x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
26-0250418
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
150 Rainville
Rd
Tarpon
Springs, FL 34689
|
34689
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(Former name, former address, if
changed since last report)
|
Tel:
(727) 934-9593
|
(Issuer’s
telephone number)
|
Large
accelerated filer o
|
Non-accelerated
filer o
|
Accelerated
filer o (do not
check if smaller reporting company)
|
Smaller
reporting company x
|
PART
I - FINANCIAL INFORMATION
|
||
Item
1.
|
Unaudited
financial statements
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operation or
Plan of Operation
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
|
Item
4T.
|
Controls
and Procedures
|
|
PART
II -OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings.
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
|
Item
3.
|
Defaults
Upon Senior Securities.
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
|
Item
5.
|
Other
Information.
|
|
Item
6.
|
Exhibits
|
|
SIGNATURES
|
Financial
Statements:
|
|
Balance
Sheets September 30, 2008 (unaudited) and December 31, 2007
(audited)
|
F-1
|
Statements
of Operations (unaudited)
|
F-2
|
Statements
of Changes in Stockholders’ Equity (unaudited)
|
F-3
|
Statements
of Cash Flows (unaudited)
|
F-4
|
Notes
to Financial Statements (unaudited)
|
F-5
through F-11
|
MagneGas
Corporation
|
||||||||
(A
Development Stage Enterprise)
|
||||||||
BALANCE
SHEET
|
||||||||
September
30, 2008
(unaudited)
|
December
31, 2007
(audited)
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
|
$
|
38,654
|
$
|
76,232
|
||||
Accounts
Receivable
|
1,247
|
-
|
||||||
Inventory
|
5,139
|
-
|
||||||
Prepaid
Expenses
|
-
|
2,000
|
||||||
Total
current assets
|
45,040
|
78,232
|
||||||
Equipment,
net of accumulated depreciation of $0 and $173
respectively
|
-
|
5,027
|
||||||
Intangible
license, net of amortization of $4,444 and $0
respectively
|
95,556
|
-
|
||||||
TOTAL
ASSETS
|
$
|
140,596
|
$
|
83,259
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
Payable
|
$
|
49,953
|
$
|
-
|
||||
Accrued Expense
|
3,629
|
5,630
|
||||||
Advances from Related Party
|
10,000
|
10,000
|
||||||
Note
Payable, Related Party
|
71,083
|
-
|
||||||
TOTAL
CURRENT LIABILITIES
|
$
|
134,665
|
$
|
15,630
|
||||
STOCKHOLDERS’
EQUITY
|
||||||||
Preferred
Stock - Par value $0.001;
|
||||||||
Authorized: 10,000,000
|
||||||||
2,000 issued and outstanding
|
$
|
2
|
$
|
2
|
||||
Common
Stock - Par value $0.001;
|
||||||||
Authorized: 100,000,000
|
||||||||
Issued and Outstanding: 68,446,500 and 67,639,500 at September 30,
2008
and
December 31, 2007, respectively
|
68,447
|
67,640
|
||||||
Additional
Paid-In Capital
|
1,234,261
|
422,458
|
||||||
Prepaid
Consulting Services Paid with Common Stock
|
(93,333
|
)
|
||||||
Accumulated
Deficit during development stage
|
(1,203,446
|
)
|
(422,471
|
)
|
||||
Total
Stockholders’ Equity
|
5,931
|
$
|
67,629
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
140,596
|
$
|
83,259
|
||||
MagneGas
Corporation.
