UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2009
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ______________ to ______________
Commission File No.000-51883
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MagneGas Corporation
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(Exact name of Registrant as specified in its charter)
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Delaware
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26-0250418
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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150 Rainville Rd Tarpon Springs, FL
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34689
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(Address of principal executive offices)
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(Zip Code)
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(Former name, former address, if changed since last report)
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Tel: (727) 934-3448
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(Issuer’s telephone number)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer. o
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Accelerated filer. o
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Non-accelerated filer. o
(Do not check if a smaller reporting company)
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Smaller reporting company. þ
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2008: N/A.
Number of the issuer’s Common Stock outstanding as of March 29, 2010: 106,054,395
Documents incorporated by reference: None.
Transitional Small Business Disclosure Format (Check One): Yes o No þ
TABLE OF CONTENTS
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Page
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Part I
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Unresolved Staff Comments
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Submission of Matters to a Vote of Security Holders
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Management’s Discussion and Analysis of Financial Condition and Results of Operation
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Quantitative and Qualitative Disclosures about Market Risk
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Financial Statements and Supplementary Data
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Directors and Executive Officers and Corporate Governance.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Certain Relationships and Related Transactions, and Director Independence.
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Principal Accounting Fees and Services
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Exhibits, Financial Statement Schedules
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PART I
ITEM 1. BUSINESS
Background Information
MagneGas Corporation (the “Company”) was organized in the state of Delaware on December 9, 2005. The Company was originally organized under the name 4307, Inc, for the purpose of locating and negotiating with a business entity for a combination. On April 2, 2007 all the issued and outstanding shares of 4307, Inc. were purchased and the Company name was changed to Magnegas Corporation. MagneGas Corporation.
On December 28, 2008 the Company acquired all relevant patent and intellectual property rights including domain names, manufacturing drawings and trademarks for the MagneGas technology for the United States and continues to operate under a license for North, South and Central America and the Carribean. The Company is seeking to expand to various regions of the world (with the exception of the European Continent and Africa) through Joint Venture partnerships for manufacturing and distribution of the Magnegas equipment and fuel.
Business Operations
The Company’s operating plan and mission is to provide services in cleaning and converting contaminated liquid waste. A process has been developed which transforms contaminated waste through a proprietary incandescent machine. The result of the product is to carbonize waste for normal disposal. A byproduct of this process is to produce a green fuel alternative to natural gas. The patented proprietary technology is owned by the Company.
Business Development
Through the course of our business development, we have acquired contracts with regional suppliers for our metal cutting biogas. Additionally, we are in various stages of negotiation with several companies with interest in purchasing our Plasma ArcFlow equipment and licenses for their use and have received two deposits towards the purchase of equipment
Employees
We presently have no full-time employees and one part-time employee. We currently have leased employees and independent technicians perform production and other duties, as required.
Dr. Santilli, our Chief Scientist and key employee, has provided services in exchange for stock. Dr. Santilli declined to receive payments for salary until the Company generated meaningful revenue and profits. At the current time, we believe that the Company has past the business development stage; therefore we have commenced accruing salaries for Dr. Santilli at $120,000 per annum.
Richard Connolly, our President, has provided services under consulting contract. Additionally, he has received compensation in the form of stock.
We currently have no other key employees.
ITEM 1A. RISK FACTORS
We have a limited operating history that can be used to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays that we may encounter because we are a small business. As a result, we may not be profitable and we may not be able to generate sufficient revenue to develop as we have planned.
Our ability to achieve and maintain profitability and positive cash flow will be dependent upon:
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Management’s ability to maintain the technology skills for our conversion services;
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The Company’s ability to keep abreast of the changes by the government agencies and law;
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Our ability to attract customers who require the services we offer; and
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Our ability to generate revenues through the sale of our services to potential clients who need our services.
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Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating sufficient revenues to cover our expenses. We cannot be sure that we will be successful in generating revenues in the future. Failure to generate sufficient revenues will cause us to go out of business and any investment in our Company would be lost.
Managing a small public company involves a high degree of risk. Few small public companies ever reach market stability and we will be subject to oversight from governing bodies and regulations that will be costly to meet. Our present officers and directors do not have any experience in managing a fully reporting public company so we may be forced to obtain outside consultants to assist with our meeting these requirements. These outside consultants are expensive and can have a direct impact on our ability to be profitable. This will make an investment in our Company a highly speculative and risky investment.
