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

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

Item 1.01Entry into a Material Definitive Agreement.

On February 15, 2017, MagneGas Corporation (the Company) held a
closing (the Closing) of a private placement, in which the
Company sold 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 Securities Purchase
Agreement and Schedule II of the Preferred Warrants, for a total
gross purchase price of up to $25,000,000 (the Offering). At the
Closing, the Company issued a total of 75 Preferred Shares at a
purchase price of $900 per share. The Preferred Warrants are
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 Offering was exempt from
registration under Section 4(a)(2) of the Securities Act of 1933,
as amended (the Securities Act), in reliance upon the safe harbor
provided by Rule 506(b) of Regulation D.

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 equal to 6.0% of the
gross proceeds received by the Company at each Closing (the
Placement Fee). Additionally, the Company granted to Maxim (or
its designated affiliates) warrants to purchase up to 416,667
shares common stock (the Placement Agent Warrants). The Placement
Agent Warrants will expire five (5) years after the 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 above
description of the Placement Agent Warrants does not purport to
be complete and is qualified in its entirety by the full text of
such Placement Agent Warrants, which is incorporated herein and
attached hereto as Exhibit 10.1.

As a condition to closing the Offering, Global Alpha, LLC (the
Majority Stockholder), who owns approximately 99% of the Companys
outstanding voting power, executed a Voting Agreement with the
Company. to the Voting Agreement, the Majority Stockholder agreed
to vote in favor of the Companys issuance of the Transaction
Securities and the common stock into which the Preferred Shares
can be converted and Common Stock Warrants can be exercised. 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 10.2.

The Company became a party to that certain Registration Rights
Agreement dated as of June 15, 2017, which Registration Rights
Agreement was described in the Companys Current Report on Form
8-K filed by the Company on June 12, 2017 (the June 12 Form 8-K)
and specifically incorporated herein by reference. For a
description of the terms and conditions of the Registration
Rights Agreement, see Item 1.01 Entry into a Material Definitive
Agreement in the June 12 Form 8-K and Exhibit 10.4 of the June 12
Form 8-K which is incorporated herein by reference.

Item 3.02Unregistered Sales of Equity
Securities.

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).

Item 5.03Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.

On June 14, 2017, the Company filed an Amended and Restated
Certificate of Incorporation with the Secretary of State of the
State of Delaware to, among other things, increase the number of
authorized shares of common stock from ninety million
(90,000,000) to one hundred ninety million (190,000,000). The
proposal for the amendment was approved by the Companys
shareholders at a Special Meeting of Shareholders held on May 17,
2017. A copy of the Amended and Restated Certificate of
Incorporation is attached hereto as Exhibit 3.1 and incorporated
herein by reference.

In connection with the closing of the Offering, the Company filed
a Certificate of Designation of Series C Convertible Preferred
Stock (the Certificate of Designation) with the Secretary of
State for the State of Delaware on June 15, 2017. The Certificate
of Designation designated a new class of preferred stock as
Series C Convertible Preferred Stock in the aggregate amount of
25,000 shares. The Series C Preferred Stock has a stated value of
$1,000 per share of Series C Preferred Stock and a conversion
price equal to $3.00. The Series C Convertible Preferred Stock is
not convertible until such time as the Company obtains the
requisite shareholder approval as required by Nasdaq Rule 5635.
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
3.2 and incorporated herein by reference.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation
3.2 Certificate of Designation for Series C Convertible Preferred
Stock
10.1 Form of Placement Agent Warrant
10.2 Form of Voting Agreement
10.3 Form of Registration Rights Agreement (incorporated by
reference to Exhibit 10.4 to the registrants Current Report
on Form 8-K filed with the SEC on June 12, 2017)



MAGNEGAS CORP Exhibit
EX-3.1 2 v469204_ex3-1.htm EXHIBIT 3.1   Exhibit 3.1     AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF MAGNEGAS CORPORATION   MagneGas Corporation,…
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.

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