MagneGas Reports Financial Results For 3rd Quarter 2013
TAMPA, Fla., Nov. 14, 2013 /PRNewswire/ -- MagneGas Corporation ("MagneGas" or the "Company") (NASDAQ: MNGA), the developer of a technology that converts liquid waste into a hydrogen-based fuel, today announced its financial results for the fiscal quarter ended September 30, 2013. During the period, the Company continued to implement their new strategy with a focus on the following initiatives:
- Improved External Customer Focus
- Large Strategic Customers
- Enhanced Technology Collaboration
- Significant Cost Reductions
- Accelerated R&D Testing
- Third Party Validation of Fuels and Equipment
"The entire MagneGas team world-wide has made great strides in improving our customer focus, in accelerating R&D testing and reducing costs," commented Ermanno Santilli CEO of MagneGas. "While our sales results for the third quarter have not materially improved, we have made clear progress with all of our strategic customers and continue to improve our product. MagneGas has never had more recycler sales under quotation or had as many strategic industrial gas opportunities as it has today. This is a direct result of increased technological collaboration between our world partners and a more customer centric organization coupled with a faster and more responsive customer driven R&D process."
"The Company has embarked on an aggressive cost cutting strategy which includes the elimination of non-essential personnel, closing of locations that are not producing sufficient revenue and working towards improving margins on both equipment and fuel sales," stated Luisa Ingargiola, CFO. "Our efforts have achieved a 28% operational cost reduction in the 3rd Q of 2013 versus the same period in 2012."
September 30, 2013
- Revenues for the three months ended September 30, 2013 and 2012 were $125,410 and $201,096, respectively;
- Operating expenses decreased for the quarter to $1,559,799 versus $2,166,514 for the same period prior year;
- The Company had an ending cash balance of $579,098 on September 30, 2013 versus $1,470,642 on December 31, 2012.
September 30, 2013 Business Highlights:
- Strategic partnerships with General Motors, the US Navy, and two metropolitan fire departments progressed while new strategic relationship were pursued;
- The Company signed definitive agreements for the sale of small test equipment to the Central Asian country of Kazakhstan for $500,000 with $276,000 paid to date;
- The Company signed a Joint Venture Memorandum of Understanding with a confidential company in the United States to pursue the use of MagneGas in the Co-Combustion of coal burning power plants with $100,000 deposit received to date;
- The Company continued aggressive R&D with the development of a new smaller system design to increase efficiency and reduce costs.
September 30, 2013 Financial Results
For the fiscal quarter ended September 30, 2013, revenues were $125,410, as compared to $201,096 for the same period in 2012. Metal cutting revenue was down at $102,077 for the quarter ended September 30, 2013, as compared to $177,763 for the quarter ended September 30, 2012. This was primarily due to the change in the Company's sales strategy and larger one-time sales in the prior period.
Operating expenses decreased 28% from $2,166,514 for the quarter ended September 30, 2012 to $1,559,799 for the quarter ended September 30, 2013. This decrease was attributed to general cost savings implemented in this quarter. In addition, stock based compensation decreased from $672,099 for the quarter ended September 30, 2012 to $394,727 for the quarter ended September 30, 2013. The Company had an operating loss of $2,098,385 for the quarter ended September 30, 2012, as compared to an operating loss of $1,473,416 for the quarter ended September 30, 2013.
MagneGas now has the following three strategic business lines:
- Industrial Gas Sales
- Gasification & Sterilization Equipment Sales
- (New) Co-Combustion Sales (MagneGas with other Hydrocarbon Fuels)
Industrial Gas Sales
The Company has signed several new fuel distributors for the metal working market, including Accugas and GTW Welding in Michigan, AWISCO in New York, Lake Welding and CO2 gas in Florida and Welders Services Incorporated in Indiana. It also continues to sell fuel through existing distributors in Michigan, Florida and Pennsylvania. In addition, the Company is in various stages of negotiation with several other distributors and large end users and fire departments.
Equipment Sales
The Company has appointed independent brokers from several areas of the world for equipment sales and is in various stages of negotiation with groups from South Korea, Australia, Brazil, Costa Rica and Italy for the sale of equipment. The first sale as a result of these efforts occurred on August 23, 2013 when we entered into a definitive agreement with a group from the Central Asian country of Kazakhstan to supply them with a mini test refinery for $500,000 which they plan to use to test various liquid wastes. They have paid $276,000 towards this purchase.
Co-Combustion Sales
The Co-Combustion of MagneGas fuel with hydrocarbon exhaust such as that from coal burning power plants shows an increase in heat with a reduction in final emissions. The Company now has several simultaneous projects in three different countries for this market, both with coal and other hydrocarbon fuels. We are currently conducting independent testing through a major laboratory in the United States associated with a large power company. In addition, we have signed a Memorandum of Understanding with a confidential third party and have received a $100,000 deposit to form a joint venture to pursue this market.
The MagneGas IR App is now available for free in Apple's App Store for the iPhone or iPad http://bit.ly/AfLYww and at Google Play http://bit.ly/Km2iyk for Android mobile devices.
To be added to the MagneGas investor email list, please email [email protected] with "MNGA" in the subject line.
About MagneGas Corporation
Founded in 2007, Tampa-based MagneGas Corporation (NASDAQ: MNGA) is the producer of MagneGas™, a natural gas alternative and metal working fuel that can be made from certain industrial, municipal, agricultural and military liquid wastes following the receipt of appropriate governmental permits.