While the Company is attempting to disclose all of the potential risks associated with an investment in the Company, there can be no assurance that all of the risks are visible to management. Events occurring in the future may be additional risks to an investment in the Company which are currently unforeseen.
We will require financing to achieve our current business strategy and our inability to obtain such financing could prohibit us from executing our business plan and cause us to slow down our expansion of operations.
We will need to raise additional funds through public or private debt or sale of equity to achieve our current plan of operations. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. We will require additional funds estimated at approximately $10,000,000 in order to significantly expand our business as set forth in our plan of operations. These funds may not be available or, if available, will be on commercially reasonable terms satisfactory to us. We may not be able to obtain financing if and when it is needed on terms we deem acceptable. The additional funds would be utilized for the manufacturing of additional PlasmaArcFlow processors, which byproducts would be marketed to the target market end users.
If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms may delay the execution of our plan to expand our operations.
We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays that we may encounter because we are a small company. As a result, we may not be profitable and we may not be able to generate sufficient revenue to develop as we have planned.
We were incorporated in Delaware in December of 2005. We have no significant assets or financial resources. The likelihood of our success must be considered in light of the expenses and difficulties in converting liquid wastes into a clean biogas, recruiting and keeping clients and obtaining financing to meet the needs of our plan of operations. Since we have a limited operating history we may not be profitable and we may not be able to generate sufficient revenues to meet our expenses and support our anticipated activities.
Failure to comply with government regulations will severely limit our sales opportunities and future revenue
Failure to obtain operating permits, or otherwise to comply with federal and state regulatory and environmental requirements, could affect our abilities to market and sell the PlasmaArcFlow system and could substantially reduce the value of your investment and the market price of our common stock.
We and our customers may be required to comply with a number of federal, state and local laws and regulations in the areas of safety, health and environmental controls. In as much as we intend to market the PlasmaArcFlow system internationally, we will be required to comply with laws and regulations and, when applicable, obtain permits in those other countries.
We can not be certain that required permits and approvals will be obtained; that new environmental regulations will not be enacted or that if they are our customers and we can meet stricter standards of operation or obtain additional operating permits or approvals.
Our patented technology is unproven on a large-scale industrial basis and could fail to perform in an industrial production environment.
The technologies which we are pursuing for MagneGas production from liquid waste have never been utilized on a large-scale industrial basis. All of the tests which we have conducted to date with respect to our technologies have been performed on limited quantities, and we cannot assure you that the same or similar results could be obtained on a large-scale industrial basis. We have never utilized these MagneGas technologies under the conditions or in the volumes that will be required on a large scale and cannot predict all of the difficulties that may arise. In addition, our technology has never operated at a volume level required to be profitable. As our product is an alternative to Natural Gas, the unstable price of Natural Gas will impact our ability to become profitable and to sell cost competitive fuel. It is possible that the technologies, when used, may require further research, development, design and testing prior to implementation of a larger-scale commercial application. Accordingly, we cannot assure you that these technologies will perform successfully on a large-scale commercial basis or that they will be profitable to us or that our fuel will be cost competitive in the market.
Our future success is dependent, in part, on the performance and continued service of Rich Connelly, our President, and Dr. Ruggero Maria Santilli, our CEO. Without their continued service, we may be forced to interrupt or eventually cease our operations.
We are presently dependent to a great extent upon the experience, abilities and continued services of Rich Connelly, our President and Dr. Ruggero Maria Santilli, our CEO. We currently only have an employment agreement with Dr. Santilli and do not have an employment agreement with other officers and directors. The loss of either of their services would delay our business operations substantially.
The success of our business depends, in part, upon proprietary technologies and information which may be difficult to protect and may be perceived to infringe on the intellectual property rights of third parties.
We believe that the identification, acquisition and development of proprietary technologies are key drivers of our business. Our success depends, in part, on our ability to obtain patents, maintain the secrecy of our proprietary technology and information, and operate without infringing on the proprietary rights of third parties. We cannot assure you that the patents of others will not have an adverse effect on our ability to conduct our business, that the patents that provide us with competitive advantages or will not be challenged by third parties, that we will develop additional proprietary technology that is patentable or that any patents issued to us will provide us with competitive advantages or will not be challenged by third parties. Further, we cannot assure you that others will not independently develop similar or superior technologies, duplicate elements of our biomass technology or design around it.
