MagneGas Signs Letter of Intent for $2.65 Million Equipment Sale to German Company; Largest Single Sale in Company History Also Includes Expansion Opportunities
Letter of Intent Signed for $2.65 Million Includes Sale of Gasification System, Sterilization System and MagneGas2(R) Fuel; LOI Includes Royalties and Expansion Rights
TAMPA, FL -- (Marketwired) -- 10/17/16 -- MagneGas Corporation ("MagneGas" or the "Company") (NASDAQ: MNGA) (MNGA) a leading technology Company that counts among its inventions a patented process that converts renewable and waste liquids into innovative MagneGas2® fuel, a replacement for acetylene, announced today that it has entered into its largest equipment sale to date with a Letter of Intent ("LOI") to manufacture and deliver certain equipment and supplies to a company based in Germany. MagneGas will receive $2.65 million for its proprietary Gasification and Sterilization systems and will supply MagnesGas2® fuel and cylinders. The sale marks a new era for the Company as it seeks to expand the availability of its technology and MagneGas2® fuel across the European continent in the global $5 billion metal cutting fuel market.
Under the terms of the LOI, MagneGas will manufacture 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. A deposit of $25,000 has been received, with progress payments totaling $2.625 million due upon signature of the definitive agreements, construction completion and delivery of systems with related supplies. The LOI calls for exclusive distribution rights in Germany, with an option to purchase rights to certain additional countries with system deployments.
MagneGas has agreed to keep the name of the German company and the exact details of the LOI confidential until the parties enter into the definitive agreements. The Gasification system will be used to produce MagneGas2® fuel to sell into the German market with the potential of other markets coming online soon after. The Sterilization system will be used for demonstrations and small service contracts with the goal of entering the agriculture and municipal wastewater treatment markets in Germany.
Ermanno Santilli, CEO of MagneGas Corporation stated: "The entire MagneGas team is excited about this opportunity because it holds the potential to open up target markets that desperately need our technology and the fuel it can produce. This sale is the largest sale in the history of MagneGas and will provide us the opportunity to expand further into Europe. We believe this is one of the most significant events in the Company's evolution and will help define our strategy for 2017 and beyond."
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About MagneGas Corporation
MagneGas® Corporation (MNGA) owns a patented process that converts various renewables and liquid wastes into MagneGas fuels. These fuels can and are being used by some of the nation's most recognized businesses and governmental organizations as an alternative to natural gas or for metal cutting. The Company's testing has shown that its metal cutting fuel "MagneGas2®" is faster, cleaner and more productive than other alternatives on the market. It is also cost effective and safe to use with little changeover costs. The Company currently sells MagneGas2® into the metal working market as a replacement to acetylene and is working with such recognized leaders as the US Army, US Navy, the Fire Department of New York (FDNY), several of the largest utilities in the United States and most recently, expanded its presence with one of the world's premier auto manufacturers. MagneGas2® is being touted as the next big thing in the metal cutting and fabrication sectors and as the only truly safe and superior replacement of the legacy fuel acetylene.
The Company also sells equipment for the sterilization of bio-contaminated liquid waste for various industrial and agricultural markets. In addition, the Company is developing a variety of ancillary uses for MagneGas® fuels utilizing its high flame temperature for co-combustion of hydrocarbon fuels and other advanced applications. For more information on MagneGas2®, please visit the Company's website at http://www.MagneGas.com.
The Company distributes MagneGas2® through Independent Distributors in the U.S. and through its wholly owned distributor, ESSI (Equipment Sales and Services, Inc.). ESSI has four locations in Florida and distributes MagneGas2®, industrial gases and welding supplies. For more information on ESSI, please visit the company's website at http://www.weldingsupplytampa.com
This press release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events, including our ability to raise capital, or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The Company is currently using virgin vegetable oil to produce fuel while it configures its systems to properly process waste within local regulatory requirements.
For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.
KCSA Strategic Communications
Source: MagneGas Corporation
Released October 17, 2016