The Company's patented Plasma Arc Flow™ process gasifies liquid waste, creating a clean burning hydrogen based fuel that is essentially interchangeable with natural gas. MagneGas™ can be used for metal working, cooking, heating, powering bi fuel automobiles and more. For more information on MagneGas, please visit the Company's website at www.MagneGas.com.
FORWARD-LOOKING STATEMENTS
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 new ethylene glycol to produce fuel until proper permits to process used liquid waste have been obtained.
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.
| MagneGas Corporation |
||||||||
| Balance Sheets |
||||||||
| September 30, |
December 31, |
|||||||
| 2013 |
2012 |
|||||||
| (Unaudited) |
(Audited) |
|||||||
| Assets |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ |
579,098 |
$ |
1,470,642 |
||||
| Accounts receivable, net of allowance for doubtful accounts of $77,887 and $61,792, respectively |
111,652 |
119,207 |
||||||
| Inventory, at cost |
1,816,283 |
961,984 |
||||||
| Prepaid and other current assets |
138,677 |
106,600 |
||||||
| Total Current Assets |
2,645,710 |
2,658,433 |
||||||
| Property and equipment, net of accumulated depreciation of $828,376 and $448,302, respectively |
6,071,145 |
7,193,371 |
||||||
| Intangible assets, net of accumulated amortization of $236,329 and $199,978, respectively |
490,671 |
527,022 |
||||||
| Investment in joint ventures |
490,410 |
490,410 |
||||||
| Security deposits |
8,901 |
2,151 |
||||||
| Total Assets |
$ |
9,706,836 |
$ |
10,871,387 |
||||
| Liabilities and Stockholders' Equity |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ |
164,163 |
$ |
483,688 |
||||
| Accrued expenses |
118,861 |
95,856 |
||||||
| Deferred revenue and customer deposits |
163,331 |
233,330 |
||||||
| Customer Deposits |
293,985 |
0- |
||||||
| Total Current Liabilities |
740,341 |
812,874 |
||||||
| Total Liabilities |
740,341 |
812,874 |
||||||
| Stockholders' Equity |
||||||||
| Preferred stock: $0.001 par; 10,000,000 authorized; 1,000,000 issued and outstanding |
1,000 |
1,000 |
||||||
| Common stock: $0.001 par; 900,000,000 authorized; 23,109,109 and 20,042,614issued and outstanding, respectively |
23,109 |
20,043 |
||||||
| Additional paid-in capital |
25,663,815 |
22,284,841 |
||||||
| Issued and unearned stock compensation |
(13,333) |
|||||||
| Accumulated deficit |
(16,721,429) |
(12,234,039) |
||||||
| Total Stockholders' Equity |
8,966,495 |
10,058,512 |
||||||
| Total Liabilities and Stockholders' Equity |
$ |
9,706,836 |
$ |
10,871,387 |
||||
The accompanying notes are an integral part of the financial statements.
| MagneGas Corporation |
||||||||||||||||
| Statements of Operations |
||||||||||||||||
| (Unaudited) |
||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||||||||
| Revenue: |
$ |
125,410 |
$ |
201,096 |
$ |
391,698 |
$ |
522,052 |
||||||||
| Direct costs, metal cutting |
84,994 |
133,616 |
235,032 |
316,824 |
||||||||||||
| 40,416 |
71,240 |
156,666 |
137,748 |
|||||||||||||
| Operating Expenses: |
||||||||||||||||
| Selling, General and Administration |
954,002 |
1,313,718 |
2,894,629 |
3,000,400 |
||||||||||||
| Investor Relations |
38,059 |
49,193 |
119,704 |
84,475 |
||||||||||||
| Stock-based compensation |
394,727 |
672,099 |
1,180,021 |
1,699,622 |
||||||||||||
| Research and development |
59,622 |
71,875 |
75,733 |
185,748 |
||||||||||||
| Depreciation and amortization |
113,390 |
108,822 |
420,289 |
278,079 |
||||||||||||
| Total Operating Expenses |
1,559,799 |
2,166,514 |
4,690,376 |
5,163,849 |
||||||||||||
| Operating Income (Loss) |
(1,519,383) |
(2,099,034) |
(4,533,710) |
(4,958,621) |
||||||||||||
| Other Income and (Expense): |
45,964 |
45,964 |
||||||||||||||
| Interest |
3 |
649 |
356 |
(379) |
||||||||||||
| Total Other Income (Expense) |
45,967 |
649 |
46,320 |
(379) |
||||||||||||
| Net Income (Loss) before tax benefit |
(1,473,416) |
(2,098,385) |
(4,487,390) |
(4,959,000) |
||||||||||||
| Provision for Income Taxes |
- |
|||||||||||||||
| Net Income (Loss) |
$ |
(1,473,416) |
$ |
(2,098,385) |
$ |
(4,487,390) |
$ |
(4,959,000) |
||||||||
| Net Loss per share: |
||||||||||||||||
| Basic and diluted |
$ |
(0.06) |
$ |
(0.11) |
$ |
(0.21) |
$ |
(0.28) |
||||||||
| Weighted average common shares: |
||||||||||||||||
| Basic and diluted |
22,920,592 |
19,124,100 |
21,311,007 |
17,410,423 |
||||||||||||
SOURCE MagneGas Corporation
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