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PRIVATE AND CONFIDENTIAL
PRIVATE AND CONFIDENTIAL2
Disclaimer: Forward Looking Statements
• This presentation includes forward-looking statements within the meaning of Section 27-A ofthe Securities Act of 1933, and Section 21-E of the Securities Exchange Act of 1934.
• Such statements include declarations regarding the intent, belief, or current expectations ofthe company and its management.
• Prospective investors are cautioned that any such forward-looking statements are notguarantees of future performance, and involve a number of risks and uncertainties that canmaterially affect actual results as identified from time to time in the Company’s Reports.
• Forward looking statements provided herein as of a specified date are not hereby reaffirmedor updated.
Cautionary Statement Regarding Forward-Looking Statements
PRIVATE AND CONFIDENTIAL
• Founded in 2007 by world-renowned Harvard and MIT physicist
• MagneGas™ is currently sold as a cost effective, better performing replacement for acetylene in the $5 Billion Metal Working Market
• Proprietary Plasma Arc Flow™ refining system produces the hydrogen-based fuel called MagneGas™ from feedstock (new anti-freeze is the preferred input for metal working fuel)
• MagneGas™ fuel is interchangeable with natural gas, propane and acetylene in the metal working and industrial vehicle markets
• Company holds U.S. patents for MagneGas™ and Plasma Arc Flow™technologies; latest patent issued in 2010
• Over the long term, MagneGas hopes to become, among other things, the world’s premier metal cutting fuel and the permanent replacement for acetylene
3
Company ProfileMagneGas™: A Patented Fuel made from a Patented Process
Dr. Ruggero Santilli, Chairman and Chief Scientist• Former Harvard and MIT Professor of physics and applied mathematics• Nominated for Nobel Prizes in physics and chemistry• Dr. Santilli received numerous DOE grants to research and develop new, chemically unique, clean fuel alternatives;
MagneGas is the end result of this research• Renowned for broadening Quantum Mechanics theory to predict new, clean energies• 2009 winner of the “Gold Prize Mediterraneo” for Science and Technology
Ermanno Santilli, Chief Executive Officer• Recently appointed CEO after founding MagneGas Europe in 2010, overseeing all international business development for
MagneGas• Spent 15 years with Fortune 500 brands such as Club Car, Bobcat, Thermo King and Trans at Ingersoll Rand,• BS from Boston College and MBA from Indiana University
Luisa Ingargiola, Chief Financial Officer• Former Budget and Expense Manager for MetLife, managing $30 MM annual budget• Previously an Investment Advisor for Boston Capital Partners• BA from Boston University, MBA from the University of South Florida
Scott Wainwright, President• Previously founded and served as CEO of a 30-employee real estate investment firm, growing it quickly to profitability• Founded and served as CEO of Future Marketing, Inc., servicing leading auto industry brands
4PRIVATE AND CONFIDENTIAL
Management TeamMagneGas technology developed by Dr. Ruggero Santilli over 30 years of research in clean fuel technology
Marc Cuffaro, Executive VP of Business Development• Has 27 years of experience as a seasoned business developer at AOL, Nextel, and Computer Sciences• Specialized in proprietary application development totaling $200 million in annual revenue.
Jack Armstrong, Executive VP of Strategic Alliances• 20 years of Capital Markets experience at Piper Jaffray, ThinkEquity Partners and Northland Capital Markets.• At Northland, Jack assisted companies in strategy and helped raise an aggregate of over $5 billion during his career.
John Pace, Executive VP of Marketing• Twenty plus year marketing veteran and one of the three Co-Founders of Ideal Image Development Corporation.• Launched Ideal Image's national franchise campaign and set multiple sales records for a first year start-up company.
5PRIVATE AND CONFIDENTIAL
Strengthening Leadership in 2012In April 2012, MagneGas Added Key Leadership to Effectively Execute Their Growth Strategy
New Independent Board Members
Jacques Kerrest, Board of Directors and Audit Committee• Formerly board member of Elephant Talk Communications
(NYSE:ETAK); and CKX, Inc..• Previously served as CFO of NASDAQ listed ActivIdentity
and Virgin Media, as well as NYSE-listed Equant, Inc.,Harte-Hanks, Inc. and Chancellor Broadcasting
Kevin Pollack, Board of Directors and Audit Committee• Managing Director at Paragon Capital, a private investment
firm focused on investing in U.S.-listed companies.• Currently serves as President of Short Hills Capital LLC,
providing a range of advisory services to investors, assetmanagers, institutions and companies
• Previously worked as an investment banker as well as asecurities attorney focused on corporate finance and M&A.
