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More than 195% Quarterly Revenue Increase from Last Year

TAMPA, Fla., Nov. 14, 2018 (GLOBE NEWSWIRE) -- MagneGas Applied Technology Solutions, Inc. ("MagneGas" or the "Company") (NASDAQ: MNGA), a leading clean technology company in the renewable resources and environmental solutions industries, today announced financial results and provided a business update for the third quarter ended September 30, 2018.

Scott Mahoney, Chief Executive Officer of MagneGas, stated, "2018 has been transformative for many reasons and our rapidly-expanding geographic footprint in the United States has been one of the strongest signals. We proudly announce our monthly sales figures because we're regularly seeing more than 200% year-over-year growth each month. This not only speaks to our acquisition strategy and due diligence being effective, but I would also like to thank all the teams for the speed and efficiency with which we have effectively integrated our acquisitions and enabling them to be immediately accretive.

"With each strategic acquisition and subsequent expansion, more customers and potential partners are recognizing the way our MagneGas2 is transforming their industries in a positive and environmentally-focused way. Revenue for the third quarter, ended September 30, 2018 increased 195% to $2.6 million, largely driven by these new acquisitions.

"We have three major goals: first, we want to scale our US industrial revenues so that we are financial self-sufficient. Second, we want to unlock the growth potential of the European markets. Lastly, we want to explore new and complimentary technology opportunities, leveraging both our existing technologies as well as through partnerships or other technology additions to our patent portfolio. I believe we are hitting on all cylinders and that MagneGas is currently best positioned to maximize our growth potential."

Third Quarter 2018 Financial Results
Revenue for the third quarter ended September 30, 2018 was $2.6 million, which equates to a 195% increase compared to the same period last year. The 195% increase in revenue was due primarily to MagneGas's acquisition of Trico Welding Supplies in Northern California which generated $1.26 million.

For the three months ended September 30, 2018 the cost of revenues was $1.60 million. During this period, the Company generated a gross profit of $998,000. Gross margins for the three months ended September 30, 2018 and 2017 were 38% and 37%, respectively. The Company recorded $201,809 in additional cost of goods sold during the period due to acquisition accounting. If this amount were excluded, gross margins would have otherwise been 46%.

MagneGas recorded $534,000 in additional cost of goods sold during the period due to acquisition accounting. If this amount were excluded, gross margins would have been 43%. The Company anticipates that margins will improve as all acquired inventory is sold and the cost basis for replacement inventory is reflected in MagneGas's future cost of goods sold. Partially offsetting this increase in cost of goods sold, the Company has achieved better pricing and terms on select products as it achieves economies of scale and greater buying power.

Operating costs for the three months ended September 30, 2018 and 2017 were $4.5 million and $2.6 million, respectively. MagneGas's operating expenses as a percentage of sales were 175.1% and 298% for the three months ended September 30, 2018 and 2017, respectively.

Conference Call
MagneGas management will host a conference call on Wednesday, November 14th at 10:00am Eastern Time and provide an update on recent developments, including details of recent acquisitions and other corporate updates. To participate in the call, please dial 1-877-407-0312 (toll-free) in the U.S. and Canada. The conference ID number for both the call and webcast is 13685044.

A live audio webcast of the conference call will also be available on the investor relations page of MagneGas' corporate website at www.magnegas.com.

About MagneGas Applied Technology Solutions, Inc.

MagneGas Applied Technology Solutions, Inc. (MNGA) owns a patented process that converts various renewables and liquid wastes into MagneGas fuels. These fuels can be used as an alternative to natural gas or for metal cutting. The Company's testing has shown that its metal cutting fuel, MagneGas2, is faster, cleaner and more productive than other alternatives on the market. It is also cost effective and safe to use with little changeover costs. The Company currently sells MagneGas2 into the metal working market as a replacement to acetylene.

The Company also sells equipment for the sterilization of bio-contaminated liquid waste for various industrial and agricultural markets. In addition, the Company is developing a variety of ancillary uses for MagneGas fuels utilizing its high flame temperature for co-combustion of hydrocarbon fuels and other advanced applications. For more information on MagneGas, please visit the Company's website at http://www.MagneGas.com.

The Company distributes MagneGas2 through Independent Distributors in the U.S and through its wholly owned distributors, ESSI, Green Arc Supply, Paris Oxygen, Latex Welding Supplies, United Welding Supplies, Trico Welding Supply and Complete Welding of San Diego. The Company operates 13 locations across California, Texas, Louisiana, and Florida.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events, including our ability to raise capital, or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

For a discussion of these risks and uncertainties, please see our filings with the Securities and Exchange Commission. Our public filings with the SEC are available from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.