|
||||||||||||||||||||
(A
Development Stage Enterprise)
|
||||||||||||||||||||
STATEMENT
OF OPERATIONS
|
||||||||||||||||||||
For
the three and nine months ended September 30, 2008 and
2007
|
||||||||||||||||||||
And
for the period December 9, 2005 (date of inception) to September 30,
2008
|
||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
Inception
Date to
September
|
||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
30,
2008
|
||||||||||||||||
REVENUE
|
$
|
1,072
|
$
|
-
|
$
|
9,151
|
$
|
-
|
$
|
9,151
|
||||||||||
COST
OF SERVICES
|
1,102
|
-
|
9,146
|
-
|
9,146
|
|||||||||||||||
GROSS
(LOSS) OR PROFIT
|
(
30
|
)
|
-
|
5
|
-
|
5
|
||||||||||||||
OPERATING
EXPENSES:
|
||||||||||||||||||||
Advertising
|
157
|
-
|
3,042
|
3,042
|
||||||||||||||||
Selling
|
7,690
|
-
|
30,693
|
30,693
|
||||||||||||||||
Professional
|
55,532
|
10,768
|
156,014
|
23,455
|
333,312
|
|||||||||||||||
Rent
and overhead
|
18,593
|
-
|
27,073
|
27,073
|
||||||||||||||||
Office
and administration
|
178
|
-
|
685
|
685
|
||||||||||||||||
Services,
stock-based compensation
|
405,000
|
-
|
551,667
|
245,000
|
796,667
|
|||||||||||||||
Research
and development
|
1,102
|
-
|
3,102
|
3,102
|
||||||||||||||||
Total
Operating Expenses
|
488,252
|
10,768
|
772,276
|
268,455
|
1,194,574
|
|||||||||||||||
OTHER
(INCOME) EXPENSE
|
||||||||||||||||||||
Interest
expense
|
473
|
-
|
983
|
-
|
983
|
|||||||||||||||
Depreciation
and amortization
|
1,666
|
-
|
4,964
|
-
|
5,137
|
|||||||||||||||
Loss
on sale of equipment
|
-
|
-
|
2,757
|
-
|
2,757
|
|||||||||||||||
Total
Other (Income) Expense
|
2,139
|
-
|
8,704
|
-
|
8,877
|
|||||||||||||||
NET
LOSS
|
$
|
(
490,421
|
)
|
$
|
(
256,937
|
)
|
$
|
(
780,975
|
)
|
$
|
(
268,455
|
)
|
$
|
(1,203,446
|
)
|
|||||
Loss
per share, basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.03
|
)
|
|||||
Basic
and diluted weighted average number of common shares
|
68,290,346
|
67,439,286
|
67,990,828
|
36,257,864
|
35,000,943
|
|||||||||||||||
MagneGas
Corporation
|
|||||||||||||||||||||||||||
(A
Development Stage Enterprise)
|
|||||||||||||||||||||||||||
STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||||||||||
For
the nine months ended September 30, 2008 and for each of the years
from
December
9, 2005 (date of inception) to September 30, 2008
|
|||||||||||||||||||||||||||
Preferred
|
Common
|
Additional
Paid in
|
Prepaid
Consulting Services Paid with Common
|
Accumulated
Deficit During Development
|
Total
|
||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stock
|
Stage
|
Equity
|
||||||||||||||||||||
Stock
issued on acceptance of incorporation expenses, December 9,
2005
|
100,000
|
$
|
100
|
$
|
100
|
||||||||||||||||||||||
Net
loss
|
(400
|
)
|
(400
|
)
|
|||||||||||||||||||||||
Balance
at December 31, 2005
|
-
|
-
|
100,000
|
100
|
-
|
(400
|
)
|
(300
|
)
|
||||||||||||||||||
Net
loss
|
(1,450
|
)
|
(1,450
|
)
|
|||||||||||||||||||||||
Balance
at December 31, 2006
|
-
|
-
|
100,000
|
100
|
-
|
(1,850
|
)
|
(1,750
|
)
|
||||||||||||||||||
Acquisition
of controlling interest, payment of liabilities
|
2,500
|
2,500
|
|||||||||||||||||||||||||
Recapitalization:
Issuance
of preferred stock to founders, valued at par, April 2,
2007
|
2,000
|
2
|
(2
|
)
|
-
|
||||||||||||||||||||||
Recapitalization:
Issuance
of common stock to founders, valued at par, May 12,
2007
|
67,052,000
|
67,052
|
(67,052
|
)
|
-
|
||||||||||||||||||||||
Issuance
of stock for services, valued at $1 per share, May 12,
2007
|
245,000
|
245
|
244,755
|
245,000
|
|||||||||||||||||||||||
Stock
issued for cash:
|
|||||||||||||||||||||||||||
June 12, 2007; $1 per share
|
30,000
|
30
|
29,970
|
30,000
|
|||||||||||||||||||||||
August
28, 2007; $1 per share
|
13,000
|
13
|
12,987
|
13,000
|
|||||||||||||||||||||||
September 17,2007; $1 per share
|
54,000
|
54
|
53,946
|
54,000
|
|||||||||||||||||||||||
October
11, 2007; $1 per share
|
60,500
|
61
|
60,439
|
60,500
|
|||||||||||||||||||||||
Issuance
of stock for services, valued at $1 per share, October 11,
2007
|
85,000
|
85
|
84,915
|
85,000
|
|||||||||||||||||||||||
Net
loss, through December 31, 2007
|
(420,621
|
)
|
(420,621
|
)
|
|||||||||||||||||||||||
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
(unaudited)
|
100,000
|
100
|
99,900
|
100,000
|
|||||||||||||||||||||||
Issuance
of stock in execution of five year consulting agreement, valued at $1 per
share, May 31, 2008 (unaudited)
|
100,000
|
100
|
99,900
|
(100,000
|
)
|
-
|
|||||||||||||||||||||
Amortization