PRIVATE AND CONFIDENTIAL6
• Electrodes are submerged in liquid waste and electricity is fired between them
• The liquid breaks down to the atomic level, MagneGas TM bubbles to the surface for collection
• The refinery runs quietly, completely sealed environment, emits no odor or noise pollution
• Refinery has small footprint (~200 sq. ft.), mobility and ease of installation
• Patented technology based on over 30 years of scientific research by Dr. Santilli
The patented Plasma Arc Flow™ Refinery gasifies various feedstocks into MagneGas™(Anti-freeze is the preferred input for metal working; the Refinery can also process sewage, sludge)
Plasma Arc Flow TM Refining Systems
MagneGas System
PRIVATE AND CONFIDENTIAL
Welders report that MagneGasTM cuts cleaner and faster, produces higher quality cuts with a narrowerkerf1, less slag, no top edge rollover and a smaller heat affected zone. [Source: Welding Journal]
Our Revolutionary Fuel Product
1Definition: the width of the groove made by the torch.
7
• Large End Market Opportunity - Currently produced for the $5 Billion metalworking market, as a replacement for acetylene, from a feedstock of virgin ethylene glycol (automotive antifreeze); Can also be refined from other liquids;
• Cost Effective in Metalworking - Acetylene cylinders are only deemed 80% usable. MagneGas™ cylinders are 100% usable and are sold at a 20%-30% discount to Acetylene;
• Cuts Faster and Burns Hotter - MagneGas™ concentrates heat at the precise point of the cut, creating faster, higher quality cuts than acetylene every time thus improving the performance of equipment and productivity of employees;
• Cuts Cleaner - MagneGas™ can be used indoors with which the Company believes has lower toxicity than Acetylene; actually emits 12.5% oxygen;
MagneGasTM Fuel
PRIVATE AND CONFIDENTIAL
1) It’s Less Expensive• Only 80% of Acetylene cylinders usable
– MagneGasTM at 100%• A distribution partner estimates
Acetylene costs have risen 50-60% over the last 5 years1
2) It’s Faster • BTUs directed, not dispersed – target
area heats more quickly3) It’s Cleaner
• Company believes burns cleaner than fossil fuel – actually emits 12.5% oxygen
The “Hottest” Trend in Metal Working
8
MagneGas™ at Work
MagneGas™SpecsFlame temperature: has been independently
tested at over 6,000°F
Attributes Acetylene MagneGas
Slag Significant Little to None
Top Edge Rollover Significant None
Soot Significant None
Noxious/Harmful Fumes Significant Hazard Minimal (yields 12% oxygen)
Pooling if Leaked Significant Hazard None (lighter than air)
Porous Filler / Stabilizer 20% by Volume None
Useable Gas in Cylinder 80% 100%
Note 1: Price increase estimate according to J&M Acetylene Manufacturing Co.
MagneGasTM is a Triple Threat to the $5 Billion Global Acetylene Market
PRIVATE AND CONFIDENTIAL9
Model: Sell Fuel Retail Direct to FloridaEnd Users for Metal Working
Execution
• Received DOT permit to deliver directto customers within Florida
• Local direct sales at retail prices
• Several large end users alreadycustomers
• Large pipeline of additional customerswaiting
Model: Sell fuel wholesale toRegional Gas Distributors in variousstates
Execution
• Install MagneGas refineries to workas regional filling stations withinexisting fuel distributors
• Partner with distributors – weprovide fuel, they providecustomers and distributionnetworks
• Current partnerships in Florida,Alabama, Louisiana, Michigan, andPennsylvania
MagneGas™Retail
Platform
Domestic Distribution
MagneGas™WholeSalePlatform
Model: Build refineries for exclusiveuse by a single customer, targetinglarge scrap yards and demolitioncompanies.
