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

Item 1.01

Securities Purchase Agreement

On June 12, 2017, MagneGas Corporation (the Company) entered into
a Securities Purchase Agreement (SPA) with one or more investors
identified on the pages thereto (Investors) attached hereto as
Exhibit 10.1. Under the terms of the SPA, the Company shall issue
and sell to each Investor, and each Investor severally, but not
jointly, agrees to purchase from the Company Series C Convertible
Preferred Stock (Preferred Shares), Series C Convertible
Preferred Warrants (Preferred Warrants) and Common Stock Purchase
Warrants (Common Stock Warrants) (collectively, the Transaction
Securities) as set forth on the Schedule of Buyers attached to
the SPA and Schedule II of the Preferred Warrants, for a total
gross purchase price of up to $25,000,000 (the Offering). At the
initial closing under the SPA, the Company will issue a total of
75 Preferred Shares at a purchase price of $900 per share. The
Preferred Warrants will be exercisable for a total of 24,925
Preferred Shares at an exercise price of $900 per share. The
Preferred Shares have an initial conversion price of $3.00 and
will be initially convertible into an aggregate of 8,333,334
shares of common stock. The Common Stock Warrants will be
exercisable for 2,916,667 shares of common stock, representing
thirty-five percent (35%) of the total number of shares of common
stock initially issuable upon conversion of the Preferred Shares.
The exercise price of the Common Stock Warrants is $3.00 per
share.

The Company obtained the written consent of the holders of a
majority of its outstanding voting securities approving the terms
of the Offering and the issuance of the Transaction Securities,
including the potential issuance of more than 20% of the Companys
issued and outstanding common stock in connection with the
Offering, in accordance with Nasdaq Listing Rule 5635. The
Company is also required to file with the Securities and Exchange
Commission, and mail to its stockholders, a definitive
information statement in compliance with Rule 14c-2 promulgated
under the Securities Exchange Act of 1934, as amended.

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

Series C Convertible Preferred Stock

The Company shall designate a new class of preferred stock as
Series C Convertible Preferred Stock in the aggregate amount of
25,000 shares. The Preferred Shares will have a stated value of
$1,000, with an aggregate value of $25,000,000. At the Closing of
the Offering, the Company will issue 75 Preferred Shares, with
the remaining 24,925 Preferred Shares underlying the Preferred
Warrants.

The holders of Preferred Shares shall be entitled to receive
dividends, when and as declared by the Board, from time to time,
in its sole discretion. From and after the occurrence of a
Triggering Event (as defined in the certificate of designation
for the Preferred Shares) until such time as all Triggering
Events then outstanding are cured, the holders shall be entitled
to receive Dividends at a rate of eighteen percent (18.0%) per
annum, which dividends shall be computed on the basis of a
360-day year and twelve 30-day months and shall compound each
calendar month.

The initial conversion price of the Preferred Shares is $3.00.

At any time after the occurrence of a Triggering Event the holder
may, at its option, convert any Preferred Shares at an Alternate
Conversion Price. The Alternate Conversion Price means the lower
of (A) the applicable conversion price as then in effect and (B)
the greater of (x) $0.35 and (y) the lowest of (i) 85% of the
VWAP of the common stock as of the trading day immediately
preceding the delivery or deemed delivery of the applicable
conversion notice, (ii) 85% of the VWAP of the common stock as of
the trading day of the delivery or deemed delivery of the
applicable conversion notice and (iii) 85% of the price computed
as the quotient of (I) the sum of the VWAP of the common stock
for each of the ten (10) trading days with the lowest VWAP of the
common stock during the twenty (20) consecutive trading day
period ending and including the trading day immediately preceding
the delivery or deemed delivery of the applicable conversion
notice, divided by (II) ten (10).

In lieu of conversion, upon a Triggering Event, the holder may
require the Company to redeem all or any of the Preferred Shares
at a price equal to the greater of (i) the product of (A) the
conversion amount of the Preferred Shares to be redeemed
multiplied by (B) a redemption premium of 115% and (ii) the
product of (X) the conversion rate with respect to the conversion
amount in effect at such time of redemption multiplied by (Y) the
product of (1) a redemption premium of 115% multiplied by (2) the
greatest closing sale price of the common stock on any trading
day during the period commencing on the date immediately
preceding such Triggering Event and ending on the date the
Company makes the entire redemption payment.