of prepaid consulting services paid with common stock, September 30, 2008
(unaudited)
|
6,667
|
6,667
|
|||||||||||||||||||||||||
Issuance
of stock for services:
|
|||||||||||||||||||||||||||
February
15, 2008, valued at $1 per share (unaudited)
|
145,000
|
145
|
144,855
|
145,000
|
|||||||||||||||||||||||
July
28, 2009, valued at $1 per share (unaudited)
|
|||||||||||||||||||||||||||
Stock
issued for cash:
|
|||||||||||||||||||||||||||
May
31, 2008; $1 per share (unaudited)
|
12,000
|
12
|
11,988
|
12,000
|
|||||||||||||||||||||||
September
4, 2008; $1 per share (unaudited)
|
50,000
|
50
|
49,950
|
50,000
|
|||||||||||||||||||||||
Net
loss, through September 30, 2008 (unaudited)
|
(780,975
|
)
|
(755,365
|
)
|
|||||||||||||||||||||||
Waiver
of related party expense (unaudited)
|
5,610
|
||||||||||||||||||||||||||
Balance
at September 30, 2008 (unaudited)
|
2,000
|
$
|
2
|
68,446,500
|
$
|
68,447
|
$
|
1,234,261
|
$
|
(93,333)
|
$
|
(1,203,446
|
)
|
$
|
5,931
|
MagneGas
Corporation
|
||||||||||||
(A
Development Stage Enterprise)
|
||||||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||||||
For
the nine months ended September 30, 2008 and 2007,
|
||||||||||||
And
for the period December 9, 2005 (date of inception) to September 30,
2008
|
||||||||||||
(unaudited)
|
||||||||||||
Nine
Months Ended
September
30,
|
Inception
Date to
September
30,
|
|||||||||||
2008
|
2007
|
2008
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$
|
(780,975
|
)
|
$
|
(268,455
|
)
|
$
|
(1,203,446
|
)
|
|||
Adjustments
to reconcile net loss to cash used in operating
activities:
|
||||||||||||
Stock
compensation
|
551,667
|
245,000
|
881,767
|
|||||||||
Wavier
of related party expenses
|
5,610
|
5,610
|
||||||||||
Depreciation
and Amortization
|
4,964
|
5,137
|
||||||||||
Loss
on disposal of equipment
|
2,757
|
2,757
|
||||||||||
Changes
in operating assets:
|
||||||||||||
Increase
in Accounts Receivable
|
(1,247
|
)
|
(1,247
|
)
|
||||||||
Increase in
Inventory
|
(5,139
|
)
|
(5,139
|
)
|
||||||||
Increase in
Prepaid Expenses
|
2,000
|
(2,000
|
)
|
-
|
||||||||
Increase
in Accounts Payable
|
49,953
|
49,953
|
||||||||||
Increase in
Accrued Expenses
|
(2,001
|
)
|
2,250
|
3,629
|
||||||||
Total
adjustments to net loss
|
608,564
|
245,250
|
942,467
|
|||||||||
Net
cash (used in) operating activities
|
(172,411
|
)
|
(23,205
|
)
|
(260,979
|
)
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Acquisition
of reporting entity
|
-
|
-
|
(5,200
|
)
|
||||||||
Gross
proceeds from sale of equipment
|
1,750
|
1,750
|
||||||||||
Net
cash flows (used in) investing activities
|
1,750
|
-
|
(3,450
|
)
|
||||||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
||||||||||||
Advances
from Related Party
|
-
|
10,000
|
||||||||||
Proceeds
from Note Payable to Related Party
|
70,100
|
-
|
70,100
|
|||||||||
Accrued
interest on note payable from related party
|
983
|
983
|
||||||||||
Capital
contribution; liability payment at acquisition
|
-
|
2,500
|
2,500
|
|||||||||
Proceeds
from issuance of common stock
|
62,000
|
97,000
|
219,500
|
|||||||||
Net
cash flows provided by investing activities
|
133,083
|
101,500
|
303,083
|
|||||||||
Net
increase in cash
|
(37,578
|
)
|
78,295
|
38,654
|
||||||||
Cash
- beginning balance
|
76,232
|
-
|
||||||||||
CASH
BALANCE - END OF PERIOD
|
$
|
38,654
|
$
|
78,295
|
$
|
38,654
|
||||||
Supplemental
disclosure of cash flow information and non cash investing and financing
activities:
|
||||||||||||
Interest
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Taxes
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
|
September
30, 2008
|
December
31, 2007
|
||||||
Equipment
|
$
|
-
|
$
|
5,200
|
||||
Less accumulated depreciation
|
-
|
173
|
||||||
Property
and equipment, net
|
$
|
-
|
$
|
5,027
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operation or
Plan of Operation.
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
Item
4T.
|
Controls
and Procedures.
|
(b) | Exhibits | |
Exhibit Number | Exhibit Title | |
31.1
|
Certification of
Dr. Ruggero Santilli pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2
|
Certification of
Luisa Ingargiola, pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
|
Certification of
Dr. Rugerro Maria Santilli pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification of
Luisa Ingargiola, pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
MagneGas
Corporation
|
|||
|
By:
|
/s/ Dr. Ruggero Maria Santilli | |
Dr. Ruggero Maria Santilli | |||
Chief
Executive Officer
|
|||
Dated:
|
November
11, 2008
|