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Megola's
ScaleGuard technology eliminates the build-up of scale caused by hard water in all types
of applications in a manner that is both cost effective and environmentally safe
Electronic Tech
Water
(MGOA-OTC)
Megola Inc.
446 Lyndock St. –Ste. 102
Corunna, ON, N0N 102
Phone: 888-558-6389
Joel Gardner
President, Director and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
December 30, 2004
BIO:
Joel Gardner - Chief Executive Officer
Joel Gardner is a seasoned entrepreneur who knows a good idea when he sees it. He has
built his career developing great ideas and seeking out industry-changing solutions that
hold tremendous, unrealized potential and then taking them to market. That is exactly why
he formed Megola and why he chose to focus all of his efforts on making Megola the major
success he knows it can be.
Joel started out his career as
a professional hockey player, going straight from university hockey – he received a
BA from Colgate University, where he studied Education and Geology – to playing for
ten years in Canada, USA and Europe. Still, he was not content to be just an athlete. In
1995, he started and served as President of CartAds, a company that put advertisements on
shopping carts. Then in 1997, he applied the expertise he acquired with CartAds at another
marketing venture, COA, which sold advertising on outdoor benches. Also, in his time off
the ice the following year, he invented and produced a golf rules trivia game, which is
still being sold in pro shops. That same year, he utilized the contacts he made and the
reputation he had built while in Germany to become Vice President and a partner in
Aqua-Cristall Limited, a physical water treatment company. Aqua-Cristall became the first
distributor of the ScaleGuard product line.
In 2000, Joel formed Megola,
Inc. to distribute the ScaleGuard products as well as a number of other air and water
treatment solutions throughout North America. As President and CEO, he has led the company’s
growth and expansion into several divisions over the past four years. Under his
leadership, Megola has secured the distribution rights to a number of other product lines
and proprietary technologies, grown its client base, consistently increased revenue and
acquired a wealth of industry-specific expertise that has allowed it to launch a dynamic
new total solutions business model in 2004. Joel also led the company as it made the
transition from a private entity to a publicly traded corporation.
Company Profile:
Megola Inc., which went public last year, is in the process of greatly expanding both the
scope of its offerings and its reach throughout the global marketplace. The company
announced earlier this year that it has launched a new business model, which it believes
could significantly boost its revenues. Under this new model, the company has begun
partnering with clients to provide "tailor-made" solutions to its clients'
air/water-quality problems. The company also entered into an agreement to cross-promote
its products with Chinese market leader, Dalian Bingshan H2O3 in Asia. This agreement is
already leading to increased revenues in new overseas markets.
Megola's ScaleGuard technology eliminates the
build-up of scale caused by hard water in all types of applications in a manner that is
both extremely cost effective and environmentally safe. Unlike traditional water softening
technology that may require the introduction of salts, corrosive chemicals or other
additives to hard water, the ScaleGuard unit uses a revolutionary electromagnetic
technology to both prevent the ongoing build-up of scale and eliminate historical scale
build-up in water delivery systems and machinery.
Over the past year, Megola has acquired the exclusive
rights or distribution rights to a number of products associated with biological control,
wastewater treatment and air purification to augment their physical water treatment
products and further their attempts at becoming a complete environmental solutions
company.
CEOCFOinterviews: Mr.
Gardner, will you tell us how you became involved with Megola Inc. and what your company
provides?
Mr. Gardner: “Five years ago when I was playing
professional hockey, I saw this product in my building that replaced conventional
softeners and hard water treatment. We brought it back to North America thinking it would
be a huge benefit here. We went through some trials, but it is now going very well and we
have expanded into the residential, commercial, industrial and agricultural markets. Our
product, Scale Guard, is classified as physical water treatment. Rather than using a
conventional ion exchange or salt softener to remove the hardness, Scale Guard alters the
scale forming properties of hard water so that you have the same benefits of softened
water without using salt or backwashing, which wastes a lot of water back into the
environment. This is a zero maintenance product that is imported from Germany.”
CEOCFOinterviews: Will
you tell us about the industry in general?
Mr. Gardner: “There has been a lot of skepticism in the
past about physical water treatments such as permanent magnets and other devices that
really did not work as well, or well enough to eliminate the competition. During the last
five years we have broken down those barriers and we have had engineers and big companies
using our technology and our equipment. We are now in a number of markets, but we started
in the commercial business doing restaurants and apartment buildings. We have done
extremely well and have proven that our technology itself is top-of-the-line.”
CEOCFOinterviews: Is
this a one-time sale?
Mr. Gardner: “With the ScaleGuard products, there is no
residual at all as there is zero maintenance required. Conventionally we put these on a
main water line or a recirculation loop depending on what the application is. It is
non-invasive as there is no cutting of the pipes and it is all programmed for the size of
your pipes or your water tanks.”
