-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HxUMhqcRiLwOnt5U3bjHj3l5apyXIMsXKllrAq7FA//iLQ4mXQxzsSTCjKUjhu5D 96lFWa7IkpuxpVhQGC60yA== 0001139020-04-000104.txt : 20040414 0001139020-04-000104.hdr.sgml : 20040414 20040414165345 ACCESSION NUMBER: 0001139020-04-000104 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031126 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEGOLA INC CENTRAL INDEX KEY: 0001144392 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 880492605 FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-49815 FILM NUMBER: 04733597 BUSINESS ADDRESS: STREET 1: 446 LYNDOCK STREET 2: SUITE 102 CITY: CORUNNA STATE: A6 ZIP: N0N 1G0 BUSINESS PHONE: 519-481-0628 FORMER COMPANY: FORMER CONFORMED NAME: SUPERIORCLEAN INC DATE OF NAME CHANGE: 20010706 8-K/A 1 mgla_8ka.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 26, 2003 MEGOLA, INC. ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Nevada 88-0492605 -------------------- ------------------ (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) SEC File Number: 000-49815 446 Lyndock St., Suite 102 N0N 1G0 Corunna, ON - ----------------------------------------- ----------------- (Address of Principal (Zip Code) Executive Offices) Registrant's telephone number, including area code: Tel: (519) 481-0628 SuperiorClean, Inc. ------------------------ (Former Name or Former Address, if Changed Since Last Report) 1183 S. Huron Street, Denver, Colorado 80223 ------------------------------- ------------ (Address of Principal (Zip Code) Executive Offices) -1- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders Megola, Inc. Corunna, Ontario, Canada We have audited the accompanying balance sheet of Megola, Inc. as of July 31, 2003, and the related statements of operations, stockholders' deficit and cash flows for each of the two years then ended. These financial statements are the responsibility of Megola's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Megola, Inc. as of July 31, 2003 and the results of its operations and its cash flows for each of the two years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that Megola, Inc. will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, Megola has suffered recurring losses from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Malone & Bailey, PLLC www.malone-bailey.com Houston, Texas March 8, 2004 -1- MEGOLA, INC. BALANCE SHEET July 31, 2003 ASSETS Current Assets Cash $ 2,961 Accounts receivable, net 13,819 Inventory 43,290 Deposit on reverse acquisition 196,566 Other 2,912 --------- Total Current Assets 259,548 --------- Vehicle and demonstration equipment, net of accumulated depreciation of $12,097 14,671 --------- $ 274,219 ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Bank line of credit $ 32,189 Current portion of installment note payable 5,563 Accounts payable 2,075 Accrued expenses 38,864 Loans from investors 228,885 --------- Total Current Liabilities 307,576 Long-term portion of installment note payable 7,647 --------- Total Liabilities 315,223 --------- Stockholders' Deficit Preferred stock, no par value, unlimited shares authorized, 125,000 shares issued and outstanding 81,289 Common stock, no par value, unlimited shares authorized, 100 shares issued and outstanding 154,953 Accumulated deficit (273,841) Other comprehensive income: Equity adjustment on foreign currency translation (3,405) --------- Total Stockholders' Deficit ( 41,004) --------- $ 274,219 ========= See accompanying summary of accounting policies and notes to financial statements. -2- MEGOLA, INC. STATEMENTS OF OPERATIONS Years Ended July 31, 2003 and 2002 2003 2002 --------- --------- Revenue $ 157,472 $ 158,780 Cost of sales 72,061 43,876 Selling 18,787 24,294 General & administrative 157,736 146,322 Depreciation 5,122 5,125 Interest 1,366 --------- --------- Total expenses 255,072 219,617 --------- --------- NET LOSS $( 97,600) $( 60,837) ========= ========= Basic and diluted loss per share $(976.00) $(608.37) Weighted average shares outstanding 100 100 See accompanying summary of accounting policies and notes to financial statements. -3- MEGOLA, INC. STATEMENT OF STOCKHOLDERS' DEFICIT Years Ended July 31, 2003 and 2002 Preferred Stock Common Stock Shares Amount Shares Amount ------- ------- ------- ------ Balances, July 31, 2001 100 $121,787 Stock issued for cash 105,000 $68,673 Net loss Foreign currency Other comprehensive loss ------- ------- ------- ------ Balances, July 31, 2002 105,000 68,673 100 121,787 Stock repurchased (10) (32,036) Stock issued for cash - Common 10 65,202 - Preferred 