In order to successfully commercialize our proprietary technologies, it is possible that we may need to acquire licenses to, or to contest the validity of, issued or pending patents or claims of third parties. We cannot assure you that any license acquired under such patents would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In addition, we could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party's patents or in defending the validity or enforceability of our patents, or in bringing patent infringement suits against other parties based on our patents.
In addition to the protection afforded by patents, we also rely on trade secrets, proprietary know-how and technology that we seek to protect, in part, by confidentiality agreements with our prospective joint venture partners, employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any such breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.
We have the potential risk of product liability which may subject us to litigation and related costs
Our PlasmaArcFlow system will be utilized in a variety of industrial and other settings, and will be used to handle materials resulting from the user's generation of liquid waste. The equipment will therefore be subject to risks of breakdowns and malfunctions, and it is possible that claims for personal injury and business losses arising out of these breakdowns and malfunctions will be made against us. Our insurance may be insufficient to provide coverage against all claims, and claims may be made against us even if covered by our insurance policy for amounts substantially in excess of applicable policy limits. Such an event could have a material adverse effect on our business, financial condition and results of operations.
Because we are smaller and have fewer financial and other resources than many alternative fuel companies, we may not be able to successfully compete in the very competitive alternative fuel industry.
Fuel is a commodity. There is significant competition among existing fuel producers. Our business faces competition from a number of producers that can produce significantly greater volumes of fuel than we can or expect to produce, producers that can produce a wider range of products than we can, and producers that have the financial and other resources that would enable them to expand their production rapidly if they chose to. These producers may be able to achieve substantial economies of scale and scope, thereby substantially reducing their fixed production costs and their marginal productions costs. If these producers are able to substantially reduce their marginal production costs, the market price of fuel may decline and we may be not be able to produce biogas at a cost that allows us to operate profitably. Even if we are able to operate profitably, these other producers may be substantially more profitable than us, which may make it more difficult for us to raise any financing necessary for us to achieve our business plan and may have a materially adverse effect on the market price of our common stock.
Costs of compliance with burdensome or changing environmental and operational safety regulations could cause our focus to be diverted away from our business and our results of operations to suffer.
Liquid waste disposal and fuel production involves the discharge of potential contaminants into the water and air. As a result, we are subject to complicated environmental regulations of the U.S. Environmental Protection Agency and regulations and permitting requirements of the various states. These regulations are subject to change and such changes may require additional capital expenditures or increased operating costs. Consequently, considerable resources may be required to comply with future environmental regulations. We did not incur any capital expenditures for environmental control in 2008 or 2009 and we do not currently expect to incur material capital expenditures for environmental controls in this or the succeeding fiscal year In addition, our production plants could be subject to environmental nuisance or related claims by employees, property owners or residents near the plants arising from air or water discharges Environmental and public nuisance claims, or tort claims based on emissions, or increased environmental compliance costs could significantly increase our operating costs.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable
ITEM 2. PROPERTIES
We presently lease on a month-to-month basis our principal offices at 150 Rainville Rd, Tarpon Springs, FL 34689 and the telephone number is (727) 934-3448. The property is a commercial property for our production facility with attached office.
ITEM 3. LEGAL PROCEEDINGS
We are not engaged in any litigation, and we are unaware of any claims or complaints that could result in future litigation. We will seek to minimize disputes with our customers but recognize the inevitability of legal action in today’s business environment as an unfortunate price of conducting business.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Price Range of Common Stock
The Company’s common stock is listed on the Over the Counter Bulletin Board ("OTC: BB") under the symbol “MNGA”. The Company received its "Notice of Effectiveness" on October 1, 2008. The Company's stock has commenced trading on the exchange in the fourth quarter of 2008.
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High
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Low
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Fiscal Year 2009
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First quarter ended March 31, 2009
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.15 |
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.04 |
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Second quarter ended June 30, 2009
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.51 |
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.06 |
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Third quarter ended September 30, 2009
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.45 |
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.09 |
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Fourth quarter ended December 31, 2009
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.35 |
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.05 |
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Fiscal Year 2008
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Fourth quarter ended December 31, 2008
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1.01 |
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.001 |
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Approximate Number of Equity Security Holders
On March 29, 2010 the Company's common stock had a closing price quotation of $.22. As of March 29, 2010 there were approximately 211 certificate holders of record of the Company’s common stock.