CEOCFOinterviews: How do
you reach your potential customers?
Mr. Gardner: “We have been going to trade shows and
doing mailings. We set up distribution networks so that a company that wants to pick up
our product line can use their client base to sell it. We have expanded into export; China
is a huge market now for us. We are selling machines to the largest refrigeration company
in Asia and we have some refrigeration groups that we are currently working with in North
America.”
CEOCFOinterviews: Are
there several variations of what you sell?
Mr. Gardner: “It all stems on the size of the pipe and
the water flow. For residential applications, we treat water lines up to one inch in
diameter and as we get to bigger buildings, there are often two, three and four inch
lines. In short, we have a vast array of machines that can treat water lines even up to
ten inches in diameter. We also have to take into account different variables to determine
what machine is right for each installation.”
CEOCFOinterviews: How
will your product help cut down energy costs?
Mr. Gardner: “Unlike conventional water softeners or
chemicals, we remove existing scale, which has positive implications when we are dealing
with equipment such as fouled heat exchangers or cooling towers. Essentially it
increases the efficiency of the heating and cooling system and that translates into huge
savings.”
CEOCFOinterviews: Would
an individual homeowner use your product?
Mr. Gardner: “We targeted the residential market when we
first brought our product over from Germany but it was expensive and essentially priced
out of the market. Now we have a new residential machine that is quite affordable. It is
comparable in price to a salt softener, but has no maintenance requirements and does not
waste water like salt softeners. We have had very positive feedback in this market.”
CEOCFOinterviews: What
do you need to do to continue to increase sales?
Mr. Gardner: “That is one reason we went public. We have
now been a year trading on the OTC: BB under the symbol of MGOA. We have put the funding
in place and we have increased our employees and have had more people trained. We are out
doing bigger trade shows and targeting various markets from California to Florida up to
New Brunswick, and Nova Scotia in Canada. All of our distributors already have the
knowledge and background and their employees are already schooled in training techniques.
We do two or three day seminars and train their staff to market our products into their
business. I just got back from China recently and trained twenty more of their staff
there.”
CEOCFOinterviews: Will
you tell us about the financial condition of the company?
Mr. Gardner: “We are doing extremely well. With the
company going public and getting the funding in place, we will definitely be showing
better financials. Going public took a lot of time, but we are at the stage now that we
have some good employees in place, and we expect to be doing great now that we have the
money behind us.”
CEOCFOinterviews: Do you
have to keep an inventory?
Mr. Gardner: “We have a good base of inventory here in
Canada, which we use in North America. The Germans have about a four-week delivery time to
us and we send rates to the Chinese from Germany, so we do not have to hold the Chinese
inventory. It is a quick turn around; we expect three or four weeks for delivery.”
CEOCFOinterviews: Will
you tell us about your other divisions?
Mr. Gardner: “Dealing with scale problems in the various
markets showed us the need for more comprehensive treatment strategies, so we started
forming some alliances with other companies and acquiring rights to certain products to
form one complete environmental package. We now import ozone machines from China and have
formed some alliances with some North American companies to deal with biological control
and wastewater treatment. We have also have expanded into air purification using ozone and
different types of UV bulbs. We have come to be a solution provider rather than just
selling our Scale Guard products. We are trying to diversify enough to solve our customers’
one, two or three problems rather than just focusing on their hardwater problem.”
CEOCFOinterviews: There
are so many different products, how do you get people to notice your product?
Mr. Gardner: “Our motto has always been “seeing is
believing.” We have a number of engineers and big companies that have used our
product. We are not afraid to say, “call this engineer and he will tell you”. We
are not going to do a scripted sales pitch on you. That is where we have set
ourselves apart from our competitors. They do not have these engineers and reputable
companies that can tell you what they have seen. We have a good reputation with our
customers, and they are not afraid to back our claims. That makes a huge difference.”
CEOCFOinterviews: Why
should potential investors be interested and what should they realize about the company
that they might not realize at first?
Mr. Gardner: “I think when you first look at investing
in our company you are going to say, “Gee, they do not make a lot of sales”. At
the moment, we are not looking at generating sales within our organization itself, as we
are looking to set-up distributors. It takes about six months to set one of these groups
up so that they become self-sufficient. Also, we have taken several products within our
organization and improved. We have hired new people. We are going to continue
to grow and we are well positioned to take advantage of new and proposed environmental
regulations. Energy costs are increasing and all of our products are environmentally
friendly, so we have a large target market. If you invest, you can grow with the company.
It has only been one year since going public and the future is wide open for us.”
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