Competition


The manufacturing and marketing of hydroponics plant growing equipmentis very
competitive and there can be no assurance that we will be successful in
generating significant revenue from our operations. We have conducted minimal
internal research on the hydroponics retail industry and, although limited
information is available concerning the industry, we were able to identify at
least 11 competitors in Canada and USA who manufacture and market hydroponics
products similar to ours. These competitors also produce controlled environment
hydroponics plant growing equipment and use promotional and marketing strategies
similar to us. Their products, like ours, are marketed, to a number of retail
outlets (nurseries, garden shops, specialty hydroponics outlets) and end users
in Canada and United States through their websites and by advertising in
industry related publications. We are not aware of the total number of
manufacturers, distributors and retailers of similar types of hydroponics
equipment in Canada and the United States. We will also compete with a variety
of retail outlets (hardware stores, nurseries, garden equipment suppliers,
plumbers' suppliers, greenhouses suppliers, lighting outlets, indoor plant
suppliers) and specialty hydroponics retailers who offer end users with a range
of parts and accessories to build a variety of do-it-yourself hydroponics
equipment and with self contained and ready to operate hydroponics equipment
units. Furthermore, we do not possess information relating to the total number
of controlled environment hydroponics equipment units manufactured and marketed
in Canada and United States. The lack of this information will make it difficult
for us to assess, identify and penetrate new markets.


Competitive advantage


We do not have at our disposal the vast material and financial resources to
undertake mass promotional and marketing campaigns. Our strategy, therefore,
will be to focus on serving our established retail outlets and to market our
hydroponics units directly to the end users through their places of operation.
Over the last three years, our hydroponics equipment has become a
well-recognized product within the hydroponics retail industry for its compact
size, efficiency and reliability. Our on-line technical assistance has been well
accepted by end users and the retail outlets that we serve. Other competitive
advantages that we offer to our clients are: (a) timely manufacturing and
delivery of our equipment which is delivered within 15 days of purchase order,


(b) one-year unlimited warranty on all the electrical components of our
hydroponics units with guarantee of no-cost replacement, (c) all the electrical
components in our equipment are CSA and UL approved making our equipment users
friendly and an insurance compliant appliance, similar to a fridge or stove, (d)
we offer three individual, turn-key, controlled environment hydroponics
equipment models each designed to meet different requirements of any end user,
and (e) the water reservoir in our equipment is located outside the plant
growing chamber eliminating water vapors created by heat inside the chambers
that would affect the controlled temperature and create root rot. Assuring
timely production and delivery of our hydroponics equipment and offering
personalized customer service to both the retail outlets and the end users that
we serve provides an arena for the future success of our products. Although we
do not have any formal contracts with the retail outlets that purchase and
resell our hydroponics units, due to our personalized, prompt and professional
service, we have been able to maintain their loyalty.


We are aware of other manufacturers of controlled environment hydroponics
equipment in Canada and the United States. Nonetheless, we have been able to
establish our products within the hydroponics retail industry. Our chief
competitive threat, therefore, would be from existing and potential new
hydroponics equipment manufacturers.



Website




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We currently own two websites and domain names www.powergrowcanada.com and
www.powergrowusa.com . These two websites are complete with detailed corporate
and product information. Our three hydroponics plant growing equipment models,
along with the parts, accessories and nutrient solutions that we market, are
listed on the websites for easy access to potential purchasers. On-line
technical support is provided to people who may already own our equipment or who
may want to educate themselves on the hydroponics technology with the view of
purchasing our equipment or learn about the technology and the hydroponics
components to build their own and to learn about the needed nutrient solutions
which will be required to hydroponically grow vegetation. On-line credit is also
available for people who decide to purchase our products while visiting our
sites. In addition, directly through our websites, we promote retail locations
that market our hydroponics equipment to end users creating inner industry
relationships and dealership network's loyalty.



Compliance with Government Regulation



The production and marketing of hydroponics equipment and parts is not regulated
in Canada and the USA. However, some Canadian legislators are calling for
legislation, similar to that of Australia, to regulate the commercial and retail
hydroponics industries. The legislation would establish guidelines and policies
for the manufacturing, marketing and operation of hydroponics plant growing
equipment both in the commercial production and distribution of hydroponically
grown vegetation and in the manufacturing and marketing of hydroponics
equipment, parts and nutrient solutions. New laws and regulations may impact our
ability to manufacture and market our hydroponics plant growing equipment,
parts, accessories and nutrient solutions and to generate revenue in the future.
However, we are not aware of any pending or contemplated laws or regulations in
Canada or the USA that would have an impact on our business.