Execution
• Install mobile MagneGas refinerieson-site at scrap yards or demolitionsites.
• Demand will be instant. Gas will bepumped directly to torches toeliminate need for cylinders.Negotiate metered sale price.
• Any excess capacity not used bythe individual customer would bebottled and sold to other localdistributors or retail customers.
MagneGas™On-Site Platform
Getting our Revolutionary Fuel to Market in Three Ways
PRIVATE AND CONFIDENTIAL
LVI Services Inc., one of the nation’s largest demolition companies, announces purchasing of MagneGas for two of its Florida demolition locations and is in discussions for similar projects nationwide. MagneGas™ was chosen after demonstrating to be a faster, safer and cleaner performing metal working fuel than gases currently used by LVI.The Company believes its validation by, and strategic relationship with, LVI will be integral to its future growth in the metal working market.
MagneGas’ Recent Business Catalysts
10
LVI Services Inc. Begins Purchasing from MagneGas
“…there is no other gas on the planet that can cut some of these very large castings, we have found that only MagneGas can," - Project Manager at LVI
MagneGas has completed over 18 months of extensive testing with GM and its union representatives.GM is currently using the fuel at their training facility in Grand Blanc and is considering eliminating acetylene and propane in favor of MagneGas for metal working and forklift fuel.
General Motors Concludes Testing and Begins Purchasing
MagneGas
“We are always in pursuit of technologies that enhance quality and efficiency while also performing well on a holistic business case. In its current state, this technology does just that. We're working closely with MagneGas to discuss
possible future applications with potential to reduce our environmental impact.” - Manager of waste-reduction efforts at GM
PRIVATE AND CONFIDENTIAL
MagneGas’ Recent Business Catalysts
11
"After extensive testing, we determined MagneGas™ exceeded our expectations with its superior metal cutting properties, reduced secondary smoke while also increasing our savings on operating costs.”-
RJ Torching President
Military Contract Potential through Edison Welding Supply Testing
Edison Welding Supply is currently testing MagneGas for the U.S. Navy in theuntapped pacific NW market.The Company recently received verbal notice it has made the next round of testing.
RJ Torching, Inc. To Place MagneGas Refinery On-Site
RJ Torching entered into an agreement with the Company to provide MagneGas™fuel for metal cutting exclusively at recycling facilities in Flint, MI.New business model will include installation of a MagneGas refinery on-site and gaswill be pumped directly to torches reducing up front costs and ramping up productionat a much higher rate do to instant demand and usage.
Expansion to Latin America with $2.7 MM Purchase Order for
300Kw Refinery from Clear Sky Energy of Mexico
MagneGas has sold a 300Kw unit for $2.7 MM, with an option to purchase anadditional 5 refineries. MNGA will receive a 5% royalty from all related grossrevenues.Clear Sky will install the refinery at its Monterrey, Mexico facility and serve as theexclusive distributor for MNGA in Mexico, and non-exclusive distributor in LatinAmerica.
"We are impressed with the fuel's ability to cut metal effectively, quickly and in an environmentally friendly way and look forward to working with the company to expand its international customer
base.“ – President of Clear Sky Energy
Drastically increase the amount of refineries and cylinders in rotation in the U.S. market to fulfill current and future
demand increases
Greatly expand sales efforts and strengthen influential relationships with key customers and distributors in order
to develop additional strategic partnerships
Gain significant market share in the multi-billion dollar metal working fuel market, displacing acetylene, propane
and natural gas
Global media campaign through IR firm KCSA to increase brand awareness of MagneGas as the world’s preferred
metal working fuel
Leverage academic ties to further validate and improve proprietary technology
PRIVATE AND CONFIDENTIAL
MagneGas Growth Strategy
12
Management’s Goal is to Make MagneGas the
World’s Preferred Metal Working Fuel
MagneGas’ Strategic Initiatives are Underway
PRIVATE AND CONFIDENTIAL
MagneGas’ Recent Financing Developments
13
Shipped 300 Kw refinery to Detroit, increasing production capacity by 100%.Added 2,000 cylinders for distribution across the U.S., a 400% increase in the total amount in rotation.Leased operating space and began production and sale to distributors in MI.