Dividends
We have not declared or paid cash dividends on our common stock.
Stock Option Grants
We have issued 854,763 warrants to investors as an investment incentive. These warrants have an exercise price range of $.08 to $.21 per common share.
We have issued 340,000 warrants to consultants, exercisable for $ .05 within three years from issuance.
Registration Rights
We have not granted registration rights to the selling shareholders or to any other persons.
ITEM 6. SELECTED FINANCIAL DATA
The following financial data is derived from, and should be read in conjunction with, the “Financial Statements” and notes thereto. Information concerning significant trends in the financial condition and results of operations is contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Selected Historical Data
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December 31,
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December 31,
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2009
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2008
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(audited)
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Total Assets
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1,185,565 |
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728,307 |
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Total Liabilities
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422,059 |
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224,717 |
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Total Stockholders' Equity
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763,506 |
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503,590 |
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Net Working Capital
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(403,941 |
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(217,299 |
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Years Ended
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December 31,
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2009
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2008
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Revenues
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18,564 |
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12,225 |
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Gross Profit
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9,338 |
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1,878 |
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Operating Expenses
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1,260,073 |
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974,856 |
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Net Loss
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(783,738 |
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(977,426 |
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Notice Regarding Forward Looking Statements
The information contained in Item 7 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.
Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Plan of Operations
Due to the current state of the economy and financial markets it is been difficult for the Company to achieve its Plan of Operation, primarily due to lack of capital to finance the Plan. During the next twenty four months, we intend to pursue private equity financing in combination with federal and state grant funding, for up to $10 million in various phases using our shares of common stock and through federal and state funds available for renewable energy as part of the Stimulus program.
Our overall plan of operation is to seek revenue through the sale of Magnegas fuel for use in metal working and various industrial and vehicle applications. In addition, we will seek revenue through the sale of Plasma Arc Flow equipment and services to end users for the purpose of recycling liquid waste and creating a green natural gas alternative. We will conduct research and development for the catalytic liquefaction of MagneGas, the industrial membrane separation of hydrogen and the use of MagneGas as an additive to clean coal exhaust. We plan to manufacture and install pilot refineries to demonstrate the various applications of the technology. These centers will be strategically located throughout our market area and be used to produce fuel and to promote equipment sales. In addition, we will seek world-wide joint venture partnerships for the manufacturing and distribution of Magnegas equipment and fuel. We will also pursue all needed federal, state and local regulatory permits necessary to implement our operational plan.
The current state of the economy and financial markets has made it difficult for us to achieve our past operational plans and the Company can make no assurance that we will achieve our operational plan in the future.
The foregoing represents our best estimate of our current planning, and is based on a reasonable assessment of funds we expect to become available. However, our plans may vary significantly depending upon the amount of funds raised and status of our business plan. In the event we are not successful in reaching our initial revenue targets, additional funds will be required and we would then not be able to proceed with our business plan as anticipated. Should this occur, we would likely seek additional financing to support the continued operation of our business.
The Company has financed its operations primarily through cash generated by the sale of stock through a private offering, the sale of equipment and loans from a majority shareholder. We believe we have sufficient cash to sustain minimal operations for the next twelve months. However, to achieve our operational plan, additional cash will be required. Management plans to increase revenue and obtain additional financing in order to achieve the operational plan outlined above. We have already sold shares to support our continued operations and have received two deposits towards equipment sales. However, completion of our plan of operation is subject to attaining adequate revenue and financing. We cannot assure investors that adequate revenues will be generated.
In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we will require financing to potentially achieve our goal of profit, revenue and growth.
In the event we are not successful in reaching our initial revenue targets, additional funds will be required, and we would then not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we would incur operating losses in the foreseeable future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our services to cover our operating expenses. Consequently, there is doubt about the Company’s ability to continue to operate as a going concern.
As reflected in the audited financial statements, we have an accumulated deficit and have negative cash flows from operations. This raises doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The audited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
At December 31, 2009 the Company had minimal cash resources to meet current obligations. The Company may rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses until operations generate cash flows sufficient to support the on-going business.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. We anticipate that we will require approximately $10,000,000 to fund our plan of operations.