20,000 12,616 Net loss Foreign currency Other comprehensive loss ------- ------- ------- ------ Balances, July 31, 2003 125,000 $ 81,289 100 $154,953 See accompanying summary of accounting policies and notes to financial statements. -4- MEGOLA, INC. STATEMENT OF STOCKHOLDERS' DEFICIT Years Ended July 31, 2003 and 2002 Other Comprehensive Income Accumulated (Loss) Deficit Totals ------- --------- -------- Balances, July 31, 2001 $(4,270) $(117,536) $(19) Stock issued for cash Net loss (58,705) (58,705) Foreign currency 1,120 1,120 -------- Other comprehensive loss (57,585) ------- --------- -------- Balances, July 31, 2002 (3,150) (176,241) 11,069 Stock repurchased (32,036) Stock issued for cash - Common 65,202 - Preferred 12,616 Net loss (97,600) (97,600) Foreign currency (255) (255) -------- Other comprehensive loss (97,855) ------- --------- -------- Balances, July 31, 2003 $(3,405) $(273,841) $(41,004) ======= ========= ======== See accompanying summary of accounting policies and notes to financial statements. -5- MEGOLA, INC. STATEMENTS OF CASH FLOW Years Ended July 31, 2003 and 2002 2003 2002 --------- --------- Cash Flows Used in Operating Activities Net loss $( 97,600) $( 58,705) Adjustments to reconcile net income to net cash used in operating activities: Depreciation 5,122 5,125 Changes in: Accounts receivable 1,446 ( 14,393) Inventory (3,642) ( 20,295) Deposit on reverse acquisition (184,044) Other current assets (1,186) ( 251) Accounts payable (1,314) ( 198) Accrued expenses 14,077 13,545 --------- --------- Net Cash Used in Operating Activities (267,141) ( 75,172) --------- --------- Cash Flows Provided by Financing Activities Net change in bank line of credit 43 10,999 Loans from investors 180,897 Proceeds from sales of preferred stock 12,616 70,789 Proceeds from sales of common stock 65,202 Payments on installment note payable ( 2,532) --------- --------- 256,226 81,788 --------- --------- Effect of Exchange Rate Changes on Cash 7,475 ( 814) --------- --------- Net increase (decrease) in cash ( 3,440) 5,802 Cash at beginning of year 6,401 599 --------- --------- Cash at end of year $ 2,961 $ 6,401 ========= ========= Cash paid during the year for: Interest $ 1,366 $ 0 Income taxes 0 0 Non-cash transactions Purchase of automobile financed by dealer $ 14,900 Repurchase of common stock not yet paid for 32,286 See accompanying summary of accounting policies and notes to financial statements. -6- MEGOLA, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF ACCOUNTING POLICIES Megola, Inc. was incorporated in Ontario, Canada on August 28, 2000 as Corporation No. 1375595. It was renamed Megola, Inc. on December 21, 2001. Megola was formed to sell physical water treatment devices to commercial end-users in both the United States and Canada under a license granted by the German manufacturer, Megola GmbH. Initial operations and sales began in October 2000. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Cash Equivalents. Highly liquid investments with original maturities of three months or less are considered cash equivalents. Other comprehensive income represents changes in the value of the Canadian dollar relative to the U.S. dollar. As of each balance sheet date, Megola translates its assets and liabilities into U.S. dollars at the exchange rate in effect on that date. There are no hedging contracts. Revenues and expenses during each period are translated at the average exchange rates of those periods. Equity accounts are translated at historical amounts. Translation adjustments are deferred in the equity account, Other Comprehensive Income (Loss), a separate component of Stockholders' Deficit. Revenue Recognition. Revenue is recognized when the earning process is complete and the risks and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon delivery of the finished products. For 2003 and 2002, there were no refunds or warranty claims. Megola accepts returns for a 30-day period after the sale. Megola offers no independent warranty and refers any warranty claims to the manufacturer for products it sells. An allowance for doubtful accounts is provided based on credit experience. Megola had bad debts of $42,860 and $17,162 for fiscal 2003 and 2002, respectively. As of July 31, 2003, a $0 allowance is provided. Long-lived Assets. Property and equipment are stated on the basis of historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the 3-year estimated useful lives of the assets. