Deal offers common stock at $0.80; preferreds sold at $1,000 apiece
By Devika Patel
Knoxville, Tenn., Jan. 22 - MagneGas Corp. arranged a $4 million private placement of stock and preferreds on Jan. 21, according to an 8-K filed Tuesday with the Securities and Exchange Commission. Northland Securities, Inc. is the agent.
The company will sell 2,323,584 common shares at $0.80 apiece. The purchase price is a 23.08% discount to the Jan. 17 closing share price of $1.04.
The investors also will buy $2.14 million of series B convertible preferred shares at $1,000 per preferred. The preferreds are convertible into a total of 2,676,416 common shares at $0.80 per share, also a 23.08% discount to the Jan. 17 closing share price.
Investors will also receive warrants for 2,676,416 shares, which are each exercisable at $1.11 for five years. The strike price is a 6.73% premium to the Jan. 17 closing price.
Settlement is expected Jan. 27.
Proceeds will be used for general corporate purposes, including working capital and potential acquisitions.
Tampa, Fla.-based MagneGas produces MagneGas, a natural-gas alternative and metal-working fuel made from liquid waste such as sewage.
| Issuer: | MagneGas Corp.
|
| Issue: | Common stock, series B convertible preferred stock
|
| Amount: | $4 million
|
| Warrants: | For 2,676,416 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $1.11
|
| Agent: | Northland Securities, Inc.
|
| Pricing date: | Jan. 21
|
| Settlement date: | Jan. 27
|
| Stock symbol: | Nasdaq: MNGA
|
| Stock price: | $1.04 at close Jan. 17
|
| Market capitalization: | $23.77 million
|
|
|
| Common shares
|
| Amount: | $1,858,867
|
| Shares: | 2,323,584
|
| Price: | $0.80
|
|
|
| Preferreds
|
| Amount: | $2,141,133
|
| Price: | $1,000.00
|
| Conversion price: | $0.80
|
| Conversion ratio: | Into 2,676,416 common shares
|
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