In effort to achieve revenue plans we have been concentrating on selling MagneGas as a metal cutting fuel. We have received firm orders from several entities for the MagneGas produced from non-hazardous waste. We have an additional non-binding letter of intent to process liquid waste based on proposals and our demonstrations. The non-binding letter of intent includes the installation of a plant scale test at a local sewage treatment facility processing sludge. To fund operations, the Company has raised $395,500 in cash proceeds via sales of common stock to date and raised an additional $223,200 in cash proceeds from a shareholder loans since inception. Additionally, to deliver on the metal cutting gas orders we have the commitment of six persons dedicated to the fulfillment of orders and it is headed by a well known industry consultant, whom we have named as president to help develop operating guidelines as well as being instrumental in the marketing and development of our brand offering.
To expand understanding of our efforts and progress in generating revenue:
Metal Working MagneGas Sales: Marketing efforts are being concentrated on industry wholesalers to utilize their established customer base and distribution channels. Our current operations in new facilities (previously disclosed month to month agreement) have been set up for expansion. We estimate current facilities have capacity for 400-500 bottles to be processed per week. Our new facilities allow us the flexibility to ramp up for greater volume, as market interest is anticipated to increase.
In 2009, the Company established relationships with several fuel distributors for the sale of MagneGas in the metal working market. The company has indentified two independent sales representatives to support these relationships. In addition, in February of 2010, the Company received an order for 294 cylinders of MagneGas from a company in Dubai that plans to sell the fuel in the Metal Working market for the surrounding Middle East area We are also negotiating with potential fuel distributors from several countries of the world and regions of the United States. At the time of the filing of this document the Company can make no assurance as to the final outcome of these negotiations.
Letter of Intent: A non-binding letter of intent was agreed, in principal with a local municipality's water treatment facility. Our existing prototype equipment is being modified for the specifics required for this project. At this time we are unable to accurately estimate the volume that will be processed. Upon completion of the 12 month test the contract will be evaluated and subject to renegotiation. No date has been determined when this project is to commence and funding will be required to implement this project as per our plan of operations.
Purchase Order– China
On March 8, 2010, MagneGas Corporation received $950,000 toward a $1,900,000 purchase of a Plasma Arc Flow Refinery from DDI Industries (“DDI”), based in Bejing, China. In addition, DDI signed a Letter of Intent (“LOI”) to acquire the exclusive MagneGasTM Technology and manufacturing rights for the Greater China market.. As compensation DDI would directly invest $2,000,000 in the Company. DDI would create a new China-based Joint Venture company (“MagneGas China”) to house and administer the rights; DDI would seek to take this Joint Venture company public in the Asian market in the future. DDI would grant to MagneGas Corp. 20% of MagneGas China. MagneGas CEO Dr. Ruggero Santilli would receive a full voting seat on the MagneGas China Board of Directors.
Per the terms of the purchase agreement, DDI must inspect and approve the refinery before DDI is obligated to pay the remaining $950,000. However, it may not take possession of the refinery until MagneGas has received this final one-time payment.
Per the terms of the LOI, DDI has until June 30, 2010, with an option to extend the deadline for additional 6 months, to complete at-once and in-full its intended $2,000,000 investment in the Company; if it does not do so before that date the LOI is rendered void and the Company retains exclusive MagneGas Technology and manufacturing rights to the Greater China market (i.e. Mainland China, Taiwan, Hong Kong, Singapore and Macao). Should DDI complete this investment it would also receive a seat on the Company’s Board of Directors.
Results of Operations
For the year ended December 31, 2009 and 2008
Revenues
For the twelve months ended December 31, 2009 and 2008 we generated revenues of $18,564 and $12,225 respectively from our metal cutting fuel sales operations. The increase was due to the continued expansion of customer relationships. We have secured new channels for the distribution of our metal cutting fuel. We have fulfilled initial orders and are receiving repeat orders from multiple customers. To attract and attain new customers we have performed demonstrations and sent samples to prospective accounts. Our facility has been set up to fulfill future anticipated orders.
We have contracted with a company based in the Philippines for the sale of a Plasma Arc Flow unit. We have received the signed contract with a $100,000 deposit. Due to natural weather disasters in the Philippines, the purchasing company has delayed the order. We had not commenced any significant work on the project and therefore have not recognized any revenue associated with the $100,000 deposit. Negotiation has commenced with this company in the Philippines for the restructuring of the sale to included a smaller, less expensive refinery. However, no assurance can be made as to the final outcome of this negotiation.
