola through the advance of $750,000 in consideration of future royalty payments.


While 2008 clearly demonstrated our focus on getting the Hartindo line of products to market, Megola continued to support its water and air purification divisions. In 2009 and beyond, the Hartindo product line will continue to be the main focus, but our commitment to service our network of distributors of ScaleGuard and AirGuardian systems will remain a priority, while we look for opportunities to expand our markets in these areas.

Most recently, Megola announced the addition of new Chief Operating Officer Darryl Germain and new Chief Financial Officer Craig Wagenschutz to the Senior Management team. Understanding that strong management is critical to an organization's long-term success, Megola CEO Joel Gardner looked for executive level team players that would fill these critical roles. "Both individuals bring a vast inventory of skills and experience to their respective roles and together they will help provide the necessary leadership and business acumen required to take our company to the next level as we prepare for tremendous growth through the distribution of all our product lines."

Megola remains committed to growing the company with environmentally-friendly and technologically-advanced products and solutions. The Company believes that long-term growth and profitability will be accomplished through partnership with like-minded companies in the form of both end-users and distributors and will look to grow and expand relationships with current partners, such as WoodSmart Solutions, Inc., Logistik Unicorp Inc./CTT Group Inc., Hazmat4U/Hazmat1, Janus Products Corp. and Vulcan Technologies, and increase our exposure to unexplored vertical markets through other distributors and agents across North America.

Joel Gardner, President & CEO of Megola, concludes, "Megola continues to focus on building a foundation for growth and success. With the acquisition of the Hartindo line of products, our potential is unlimited. Our board and management continue to lay the groundwork for strategically getting these revolutionary products to market while meeting or exceeding all environmental and performance standards along the way. Management has also taken the necessary measures required to ensure that we will be able to accommodate the anticipated demand volume. We would like to acknowledge our shareholders and their continued patience and look forward to an exciting and prosperous year in 2009."

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.

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