MAGNEGAS CORPORATION (NASDAQ:MNGA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On September 19, 2017, MagneGas Corporation (the “Company”) held a closing (the “Closing”) of a registered direct offering, in which the Company sold shares of Series E Convertible Preferred Stock (“Preferred Stock”) and Series E Convertible Preferred Warrants (“Preferred Warrants”) (collectively, the “Transaction Securities”) as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement dated as of September 15, 2017 (the “SPA”) for a total gross purchase price of up to $620,000 (the “Offering”) assuming full exercise of the Preferred Warrants. At the initial closing under the SPA, the Company issued to the investors a total of 36,765 shares of Preferred Stock at a purchase price of $1.36 per share, for gross proceeds of $50,000. The Company also issued to the investors the Preferred Warrants, which will be exercisable for a total of 419,117 shares of Preferred Stock at an exercise price of $1.36 per share. The Preferred Shares have an initial conversion price of $1.36 and will be initially convertible into an aggregate of 419,117 shares of common stock.
The Preferred Stock and the Preferred Warrants will each expire on December 31, 2019 if not converted or exercised, respectively, by such date.
The Offering was made to a prospectus supplement and accompanying base prospectus relating to the Company’s effective shelf registration statement on Form S-3 (File No. 333-207928).
The Offering was not underwritten and no placement agent was utilized.
As a condition to closing the Offering, Global Alpha, LLC (the “Majority Stockholder”), who owns approximately 99% of the Company’s outstanding voting power, executed a Voting Agreement with the Company. to the Voting Agreement, the Majority Stockholder agreed to vote in favor of the Company’s Offering and issuance of the Transaction Securities. The above description of the Voting Agreement does not purport to be complete and is qualified in its entirety by the full text of such Voting Agreement, which is incorporated herein and attached hereto as Exhibit 10.1.
The Company became a party to the SPA for the Offering, which was described in the Company’s Current Report on Form 8-K filed by the Company on September 15, 2017 (the “September 15 Form 8-K”) and specifically incorporated herein by reference. For a description of the terms and conditions of the SPA, see “Item 1.01 Entry into a Material Definitive Agreement” in the September 15 Form 8-K and Exhibit 10.1 of the September 15 Form 8-K which is incorporated herein by reference.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On September 18, 2017, in connection with the Offering, prior to the closing date of the transaction described in Item 1.01 of this Current Report on Form 8-K, the Company filed a Certificate of Designations of Series E Convertible Preferred Stock (the "Certificate of Designations") with the Secretary of State for the State of Delaware. The Certificate of Designations designated a new class of preferred stock as “Series E Convertible Preferred Stock” in the aggregate amount of 455,882 shares. The Series E Convertible Preferred Stock has a stated value of $1.36 per share of Series E Convertible Preferred Stock and an initial conversion price equal to $1.36. For a description of the rights, powers, and preferences of the Series E Convertible Preferred Stock see “Item 1.01 Entry into a Material Definitive Agreement” in the September 15 Form 8-K which is incorporated herein by reference.
A copy of the Certificate of Designations filed with the Secretary of State for the State of Delaware is attached hereto as Exhibit 3.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d)Exhibits.
MAGNEGAS CORP ExhibitEX-3.1 2 v475459_ex3-1.htm EXHIBIT 3.1 Exhibit 3.1 Execution Copy CERTIFICATE OF DESIGNATIONS,…To view the full exhibit click here
About MAGNEGAS CORPORATION (NASDAQ:MNGA)
MagneGas Corporation is an alternative energy company. The Company creates and produces hydrogen-based alternative fuel through the gasification of carbon-rich liquids, including certain liquids and liquid wastes. The Company is also developing the use of fuel for co-combustion with hydrocarbon fuels to reduce emissions. The Company also markets, for sale or licensure, its plasma arc technology for the processing of liquid waste (the Plasma Arc Flow System). Its products include the fuel called MagneGas2 for the metal working industry, the equipment primarily known in the firefighting industry, known as MagneTote, and the machines that produce MagneGas2, known as Plasma Arc Flow refineries. In addition, the Company sells metal cutting fuels and ancillary products through its subsidiary, Equipment Sales and Service, Inc. (ESSI), a Florida corporation. It distributes products through several industrial gas companies in California, Michigan, Florida, Georgia, Indiana, and Pennsylvania.