On each applicable Installment Date (as defined in the
certificate of designation for the Preferred Shares), provided
there has been no Equity Conditions Failure (as defined in the
certificate of designation for the Preferred Shares), the Company
shall convert the applicable amount of Preferred Shares from each
holder into shares of common stock; provided, however, that the
Company may, at its option following notice to each holder,
redeem such amount of Preferred Shares by paying to each holder
the corresponding installment amount in cash. The applicable
installment conversion price with respect to a particular date of
determination, shall be equal to the lower of (A) the conversion
price then in effect and (B) the greater of (x) $0.35 and (y) the
lower of (i) 85% of the VWAP of the common stock as of the
trading day immediately preceding the applicable Installment Date
and (ii) 85% of the quotient of (A) the sum of the VWAP of the
common stock for each of the ten (10) trading days with the
lowest VWAP of the common stock during the twenty (20)
consecutive trading day period ending and including the trading
day immediately prior to the applicable Installment Date, divided
by (B) ten (10).

If the Company elects to effect an installment redemption in lieu
of an installment conversion, in whole or in part, such Preferred
Shares shall be redeemed by the Company in cash on the applicable
Installment Date in an amount equal to 103% of the applicable
installment redemption amount.

In addition to the redemptions described above, at any time no
Equity Conditions Failure exists, the Company shall have the
right to redeem, in one redemption, up to $10 million of the
conversion amount of the Preferred Shares then outstanding. The
Preferred Shares subject to redemption at the Companys option
shall be redeemed by the Company in cash at a price equal to 115%
of the greater of (i) the conversion amount of the Preferred
Shares being redeemed and (ii) the product of (I) the conversion
rate with respect to the conversion amount of the Preferred
Shares being redeemed multiplied by (II) the greatest closing
sale price of the common stock on any trading day during the
period commencing on the date immediately preceding such
redemption and ending on the trading day immediately prior to the
date the Company makes the entire redemption payment.

Series C Convertible Preferred Warrant

The Preferred Warrants will be exercisable for a total of 24,925
shares of Series C Convertible Preferred Stock at an exercise
price of $900 per share. Under the terms of the Preferred
Warrants, so long as there is no Equity Conditions Failure (as
defined in the Preferred Warrants) the Investors will purchase
Preferred Warrants from the Company in accordance with Schedule
II attached thereto. The Company is obligated at all times to
keep reserved for issuance under the Preferred Warrants a number
of shares of Series C Convertible Preferred Stock at least equal
to 100% of the maximum number of shares as shall be necessary to
satisfy the Companys obligation to issue Series C Convertible
Preferred Stock under the Preferred Warrants (without regard to
any limitations on exercise).

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

Common Stock Purchase Warrant

The Common Stock Warrants will be exercisable for 2,916,667
shares of common stock, representing a total number of shares of
common stock equal to thirty-five percent (35%) of the total
number of shares of common stock initially issuable upon
conversion of the Preferred Shares at an exercise price equal to
$3.00 per share. The Common Stock Warrants are not exercisable
until such time as the requisite shareholder approval as required
by Nasdaq Rule 5635 is effective. If at the time of exercise of
the Common Stock Warrants a registration statement is not
effective (or the prospectus contained therein is not available
for use) for the resale by the holder of the Common Stock
Warrants that are the subject of the Exercise Notice (as defined
in the Common Stock Warrants), then the holder may, in its sole
discretion, exercise the Common Stock Warrants in whole or in
part and, by means of a cashless exercise. Furthermore, the
Company is prevented from effecting the exercise of any portion
of the Common Stock Warrants, and the holder shall not have the
right to exercise any portion of the Common Stock Warrants, if
after giving effect to such exercise, the Holder together with
the other Attribution Parties (as defined in the SPA)
collectively would beneficially own in excess of 4.99% of the
shares of Common Stock outstanding immediately after giving
effect to such exercise. So long as the Common Stock Warrants
remains outstanding, the Company shall at all times keep reserved
for issuance a number of shares of Common Stock at least equal to
100% of the maximum number of shares of Common Stock as shall be
necessary to satisfy the Companys obligation to issue shares of
common stock under the Common Stock Warrants then outstanding
(without regard to any limitations on exercise).