Operating Expenses
Operating costs were incurred in the amount of $1,260,073 and $968,224 for the twelve months ended December 31, 2009 and 2008, respectively. The increase was attributable to the issuance of common stock for services valued in the amount of $822,714 in 2009 compared to $613,167 in 2008. Additionally, due to public filing requirements, there was an increase in investor relations, advertising fees, and office administration, which was partially off-set by a reduction in accounting and audit fees for 2009.
Net Loss before Provision for Income Taxes
Net losses incurred in all periods presented have been primarily due to the operating costs. The Company incurred net losses of $783,738and $977,426 for the twelve months ended December 31, 2009 and 2008, respectively. The increase in the year over year net loss was due primarily from general and administrative expenses, described above in the operating expense discussion, particularly stock-based compensation. At this time, normal costs of public filing will continue and it is not known when significant revenues will occur to off-set these expenses.
Based on management’s review of current and subsequent events, the Company has recognized probable future tax benefit attributable to the current year loss. During 2009 and the subsequent period, the Company has received payments for commitment to build two Plasma Arc Flow units. Management has determined that the operations have matured from a development stage enterprise to an operating entity. Therefore, the Company has recognized a deferred tax asset (tax benefit) against future income taxes.
Liquidity and Capital Resources
The Company previously financed its operations primarily through cash generated by the sale of stock through a private offering. Subsequent to year end we received deposit, amounting to $950,000, for a Plasma Arc Flow unit. We now believe we can currently satisfy our cash requirements for the next twelve months with our current cash and expected revenues from our sales. However, management plans to raise additional capital through private placement offerings of its stock, in an effort to capitalize on the revenue it has generated, furthering sales and marketing efforts. We cannot assure investors that adequate future revenues will be generated without a constant sales and marketing effort.
We anticipate that, depending on market conditions and our plan of operations, we may incur operating losses in the future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our sales and services to cover our operating expenses and increased sales and marketing efforts. Consequently, there remains doubt about the Company’s future and sustained profitability.
As reflected in the financial statements, the Company was previously considered a development stage and has incurred an accumulated deficit of $2,183,635 and also has a negative cash flow from operations of $219,396 for the current period. Our recent contract, and realization of cash from the contract, gives management belief that future earnings are probable.
At December 31, 2009 the Company had minimal cash and negative working capital resources to meet current obligations. Subsequent receipt of $950,000 from a contract for unit gives the Company adequate financing, through this sale, to sustain operations through the current year.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Management Consideration of Alternative Business Strategies
In order to continue to protect and increase shareholder value management believes that it may, from time to time, consider alternative management strategies to create value for the company or additional revenues. Strategies to be reviewed may include acquisitions; roll-ups; strategic alliances; joint ventures on large projects; and/or mergers.
Management will only consider these options where it believes the result would be to increase shareholder value while continuing the viability of the company.
Recent Accounting Pronouncements
We have reviewed accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. Those standards have been addressed in the notes to the audited financial statement and in our Annual Report, filed on Form 10-K for the period ended December 31, 2008.
Critical Accounting Policies
The Company’s significant accounting policies are presented in the Company’s notes to financial statements for the period ended December 31, 2009 and 2008, which are contained in this filing, the Company’s 2009 Annual Report on Form 10-K. The significant accounting policies that are most critical and aid in fully understanding and evaluating the reported financial results include the following:
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.
Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK
We do not hold any derivative instruments and do not engage in any hedging activities.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements
MagneGas Corporation
(Previously a Development Stage Enterprise)
As of December 31, 2009 and 2008
And for the Years Ended December 31, 2009 and 2008
Contents
|
Financial Statements:
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
| |
|
|
Balance Sheets
|
F-3
|
| |
|
|
Statements of Operations
|
F-4
|
| |
|
|
Statements of Changes in Stockholders’ Equity
|
F-5
|
| |
|
|
Statements of Cash Flows
|
F-6/F-7
|
| |
|
|
Notes to Financial Statements
|
F-8 through F-14
|
Randall N. Drake, C.P.A., P.A.
