MAGNEGAS CORPORATION (NASDAQ:MNGA) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Exchange Agreement

On May 9, 2017, MagneGas Corporation (the Company) entered into
an Exchange Agreement (Exchange Agreement) with an institutional
investor (Investor). The Company previously sold to the Investor
(i) Senior Convertible Debentures (the Convertible Debentures),
Series E-1 Common Stock Purchase Warrants, Series E-2 Common
Stock Purchase Warrants, Series E-5 Common Stock Purchase
Warrants and Series E-6 Common Stock Purchase Warrants, to an
exemption from the registration requirements of Section 5 of the
Securities Act of 1933, as amended (the Securities Act) contained
in Section 4(a)(2) thereof and/or Regulation D thereunder and
(ii) Series E-4 Common Stock Purchase Warrants and Series E-7
Common Stock Purchase Warrants to an effective registration
statement under the Securities Act (collectively, the Warrants).
The Warrants are currently exercisable for 22,198,554 shares of
Common Stock. For more information regarding the Convertible
Debentures and Warrants, please refer to the Companys Current
Report on Form 8-K filed with the Securities and Exchange
Commission (SEC) on June 27, 2016. Under the terms of the
Exchange Agreement, the Investor has agreed to exchange with the
Company (the Exchange), the Warrants for (i) 2,700 shares of
newly issued Series B Convertible Preferred Stock at a stated
value of $1,000 per share and convertible into 9,000,000 shares
of Common Stock at a conversion price of $0.30 and (ii) 1,000,000
shares of newly issued Common Stock (collectively, the Exchange
Securities).

The above description of the Exchange Agreement does not purport
to be complete and is qualified in its entirety by the full text
of such Exchange Agreement, which is attached hereto as Exhibit
10.1 and incorporated herein by reference.

Amendment to Convertible Debenture

to terms of the Exchange Agreement, the Company also agreed to
amend the terms of the Convertible Debentures, which has a
current outstanding principal amount of $829,000, as follows: (i)
the Conversion Price of the Convertible Debenture is reduced from
$0.57 to $0.30, subject to adjustment under the Exchange
Agreement or under the terms of such Convertible Debenture, which
will result in an increase of 1,308,947 shares of Common Stock
that may be issuable upon conversion of the Convertible Debenture
and (ii) the Company shall be permitted to prepay the
then-outstanding principal amount of the Convertible Debenture,
together with a prepayment premium in the amount of 10% of the
principal amount being prepaid, without having to obtain the
prior written consent of the Investor as required by Section 2(b)
of the Convertible Debenture.

The above description of the Exchange Agreement does not purport
to be complete and is qualified in its entirety by the full text
of such Exchange Agreement, which is attached hereto as Exhibit
10.1 and incorporated herein by reference.

Leak-Out Agreement

On May 9, 2017, the Company entered into a Leak-Out Agreement
with the Investor in connection with the Exchange Agreement
attached hereto as Exhibit 10.1. The Leak-Out Agreement mandates
that from the date that the Investor executes the Exchange
Agreement (the Effective Date) and ending on the earlier of (i)
the date that the Company receives notice from Nasdaq that it is
back in compliance with the $1.00 minimum bid requirement and
(ii) June 1, 2017 (such period, the Restricted Period), at any
time that the then prevailing bid price of the Companys common
stock on the trading market (as reported by Bloomberg L.P.) is
less than $0.30 (as adjusted for stock splits, stock dividends,
stock combinations, recapitalizations or other similar events
occurring after the date of the Leak-Out Agreement), neither the
Investor, nor any affiliate of such Investor, shall sell dispose
or otherwise transfer, directly or indirectly, (including,
without limitation, any sales, short sales, swaps or any
derivative transactions that would be equivalent to any sales or
short positions) on any trading day during the Restricted Period
(any such date, a Date of Determination), an amount of the
Exchange Securities more than 20% of the trading volume of Common
Stock as reported by Bloomberg, LP for the applicable Date of
Determination.

The above description of the Leak-Out Agreement does not purport
to be complete and is qualified in its entirety by the full text
of such Leak-Out Agreement, which is attached hereto as Exhibit
10.2 and incorporated herein by reference.

Securities Purchase Agreement, Debenture and Guarantee

On May 9, 2017, the Company entered into a Securities Purchase
Agreement (SPA) with the Investor providing for the sale and
issuance of 8% Senior Debentures. to the SPA, the Company agrees
to sell, and the Investor agrees to purchase up to an aggregate
of $1,000,000 principal amount of Senior Debentures (Debenture).
The Debenture is due in November 2017 and bears interest at a
rate of 8% per annum based on a 360-day year. The Company is
required to make interest payments quarterly beginning on the
original issuance date of the Debenture. The Debenture is
unsecured and is not convertible.

In conjunction with the SPA and Debenture, the Companys
subsidiaries executed a Subsidiary Guarantee (Guarantee) for the
benefit of the Investor. The Guarantee guarantees repayment of
the Debenture and includes all of the Companys wholly owned
subsidiaries as joint and several guarantors.

There was no placement agent for this transaction.

The above description of the SPA, Debenture and Guarantee do not
purport to be complete and are qualified in its entirety by the
full text of such SPA, Debenture and Guarantee, which are
attached hereto as Exhibit 10.3, 10.4 and 10.5, respectively and
are incorporated herein by reference.

The applicable information set forth in Item 1.01 of this Current
Report on Form 8-K is incorporated by reference in this Item
2.03.

to the terms of the Exchange Agreement, the Company will issue
(i) 2,700 shares of newly issued Series B Convertible Preferred
Stock convertible into 9,000,000 shares of Common Stock and (ii)
1,000,000 shares of newly issued Common Stock (collectively, the
Exchange Securities), to the Investor to Section 3(a)(9) of the
U.S. Securities Act of 1933, as amended (the Securities Act), in
exchange for warrants to purchase 22,198,554 shares of Common
Stock held by the Investor. The issuance of the Exchange
Securities to the Exchange Agreement as described herein is
exempt from registration under the Securities Act to the
provisions of Section 3(a)(9) thereof as securities exchanged by
the issuer with its existing security holders exclusively where
no commission or other remuneration is paid or given directly or
indirectly for soliciting such exchange.

to the terms of the SPA, the Debentures were offered and sold in
reliance upon the exemption from registration provided by Section
4(a)(2) under the Securities Act.

The applicable information set forth in Item 1.01 of this Current
Report on Form 8-K is incorporated by reference in this Item
3.02.

In connection with the Exchange Agreement, prior to the scheduled
closing date of the exchange transaction described in Item 1.01
of this Current Report on Form 8-K,the Company shall file a
Certificate of Designation of Series B Convertible Preferred
Stock (the Certificate of Designation) with the Secretary of
State for the State of Delaware. The summary of the rights,
powers, and preferences of the Preferred Stock set forth in Item
1.01 of this Current Report on Form 8-K is incorporated by
reference into this Item 5.03.

A copy of the Certificate of Designation is attached hereto as
Exhibit 4.1 and incorporated herein by reference.

On May 10, 2017, the Company issued a press release regarding the
transactions described above under Item 1.01 of this Current
Report on Form 8-K.

A copy of the press release is attached hereto as Exhibit 99.1
and is incorporated herein by reference.

(d)Exhibits.

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 down -0.027 at 0.271 with 615,407 shares trading hands.