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. No impairment losses have been recorded since inception. Income Taxes. U.S. and foreign income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes, and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. Stock Options and Warrants. Megola accounts for stock-based compensation to employees under the intrinsic value method. Under this method, Megola recognizes no compensation expense for stock options granted when the number of underlying shares is known and exercise price of the option is greater than or equal to the fair market value of the stock on the date of grant. Megola accounts for stock-based compensation to non-employees under the fair value method using the Black-Scholes option- pricing modeling method. There are no options or warrants outstanding as of July 31, 2003. -7- Earnings per Share. Basic earnings per share equals net earnings divided by weighted average shares outstanding during the year. Diluted earnings per share include the impact of common stock equivalents using the treasury stock method when the effect is dilutive. Recent Accounting Pronouncements. Megola does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow. NOTE 2 - GOING CONCERN As shown in the accompanying financial statements, Megola incurred recurring net losses chargeable to common shareholders of $97,600 and $60,817 in fiscal 2003 and 2002, respectively, and has an accumulated deficit of $273,840 as of July 31, 2003. These conditions create an uncertainty as to Megola's ability to continue as a going concern. Management is trying to raise additional capital through sales of stock. The financial statements do not include any adjustments that might be necessary if Megola is unable to continue as a going concern. NOTE 3 - BANK LINE OF CREDIT The Bank of Montreal granted a $32,111 line of credit to Megola that is used by overdrafting Megola's checking account at the bank. Interest is at bank prime + 1% and the loan is secured by substantially all Megola assets and the individual guarantees of two directors and a shareholder. As of July 31, 2003, the balance is $32,189. The line expires December 31, 2004. NOTE 4 - NOTE PAYABLE Megola purchased a used car from an auto dealer in October 30, 2002. The dealer financed the purchase in 36 equal monthly installments of $539, including interest at 8.45%. As of July 31, 2003, $6,053 was due in fiscal 2005 and $1,594 in fiscal 2006. NOTE 5 - INCOME TAXES Income taxes are not due since Megola has had losses since inception. Since inception, Megola has had about $270,000 in the U.S. dollar value of Canadian net operating losses, which expire in Canada in fiscal 2023. The components of deferred taxes are as follows: Deferred tax assets Net operating loss carryforwards $ 91,800 Less: valuation allowance ( 91,800) --------- Current net deferred tax assets $ 0 ========= -8- NOTE 6 - PREFERRED STOCK An unlimited number of preferred shares, no par value, are authorized. Shares pay a 15% cumulative dividend, and no dividends have been declared. All preferred shares were exchanged in the reorganization in November 2003 - see Note 10. NOTE 7 - COMMON STOCK During fiscal 2001, 10 shares were issued to the founder for $1 at inception in August 2000. In September 2000, 90 shares were issued to investors at $1,353 per share for cash, services, inventory and out-of-pocket expense reimbursements. During fiscal 2002, 105,000 shares of preferred stock were issued for $68,673 in cash. During fiscal 2003, 20,000 shares of preferred stock were issued for $12,616 in cash. Ten common shares were re-purchased from an investor for $32,036 and ten shares were sold to investors for $65,202 in cash. The stock re-purchase wasn't paid until after July 31, 2003. NOTE 8 - CONCENTRATIONS No customers accounted for as much as 10% of 2003 and 2002 sales. One vendor accounted for 100 percent of fiscal 2003 and 2002 cost of sales. NOTE 9 - COMMITMENTS Megola's office lease expires December 31, 2009. Minimum lease payments of $5,313 are due in the year ended July 31, 2004, and $12,750 are due in each of the years ended July 31, 2005 - 2009, with $5,313 due in the year ended July 31, 2010. NOTE 10 - SEGMENT REPORTING Megola sells in the U.S. and China as well as in Canada, and has two reportable geographic segments, with summary information as follows: United States International Combined ----------- ----------- --------- Year ended July 31, 2003 Revenues $ 5,099 $152,373 $157,472 Pretax loss 3,160 94,440 97,600 Depreciation 0 5,122 5,122 Interest expense 0 1,366 1,366 Total assets 0 274,219 274,219 Year ended July 31, 2002 Revenues 82,888 75,892 158,780 Pretax loss 12,250 48,587 60,837 Depreciation 