1981 Promenade Way
Clearwater, FL 33760
727.536.4863
Randall@RDrakeCPA.com
Report of Independent Registered Public Accounting Firm
Board of Directors
MagneGas Corporation
Palm Harbor, Florida
We have audited the accompanying balance sheets of MagneGas Corporation (previously a development stage enterprise) as of December 31, 2009 and 2008 and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009 and 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provided a reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2009 and 2008 and the results of its operations and its cash flows for the year ended December 31, 2009 and 2008 in conformity with accounting principles generally accepted in the United States of America
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in footnote 3 to the financial statements, the Company has generated nominal revenue and has negative cash flows from operations which raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Randall N. Drake, CPA PA
Clearwater, Florida
March 29, 2010
|
MagneGas Corporation
|
|
|
(Previously A Development Stage Enterprise)
|
|
|
Balance Sheets
|
|
| |
|
|
|
|
|
|
| |
|
December 31,
|
|
| |
|
2009
|
|
|
2008
|
|
|
ASSETS
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash
|
|
$ |
7,338 |
|
|
$ |
160 |
|
|
Accounts receivable, net of allowance of $0
|
|
|
2,399 |
|
|
|
2,398 |
|
|
Inventory, at cost
|
|
|
8,381 |
|
|
|
4,860 |
|
| |
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
|
18,118 |
|
|
|
7,418 |
|
| |
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated
depreciation of $375
|
|
|
22,125 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Deferred Tax Asset
|
|
|
472,900 |
|
|
|
- |
|
|
Intangible assets, net of accumulated amortization
|
|
|
672,422 |
|
|
|
720,889 |
|
|
TOTAL ASSETS
|
|
$ |
1,185,565 |
|
|
$ |
728,307 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDER'S DEFICIT
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
94,577 |
|
|
$ |
109,739 |
|
|
Accrued expenses
|
|
|
77,395 |
|
|
|
15,000 |
|
|
Deferred revenue
|
|
|
100,000 |
|
|
|
- |
|
|
Due to affiliate
|
|
|
10,000 |
|
|
|
10,000 |
|
|
Note payable to related party
|
|
|
140,087 |
|
|
|
89,978 |
|
|
TOTAL LIABILITIES
|
|
|
422,059 |
|
|
|
224,717 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
|
Preferred stock: $0.001 par; 10,000,000 authorized; 2,000
issued and outstanding
|
|
|
2 |
|
|
|
2 |
|
|
Common stock: $0.001 par; 900,000,000 authorized;
105,954,395 and 99,444,833 issued and outstanding
|
|
|
105,954 |
|
|
|
99,445 |
|
|
Additional paid-in capital
|
|
|
2,909,518 |
|
|
|
1,892,373 |
|
|
Unearned stock compensation
|
|
|
(68,333 |
) |
|
|
(88,333 |
) |
|
Accumulated deficit
|
|
|
(2,183,635 |
) |
|
|
(1,399,897 |
) |
|
TOTAL STOCKHOLDERS' EQUITY
|
|
|
763,506 |
|
|
|
503,590 |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$ |
1,185,565 |
|
|
$ |
728,307 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
|
|
|
|
MagneGas Corporation
|
|
|
(Previously A Development Stage Enterprise)
|
|
|
STATEMENTS OF OPERATIONS
|
|
|
For the Years Ended December 31, 2009 and 2008
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
Years Ended months ended
|
|
| |
|
December 31,
|
|
| |
|
2009
|
|
|
2008
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Revenue
|
|
$ |
18,564 |
|
|
$ |
12,225 |
|
| |
|
|
|
|
|
|
|
|
|
Cost of Sales
|
|
|
9,226 |
|
|
|
10,347 |
|
| |
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
9,338 |
|
|
|
1,878 |
|
| |
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
31,214 |
|
|
|
8,003 |
|
|
Selling
|
|
|
38,405 |
|
|
|
31,296 |
|
|
Professional: technical
|
|
|
22,958 |
|
|
|
64,765 |
|
|
Professional: legal and accounting
|
|
|
81,265 |
|
|
|
195,636 |
|
|
Rent and overhead
|
|
|
66,904 |
|
|
|
46,051 |
|
|
Office and administration
|
|
|
74,277 |
|
|
|
1,501 |
|
|
Investor Relations
|
|
|
44,536 |
|
|
|
4,415 |
|
|
Stock-based compensation
|
|
|
822,714 |
|
|
|
613,167 |
|
|
Research and development
|
|
|
28,958 |
|
|
|
3,391 |
|
|
Depreciation and Amortization
|
|
|
48,842 |
|
|
|
6,631 |
|
|
Total Operating Expenses
|
|
|
1,260,073 |
|
|
|
974,856 |
|
| |
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
(1,250,735 |