$3.1 MM Financing Closed in November 2011
MagneGas has executed well off it’s recent financings, creating a significant increase in production capacity and adding 5,000 cylinders available for rotation while solidifying its management team
Finalizing construction of 5th refinery, and began fabrication of three new mobile refineries. Designed a new, more mobile version, of the 300Kw Refinery to be used for future units.Added 3,000 additional cylinders for distribution across the U.S.,Hired 3 key executives to solidify growth platform with additions in sales, business development and operations.Increased capacity for ramped up fabrication.
$3.9 MM Financing Closed in April 2012
MagneGas™ is Creating Value with Recent Financings
* Raised $5.9 MM in August 2012 with proceeds going towards working capital and expansion in metal cutting market
PRIVATE AND CONFIDENTIAL14
1Source: IbisWorld, Company Estimates2Assumes production at full capacity3Source: U.S. Natural Gas Vehicle Market, Clean Energy
Metal-Working Market – Immediate • Estimated $5.0 billion global market size ($1.5 billion U.S. market)1,
• The existing fuels emit highly toxic emissions • Limited regulatory barriers to entry, sales underway ($7 unit cost2, $24
sale price)• Significantly cheaper than acetylene; 1 cylinder of acetylene is selling
for $35 to $50 compared to $20 - $35 per cylinder for MagneGas™
Industrial Vehicles Market – Medium Term• Estimated $2 billion market, and growing3
• Company believes MagneGas™ exceeds all EPA standards and actually emits substantial oxygen
• Vehicles already in service at Company HQ
MagneGas™ Initially Targeting Fuel Sales in Two Sizeable Markets
MagneGas Fuel Target Markets
Growing Multi-National Customer Base
“Not only is MagneGas™ cost competitive, it is a greener alternative than what we are currently using for metal working and it has exceeded our expectations in terms of its metal cutting performance. Our commitment to the environment made the decision to
switch to MagneGas the right choice for us.“ – GM of OneSteel’s U.S. Operations
PRIVATE AND CONFIDENTIAL
MagneGas™ has a Growing Client List of Top Tier Metal Working Companies and Gas Distributors with both Domestic and International Focus
PRIVATE AND CONFIDENTIAL16
Economics of 300Kw Wholesale Refinery
As MagneGas gains market share, management believes both demand and sale price
will continue to rise while many operating expenses
will be reduced from economies of scale
These results are based on what management believes are conservative pricing and cost
assumptions
Assumed 300Kw Wholesale Refinery Performance at 85.0% Capacity
MONTHLY ANNUAL
Gas Sales Revenue $153,000 $1,836,000Direct Cost of Manufacturing $53,363 $640,360
Gross Profit $99,637 $1,195,640Gross Margin 65.1% 65.1%
Net Income 67,078.33 804,940.00$ Net Margin 43.8% 43.8%
Cylinder Cost and Production at 85.0% CapacityTotal Direct Cost / Cylinder $6.98 Cylinders Produced and Sold Annually 91,800Note: Assumes $20 / cylinder sale price at full capacity of refinery, based on management estimates
Scrap Yards – The RJ Torching Model
"After extensive testing, we determined MagneGas™ exceeded our expectations
with its superior metal cutting properties, reduced secondary smoke while also increasing our savings on operating
costs."- RJ Torching President
• Sizeable Market – The Company estimates there are 8900 scrap yardsin the U.S., 10% of which use more than $1 MM in cutting fuel every year.
• On-Site Refinery Creates Improves Bottom Line – Large Scrapyards like RJ Torching see the value in placing a MagneGas refinery onsite:
• Reduction in Downtime Between Cylinders• Faster and More Efficient Cutting• Less Time Between Cutting and Handling• Need for Waste Removal Addressed• Minimizes EPA Fine Risk from Emissions
• MagneGas Retains Ownership of Machines – Machines connecteddirectly to torches have the same capacity yet use far fewer cylinders andrequire less overhead, improving both ROI and margins for MagneGas.