0 5,125 5,125 Interest expense 0 0 0 Total assets 0 64,839 64,839 -9- NOTE 11 - SUBSEQUENT EVENTS On November 26, 2003, Megola was acquired by SuperiorClean, Inc. in a transaction accounted for as a reverse acquisition. Megola's shareholders were issued 13,389,591 SuperiorClean shares in exchange for 100% of the outstanding common and preferred stock of Megola, plus $250,000 in cash and $200,000 in notes payable. Two major shareholders of SuperiorClean and two other persons then signed consulting contracts for 1,250,000 common shares. Immediately after this transaction, SuperiorClean had 21,728,593 shares outstanding. The former owners of Megola now own 61.6% of the combined entity. Prior to the merger, SuperiorClean had no assets or operations. As of July 31, 2003, $196,566 had been paid by Megola towards this acquisition This amount is shown as a current asset at this date, and will be written off as an impairment expense in November 2003. On December 31, 2003, $391,985 in investor notes payable and $8,132 in accrued interest were exchanged for 4,035,956 common shares. -10- MEGOLA, INC. BALANCE SHEET As of October 31, 2003 (Unaudited) ASSETS Current Assets Cash $ 3,513 Accounts receivable, net of $0 allowance 8,326 Inventory 59,196 Other 4,789 Deposit on reverse acquisition 235,374 --------- Total Current Assets 311,198 Fixed assets, net of $23,086 accumulated depreciation 11,343 --------- $ 322,541 ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Bank overdraft $ 35,803 Current portion of installment note payable 6,453 Accounts payable 6,639 Accrued expenses 52,402 Notes payable 330,004 --------- Total Current Liabilities 431,301 Long-term portion of installment note payable 6,181 --------- 437,482 --------- Commitments Stockholders' Deficit Preferred stock, $.001 par, 5,000,000 shares authorized, no shares issued or outstanding Common stock, $.001 par value, 50,000,000 shares authorized, 13,389,591 shares issued and outstanding 13,390 Paid in capital 222,851 Accumulated deficit (342,734) Accumulated other comprehensive loss - foreign currency translation (8,448) --------- Total Stockholders' Deficit (114,941) --------- $ 322,541 ========= -11- MEGOLA, INC. STATEMENTS OF OPERATIONS For the Three Months Ended October 31, 2003 and 2002 (Unaudited) 2003 2002 --------- --------- Revenue $ 7,590 $ 39,080 Cost of sales 3,008 5,834 Selling 8,334 4,739 General & administrative 56,663 52,147 Depreciation 2,773 1,191 Interest 5,706 819 --------- --------- Total expenses 76,484 64,732 --------- --------- NET LOSS $(68,894) $(25,652) ========= ========= Basic and diluted loss per share $(.01) $(.00) Weighted average shares outstanding 13,389,591 13,389,591 -12- MEGOLA, INC. STATEMENTS OF CASH FLOW For the Three Months Ended October 31, 2003 and 2002 (Unaudited) 2003 2002 --------- --------- Cash Flows Used in Operating Activities Net loss $( 68,894) $( 25,652) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 2,773 1,191 Changes in: Accounts receivable 6,392 (1,538) Inventory ( 13,090) 11,621 Other current assets ( 1,687) (605) Accounts payable 4,429 872 Accrued expenses 11,009 4,135 --------- --------- Net Cash Used in Operating Activities ( 59,068) (9,976) --------- --------- Cash Flows Used in Investing Activities Deposit made toward cost of public shell ( 26,020) --------- Cash Flows From Financing Activities Loans from investors 124,230 Repurchase of shares from a shareholder ( 37,581) Payments on installment note payable ( 1,888) (Decrease) in bank overdraft 2,001 ( 1,723) --------- --------- 86,762 (1,723) --------- --------- Effect of Exchange Rate Changes on Cash ( 1,122) 7,479 --------- --------- Net increase (decrease) in cash 552 (4,220) Cash at beginning of period 2,961 6,401 --------- --------- Cash at end of period $ 3,513 $ 2,181 ========= ========= -13- MEGOLA, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited interim financial statements of Megola, Inc. ("Megola") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in Megola's latest annual report filed with the SEC on Form 8-K/A. