MAGNEGAS CORPORATION (NASDAQ:MNGA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On December 30, 2016, MagneGas Corporation (the Company) entered
into a MagneGas Systems Purchase Agreement (the Purchase
Agreement) with Talon Ventures Consulting GMBH,
a company constituted under the laws of Germany (Talon) to
manufacturer and deliver: (1) a 300KW stationary Gasification
system; 2) a 100KW mobile Sterilization system; 3) 250 cylinders
full of MagneGas2; and 4) 50 MagneGas regulators in exchange for
progress payments totaling $2.625 million dollars to be made over
the course of the manufacturing and delivery of the various
systems. Under the terms of the Purchase Agreement, the Company
received a non-refundable deposit of $25,000 on October 7, 2016
as part of the original Letter of Intent (the LOI), which was
signed on August 28, 2016.
Also, on December 30, 2016, the Company entered into a
Distribution and License Agreement (the Distribution Agreement)
with Talon. Under the terms of the Distribution Agreement, Talon
will own and operate a 300kw stationary Gasification system to
distribute MagneGas2 fuel, a patented product of the Company, for
the metal cutting market as a replacement to acetylene. Talon
will have exclusive distribution rights to distribute MagneGas2
fuel in Germany, with non-exclusive distribution rights
commencing after two (2) years from the date of delivery of the
Gasification system in the United States, Australia, Italy,
Kazakhstan, China and India. In exchange, the Company will
receive royalty payments of two cents ($0.02) per cubic foot of
MagneGas2 fuel sold by Talon.
On October 7, 2016, the Company announced that they finalized a
LOI with Talon to expand into Germany through a $2.65 million
dollar stationary Gasification system sale that included
exclusive distribution rights in Germany, with an option to
purchase distribution rights in additional countries. The LOI has
been replaced by the Purchase Agreement and Distribution
Agreement.
The first payment of $1,350,000, representing 50% of the combined
purchase price of the MagneGas systems plus the full price of the
cylinders and regulators, less the initial deposit, is to be due
to the Company within 90 days following the execution of the
Purchase Agreement. An additional $637,500 shall be paid to the
Company within 15 business days of Talons receipt of written
notice from the Company certifying that construction of the
MagneGas systems is 75% complete. A third installment of $382,500
shall be due upon final completion of the MagneGas systems and
Talons accepting delivery thereof at the factory. A final
installment of $255,000 shall be due upon delivery and
installation, but in no event later than 20 business days after
delivery.
The above descriptions of the Purchase Agreement and the
Distribution Agreement are intended as a summary only and are
qualified in their entirety by the terms and conditions set forth
therein. For further information regarding the terms and
conditions of the Purchase Agreement and the Distribution
Agreement, this reference is made to such agreements, which are
filed hereto as Exhibit 10.1 and Exhibit 10.2 and incorporated
herein by this reference.
Item 8.01 Other Events.
On January 5, 2017, the Company issued a press release with
regard to the Purchase Agreement and Distribution Agreement. The
press release is filed as Exhibit 99.1 and is incorporated by
reference herein.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
| Exhibit No. |
Description |
|
| Exhibit 10.1 | MagneGas Systems Purchase Agreement, dated December 30, 2016. | |
| Exhibit 10.2 | Distribution and License Agreement, dated December 30, 2016 | |
| Exhibit 99.1 | Press Release |
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. MAGNEGAS CORPORATION (NASDAQ:MNGA) Recent Trading Information
MAGNEGAS CORPORATION (NASDAQ:MNGA) closed its last trading session up +0.014 at 0.480 with 318,588 shares trading hands.