MagneGas Corporation (NASDAQ:MNGA) posted that it has finalized its largest equipment sale with a Letter of Intent. This deal is intended to produce and deliver certain supplies and equipment to a firm based in Germany. The company will obtain $2.65 million for its Gasification and Sterilization arrangements and will deliver MagnesGas2® fuel and cylinders.
The sale results a new era for the firm as it plans to expand the availability of MagneGas2® fuel and its unique technology across the European continent in the worldwide metal cutting fuel market worth $5 billion. Under the LOI terms, MagneGas will produce and deliver a 300KW static Gasification system, a 100KW moveable Sterilization system, 250 cylinders of MagneGas2® and 50 MagneGas regulators.
MagneGas reported that it has obtained deposit of $25,000, with advance payments amounting to $2.625 million due after signature of the definitive deals, construction closure and delivery of systems with linked supplies. The letter of intent calls for sole distribution rights in Germany, along with an alternative to buy rights to certain additional nations with system deployments.
The company has approved to keep the German firm name and the details of the deal private until the parties finalize the definitive agreements. As per the update, the Gasification system is intended to use for producing MagneGas2® fuel that would be sold into the German market. Later, the scope of distribution can be extended. The Sterilization system will be applied for small service contracts and demonstrations with an objective of entering the agriculture industry, and also municipal wastewater treatment sector in Germany.
Ermanno Santilli, the CEO of MagneGas, said that the entire team is thrilled about this opportunity. It holds the potential to introduce target markets that need company’s technology and fuel. This deal is the largest sale so far in the entire history of MagneGas. The CEO added that it will provide them with an opportunity to progress further into Europe. This is one of the most notable events in the firm’s evolution and will assist management define their strategic plans for 2017 and beyond.