MagneGas (MNGA) Enters $3M Securities Purchase Agreement

November 16, 2016 8:32 AM EST

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MagneGas Corporation (Nasdaq: MNGA) announced today that on November 16, 2016, it entered into an agreement with a single institutional investor for a registered direct placement of approximately $3 million. The Securities Purchase Agreement provides for the sale of $2.5 million of pre-funded warrants which warrants are exercisable into 5,102,041 shares and $500,000 in payment for 1,020,408 shares.

The investor and the Company also agreed to amend the following warrants issued as part of a June 2016 financing: an E-4 common stock purchase warrant is now exercisable at $0.66 ($0.01 above the closing market price) for the investor to purchase up to an additional $4.6 million of common stock and is now exercisable 6 months from the closing of this transaction and now has a term of 7 years; an E-5 common stock purchase warrant to purchase 3,508,772 shares of common stock is now exercisable at $0.90 (approximately 38% premium to the closing market price); and an E-6 common stock purchase warrant to purchase 1,754,386 shares of common stock is also now exercisable at $0.90. The Series E-5 and E-6 common stock purchase warrants vest ratably only upon the exercise of the E-4 common stock purchase warrant.

The placement is expected to close on or before November 18, 2016, subject to satisfaction of customary closing conditions.

The pre-paid warrants and common stock are being offered and the E-4 warrants are being amended pursuant to a shelf registration statement (File No. 333-207928), which was declared effective by the United States Securities and Exchange Commission ("SEC") on June 15, 2016.

The E-5 and E-6 warrants are being amended pursuant to a resale registration statement (File No. 333-212879), which was declared effective by the SEC on August 12, 2016.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.



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