) |
|
|
(972,978 |
) |
| |
|
|
|
|
|
|
|
|
|
Other (Income) and Expense
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
5,903 |
|
|
|
1,691 |
|
|
Sale of Asset(s)
|
|
|
- |
|
|
|
2,757 |
|
|
Total Other (Income) Expenses
|
|
|
5,903 |
|
|
|
4,448 |
|
| |
|
|
|
|
|
|
|
|
|
Net Loss before tax benefit
|
|
|
(1,256,638 |
) |
|
|
(977,426 |
) |
|
Provision for Income Taxes
|
|
|
(472,900 |
) |
|
|
- |
|
|
Net Loss
|
|
$ |
(783,738 |
) |
|
$ |
(977,426 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Loss per share, basic and diluted
|
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
Weighted average number of common shares
|
|
|
102,423,380 |
|
|
|
68,457,040 |
|
| |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
MagneGas Corporation
|
|
|
(Previously A Development Stage Enterprise)
|
|
|
Statement of Changes in Stockholders' Equity
For the Years Ended December 31, 2009 and 2008
|
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Unearned
|
|
|
|
|
|
|
|
| |
|
Preferred
|
|
|
Common
|
|
|
Paid in
|
|
|
Stock
|
|
|
Accumulated
|
|
|
Total
|
|
| |
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Comp
|
|
|
Deficit
|
|
|
Equity
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2007
|
|
|
2,000 |
|
|
|
2 |
|
|
|
67,639,500 |
|
|
|
67,640 |
|
|
|
422,458 |
|
|
|
- |
|
|
|
(422,471 |
) |
|
|
67,629 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for license, valued at $1 per share; February 15, 2008
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
100 |
|
|
|
99,900 |
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock under 5 year consulting agreement, valued at $1 per share, May, 2008
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
100 |
|
|
|
99,900 |
|
|
|
(100,000 |
) |
|
|
|
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized for period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,667 |
|
|
|
|
|
|
|
11,667 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of related party expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,220 |
|
|
|
|
|
|
|
|
|
|
|
11,220 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for services
|
|
|
|
|
|
|
|
|
|
|
31,543,333 |
|
|
|
31,543 |
|
|
|
1,196,957 |
|
|
|
|
|
|
|
|
|
|
|
1,228,500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for cash
|
|
|
|
|
|
|
|
|
|
|
62,000 |
|
|
|
62 |
|
|
|
61,938 |
|
|
|
|
|
|
|
|
|
|
|
62,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(977,426 |
) |
|
|
(977,426 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
2,000 |
|
|
|
2 |
|
|
|
99,444,833 |
|
|
|
99,445 |
|
|
|
1,892,373 |
|
|
|
(88,333 |
) |
|
|
(1,399,897 |
) |
|
|
503,590 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation recognized under consulting agreement (May 31, 2008)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
|
|
|
|
20,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of related party expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,440 |
|
|
|
|
|
|
|
|
|
|
|
22,440 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options issued for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,324 |
|
|
|
|
|
|
|
|
|
|
|
6,324 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for services
|
|
|
|
|
|
|
|
|
|
|
4,517,500 |
|
|
|
4,517 |
|
|
|
791,873 |
|
|
|
|
|
|
|
|
|
|
|
796,390 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for purchase of assets
|
|
|
|
|
|
|
|
|
|
|
150,000 |
|
|
|
150 |
|
|
|
22,350 |
|
|
|
|
|
|
|
|
|
|
|
22,500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for cash
|
|
|
|
|
|
|
|
|
|
|
1,842,062 |
|
|
|
1,842 |
|
|
|
174,158 |
|
|
|
|
|
|
|
|
|
|
|
176,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(783,738 |
) |
|
|
(783,738 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
|
2,000 |
|
|
$ |
2 |
|
|
|
105,954,395 |
|
|
$ |
105,954 |
|
|
$ |
2,909,518 |
|
|
$ |
(68,333 |
) |
|
$ |
(2,183,635 |
) |
|
$ |
763,506 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
|
MagneGas Corporation
|
|
|
(Previously A Development Stage Enterprise)
|
|
|
STATEMENTS OF CASH FLOWS
|
|
| |
|
| |
|
Years Ended
|
|
| |
|
December 31,
|
|
| |
|
2009
|
|
|
2008
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Net loss
|
|
$
|
(783,738
|
)
|
|
$
|
(977,426
|
)
|