The above description of the Common Stock Warrant does not
purport to be complete and is qualified in its entirety by the
full text of such the Common Stock Warrant, which is incorporated
herein and attached hereto as Exhibit 10.3.

Registration Rights Agreement

The Company will enter into a Registration Rights Agreement
(Registration Rights Agreement) with the Investors in connection
with the SPA attached hereto as Exhibit 10.4. Under the terms of
the Registration Rights Agreement, the Company agrees to prepare
and file with the SEC, as soon as practicable, but in no event
later than the 30^th day calendar day after the Closing
of the SPA, an initial Registration Statement on Form S-3
covering the Preferred Shares and the shares of common stock
underlying the Common Stock Warrants. Additionally, the
Registration Rights Agreement includes a minimum number of shares
that must be registered on the initial Registration Statement.
Furthermore, in the event that Form S-3 is not available for the
registration of the registrable securities, the Company will (i)
register the registrable securities on Form S-1 or another
appropriate form reasonably acceptable to the Investors and (ii)
undertake to register the registrable securities on Form S-3 as
soon as such form is available, provided that the Company shall
maintain the effectiveness of all Registration Statements then in
effect until such time as a Registration Statement on Form S-3
covering all the registrable securities has been declared
effective by the SEC and the prospectus contained therein is
available for use.

The above description of the Registration Rights Agreement does
not purport to be complete and is qualified in its entirety by
the full text of such the Registration Rights Agreement, which is
incorporated herein and attached hereto as Exhibit 10.4.

Placement Agent Compensation

Maxim Group, LLC (Maxim) acted as the exclusive placement agent
for this transaction. The Company agreed to pay Maxim a cash fee
payable upon each closing of the Offering (each, a Closing) equal
to 6.0% of the gross proceeds received by the Company at each
Closing (the Placement Fee). Additionally, the Company will, at
each Closing, grant to Maxim (or its designated affiliates)
warrants to purchase common stock (the Placement Agent Warrants)
in an amount equal to five percent (5.0%) of the shares of common
stock issuable upon conversion of the Series C Preferred Stock
issued at each such Closing. The Placement Agent Warrants will be
exercisable immediately upon issuance and will expire five (5)
years after the applicable Closing. The Placement Agent Warrants
will be exercisable at a price per share equal to $3.30. The
Placement Agent Warrants will not be redeemable. The Placement
Agent Warrants may be exercised in whole or in part and shall
provide for cashless exercise, except in the event the shares of
common stock issuable upon exercise of the Placement Agent
Warrants are registered for resale, in which case they will
provide for cash exercise only.

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.

The Transaction Securities and Placement Agent Warrants were
offered and sold in reliance upon the exemption from registration
contained in Section 4(a)(2) of the Securities Act of 1933, as
amended (the Securities Act) and Regulation D, Rule 506(b).

In connection with the SPA, prior to the closing date of the
transaction described in Item 1.01 of this Current Report on Form
8-K, the Company shall file a Certificate of Designation of
Series C Convertible Preferred Stock (the Certificate of
Designation) with the Secretary of State for the State of
Delaware. The Certificate of Designation shall designate a new
class of preferred stock as Series C Convertible Preferred Stock
in the aggregate amount of 25,000 shares. The Series C
Convertible Preferred Stock will have a stated value of $1,000
per share of Series C Convertible Preferred Stock and an initial
conversion price equal to $3.00. The Series C Convertible
Preferred Stock is not convertible until such time as the
requisite shareholder approval as required by Nasdaq Rule 5635 is
effective. The summary of the rights, powers, and preferences of
the Series C Convertible 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 June 12, 2017, the Company issued a press release announcing
the Offering.

A copy of the press release that discusses this matter is
attached hereto as Exhibit 99.1 and 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.