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal year 2004, as reported in the 8-K/A, have been omitted. NOTE 2 - SUBSEQUENT EVENTS On November 26, 2003, Megola was acquired by SuperiorClean, Inc. in a transaction accounted for as a reverse acquisition. Megola's shareholders were issued 13,389,591 SuperiorClean shares in exchange for 100% of the outstanding common and preferred stock of Megola, plus $250,000 in cash and $200,000 in notes payable. Two major shareholders of SuperiorClean and two other persons then signed consulting contracts for 1,250,000 common shares. Immediately after this transaction, SuperiorClean had 21,728,593 shares outstanding. The former owners of Megola now own 61.6% of the combined entity. Prior to the merger, SuperiorClean had no assets or operations. As of July 31, 2003, $196,566 had been paid by Megola towards this acquisition This amount is shown as a current asset at this date, and will be written off as an impairment expense in November 2003. On December 31, 2003, $391,985 in investor notes payable and $8,132 in accrued interest were exchanged for 4,035,956 common shares. All shares outstanding as of October 31, 2003 have been restated to the SuperiorClean-issued equivalents. NOTE 3 - SEGMENT REPORTING Megola sells in the U.S. and China as well as in Canada, and has two reportable geographic segments, with summary information as follows: United States International Combined ----------- ----------- --------- Three Months ended October 31, 2003 Revenues $ 4,995 $ 2,595 $ 7,590 Net loss 3,000 65,894 68,894 Three Months ended October 31, 2002 Revenues 0 39,080 39,080 Net loss 0 25,652 25,652 -14- PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS The following pro forma financial statements has been derived from the financial statements of Megola, Inc. ("Megola") at July 31, 2003 and adjusts such information to give effect to its reverse acquisition by SuperiorClean, Inc. ("Superior"), as if the acquisition had occurred at their respective year-ends as shown. The pro forma financial statements are presented for informational purposes only and do not purport to be indicative of the financial condition that would have resulted if the acquisition had been consummated at either year-end. The pro forma financial statements should be read in conjunction with the notes thereto and each Company's consolidated financial statements and related notes thereto contained herein and in Megola's latest annual report filed with the SEC. Pro forma Consolidated Condensed Balance Sheet: 7/31/03 2/28/03 Megola Superior Adjustments Pro-Forma --------- --------- ------------ --------- Current Assets Cash $ 2,961 $ 2,961 Accounts receivable, net of allowance 13,819 13,819 Deposit on reverse merger 196,566 (2)(196,566) Other current assets 46,202 46,202 --------- --------- --------- Total Current Assets 259,548 62,982 Property and equipment, net 14,671 14,671 --------- --------- --------- $ 274,219 $ 0 $ 77,653 ========= ========= ========= Current Liabilities Accounts payable and accrued expenses 40,939 40,939 Note payable - related party 140,000 (1)(135,000) 275,000 Notes payable 242,095 242,095 Other 32,189 32,189 --------- --------- --------- Total Liabilities 315,223 140,000 590,223 --------- --------- --------- Preferred stock, no par, unlimited shares authorized, 125,000 issued and outstanding 81,288 (1) 81,288 Common stock, no par, unlimited shares authorized, 100 issued and outstanding 154,953 (1) 154,953 Common stock, $.001 par, 20,000,000 shares authorized, 8,176,500 shares outstanding 8,177 (1) (1,400) 26,966,091 shares outstanding (1) (17,389) 26,966 Paid in capital 295,898 (1) 86,623 209,275 Stock subscription receivable (140,000) (140,000) Accumulated Deficit (273,840) (304,075) (1)(304,075) (1) 275,000 (2) 196,566 (745,406) Other comprehensive income (3,405) (3,405) --------- --------- --------- (41,004) (140,000) (512,570) --------- --------- --------- $ 274,219 $ 0 $ 77,653 ========= ========= ========= -15- NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (1) The Closing Date of the Stock Purchase Agreement between Megola, Inc. (Megola) and SuperiorClean, Inc. (Superior) occurred November 26, 2003. On that date, 13,389,591 shares of Superior common stock were issued to Megola shareholders for all outstanding Megola preferred and common shares. Superior's $140,000 liability to related parties was offset against its stock subscription receivable, but the remaining unpaid agreed purchase price for the Superior shell of $275,000 was added and also impaired because Superior has no operations. (2) The deposit will be impaired because Superior has no operations. -16- SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Megola, Inc. -------------------------------- (Registrant) By: /s/ Joel Gardner -------------------- Joel Gardner, President In accordance with the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates stated: Signature Title Date ------------ --------- ---------- /s/ Joel Gardner President April 12, 2004 ---------------- Joel Gardner -17- -----END PRIVACY-ENHANCED MESSAGE-----