A 10% share of the targeted scrap yard market (1% overall) creates revenue opportunity of over $89 MM annually
Total Estimated U.S. Scrap Yards 8,900
Target Market
Scrap Yards using >$1MM in Cutting Fuel 890
MagneGas Penetration of $1MM+ Market 10%
Minimum Implied Revenue ($MM) $89.0
Annual Scrap Yard Revenue Opportunity
PRIVATE AND CONFIDENTIAL
MagneGas™ has a Significant Opportunity in the Domestic Scrap Yard Business
PRIVATE AND CONFIDENTIAL18
Plasma Arc Flow™ Refinery units come in a range of sizes and through-put capacities and are built to fit flatbed trailers
allowing for simple transportation and a small installed footprint
MagneGas Refineries – International Markets
MagneGas recently announced a purchase agreement for a single refinery with an option for five more at an initial sale price of $2.7 MM.
Note: Assumes $30 / cylinder sale price internationally
Sale Price for a Single 300Kw Refinery $2,700,000
Est. Fabrication and Set-Up Cost $750,000
Gross Royalty (%) 5%
Annual Royalty per Refinery at Capacity $137,700
MagneGas Refinery Sale Summary
Equipment Sales – International Focus on Selling Refineries and Receiving Royalties on Gas Sales
PRIVATE AND CONFIDENTIAL
August 14, 2012
Basic Common Stock Issued and Outstanding 19,827,939Class A Preferred Shares Outstanding ($.001 Par Value; No Coupon; Voting Rights)
1,000,000
Stock Options (@ $1.50) (employee owned, vesting) 2,910,000
Stock Warrants (@$2.50) 15,000
Stock Warrants (@$3.00) (November 2011 PIPE Investors) 1,980,438
Stock Warrants (@$4.00) (March 2012 PIPE Investors) 1,067,689
19
MagneGas Recently Executed a Reverse Stock Split of 10:1Note: 9,982,101 Shares held by insiders are subject to a 90 day lock-up period after the effective date of the prospectus.
Public Float Roughly 42.3% (excluding warrants and options)
Capital Structure
PRIVATE AND CONFIDENTIAL20
Balance Sheet
MagneGas has a clean balance sheet with zero debt
MagneGas Balance Sheet Summary for Years Ending, June 30,2012
December 31, 2011
ASSETSCash and equivalents $2,022,713 $1,429,412Total current assets $2,945,536 $2,107,954
TOTAL ASSETS $8,108,564 $6,191,737LIABILITIES AND STOCKHOLDERS EQUITY
Total current liabilities $949,546 $966,822TOTAL LIABILITIES $949,546 $966,822
Total stockholders' equity $7,159,018 $5,224,915TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,108,564 $6,191,737
PRIVATE AND CONFIDENTIAL21
Patented, Sustainable, Disruptive Technology
and Fuel Source
•Chairman and Chief Scientist Dr. Santilli nominated for Nobel Prizes in Physics and Chemistry; former Harvard and MIT professor who developed MagneGas technology over 30+ years of research
•Chairman and Chief Scientist Dr. Santilli nominated for Nobel Prizes in Physics and Chemistry; former Harvard and MIT professor who developed MagneGas technology over 30+ years of research
World Class Technology Team
•Disruptive technology set to displace current fuel gases such as acetylene and propane in $5 billion metal cutting industry
•Disruptive technology set to displace current fuel gases such as acetylene and propane in $5 billion metal cutting industry
Immediate Commercial Applications
•The Company earns revenue from clean fuel sales (domestic) and big-ticket sales of equipment and royalties (international)
•The Company earns revenue from clean fuel sales (domestic) and big-ticket sales of equipment and royalties (international)
Multiple Revenue Channels
Rapid Growth Potential •MagneGas expects to grow revenue through rapid growth in production and sales of MagneGas in the acetylene and forklift truck markets
•MagneGas expects to grow revenue through rapid growth in production and sales of MagneGas in the acetylene and forklift truck markets
•Patented technology recycles anti-freeze (and other feedstock), producing a patented hydrogen-based fuel called MagneGas
•Patented technology recycles anti-freeze (and other feedstock), producing a patented hydrogen-based fuel called MagneGas
Investment Highlights
PRIVATE AND CONFIDENTIAL22
CONTACTLuisa Ingargiola, CFO
MagneGas Corporation727-934-3448
Luisa.ingargiola@magnegas.com
COMPANY INFORMATION150 Rainville Road
Tarpon Springs, FL 34689www.magnegas.com
Contact
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