MagneGas (MNGA) Announces Completion of Gulf Coast Gasification System Expansion
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MagneGas Corporation (Nasdaq: MNGA) announced that it has successfully completed construction of the Plasma-Arc Gasification system (the "System") that was previously announced as contracted for sale (the "Gasifier Agreement") to Green Arc Supply, LLC of Louisiana ("Green Arc").
Pursuant to the terms of the Gasifier Agreement, the Company has received a total of $583,750 towards the construction of the system. The final payment of $191,500 is due upon factory acceptance, which is expected in the next 30 days. A Distribution and License Agreement with Green Arc (the "Distribution Agreement") signed at the same time as the Gasifier Agreement calls for Green Arc to pay MagneGas royalty payments that equate to approximately 6% of gross sales of MagneGas2® fuel and other products by Green Arc.
Under the terms of the Distribution Agreement, once the final payment is made, Green Arc will have exclusive distribution rights to MagneGas2® for certain regions of Louisiana and Texas with non-exclusive distribution rights in remaining regions of Louisiana and Texas and all of Arkansas, Mississippi and Oklahoma. Green Arc has the right to expand their exclusivity in those states with the purchase of additional systems. The Company believes the Distribution Agreement may result in further significant capital infusions for the Company through royalty payments and further equipment sales.
Ermanno Santilli, CEO of MagneGas Corporation stated: "Completing construction of the System is the single most important event of this year as it signifies a new era in the Company's operating model. Reaching this milestone shows that the Company is not only able to perform at a high productivity level but that it has the ability to be an extremely capable manufacturer. I look forward to expanding our relationship with Green Arc as we seek to grow MagneGas2® sales throughout the Gulf Coast region."
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