Deal offers common stock at $1.45; preferreds convert at same price
By Devika Patel
Knoxville, Tenn., March 25 - MagneGas Corp. said it plans a $5 million private placement of common stock and preferred stock. Northland Securities, Inc. is the agent for the deal.
The company will sell 2 million common shares at $1.45 apiece. The purchase price is a 32.56% discount to the March 24 closing share price of $2.15.
The investors also will buy $2.1 million of series C convertible preferred shares. The preferreds are convertible into a total of 1,448,276 common shares at $1.45 per share, also a 32.56% discount to the March 24 closing share price.
Investors will also receive warrants for 1,724,138 shares, which are each exercisable at $2.15, which is identical to the March 24 closing price.
Settlement is expected March 28.
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 C convertible preferred stock
|
| Amount: | $5 million
|
| Warrants: | For 1,724,138 shares
|
| Warrant strike price: | $2.15
|
| Agent: | Northland Securities, Inc.
|
| Pricing date: | March 25
|
| Settlement date: | March 28
|
| Stock symbol: | Nasdaq: MNGA
|
| Stock price: | $2.15 at close March 24
|
| Market capitalization: | $36.97 million
|
|
|
| Common shares
|
| Amount: | $2.9 million
|
| Shares: | 2 million
|
| Price: | $1.45
|
|
|
| Preferreds
|
| Amount: | $2.1 million
|
| Conversion price: | $1.45
|
| Conversion ratio: | Into 1,448,276 common shares
|
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