Investor Contacts:
Tirth Patel
Edison Advisors
T: 646-653-7035
tpatel@edisongroup.com



MagneGas Applied Technology Solutions, Inc.
f/k/a MagneGas Corporation
Condensed Consolidated Balance Sheets
September 30,
2018 December 31,
2017
(Unaudited)
Assets

Current Assets

Cash $ 1,835,912 $ 586,824
Accounts receivable, net of allowance for doubtful accounts of $166,794 and $101,063, respectively 1,386,523 389,652
Inventory 1,543,817 738,950
Prepaid and other current assets 581,661 198,056
Total Current Assets 5,347,913 1,913,482

Property and equipment, net of accumulated depreciation of $2,535,292 and $2,032,265, respectively 9,131,926 6,865,389
Deposits on acquisition - 325,000
Intangible assets, net of accumulated amortization of $707,533 and $457,171, respectively 2,232,509 412,331
Security deposits 16,941 27,127
Goodwill 3,343,280 2,108,781

Total Assets $ 20,072,569 $ 11,652,110

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable $ 1,571,337 $ 1,716,661
Accrued expenses 911,402 909,562
Deferred revenue and customer deposits - 44,095
Capital leases, current 110,074 27,460
Note payable, net of debt discount of $13,903 and $184,204, respectively 125,680 451,754
Promissory notes payable - related party - 100,000

Total Current Liabilities 2,718,493 3,249,532

Long Term Liabilities
Note payable 520,000 520,000
Capital leases, net of current 217,552 63,839
Total Liabilities 3,456,045 3,833,371

Commitments and Contingencies

Series C Preferred stock: 25,000 shares designated; 0 and 115 shares issued and outstanding with a liquidation preference of approximately $0 at September 30, 2018 - 115,000
Series E Preferred stock: 455,882 shares designated; 36,765 and 316,875 shares issued and outstanding with a liquidation preference of approximately $57,500 at September 30, 2018 50,000 430,950
Series F Preferred Stock: 817,670 shares designated; 0 and 0 shares issued and outstanding with a liquidation preference of approximately $0 at September 30, 2018 - -

Stockholders' Equity
Preferred stock: $0.001 par; 10,000,000 shares authorized
Series A Preferred stock: 1,000,000 shares authorized; 1,000,000 shares issued and outstanding with no liquidation preference at September 30, 2018 1,000 1,000
Series B Preferred stock: 2,700 shares designated; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017 - -
Common stock: $0.001 par; 190,000,000 shares authorized; 59,917,080 shares issued and outstanding at September 30, 2018 and 1,782,864 shares issued and outstanding at December 31, 2017 59,918 1,783
Additional paid-in-capital 91,215,564 71,852,874
Accumulated deficit (74,709,958 ) (64,582,868 )

Total Stockholders' Equity 16,566,524 7,272,789

Total Liabilities, Temporary Equity and Stockholders' Equity $ 20,072,569 $ 11,652,110



MagneGas Applied Technology Solutions, Inc.
f/k/a MagneGas Corporation
Condensed Consolidated Statements of Operations
(Unaudited)

For the three months
ended For the nine months
ended
Sep. 30,
2018 Sep. 30,
2017 Sep. 30,
2018 Sep. 30,
2017

Revenue: $ 2,598,820 $ 879,511 $ 6,678,285 $ 2,717,503

Cost of Revenues 1,600,602 552,374 4,331,064 1,588,419
Gross Profit 998,218 327,137 2,347,221 1,129,084

Operating Expenses:
Selling, general and administration 4,133,073 2,453,160 11,220,329 8,366,604
Research and development 4,500 1,470 8,092 125,725
Depreciation and amortization 408,881 166,034 988,354 526,602
Total Operating Expenses 4,546,454 2,620,664 12,216,775 9,018,931

Operating Loss (3,548,236 ) (2,293,527 ) (9,869,554 ) (7,889,847 )

Other Income and (Expense):
Interest (11,387 ) (27,233 ) (107,402 ) (46,142 )
Amortization of debt discount (52,965 ) (804,776 ) (169,676 ) (951,533 )
Other (expense) income - 481 19,542 (2,066 )
Extinguishment of debt - - - (513,725 )
Change in fair value of derivative liability - - - 2,255,322
Total Other Income (Expense) (64,352 ) (831,528 ) (257,536 ) 741,856

Net Loss (3,612,588 ) (3,125,055 ) (10,127,090 ) (7,147,991 )

Deemed dividend 415,800 1,034,682 1,660,200 1,109,682

Net loss attributable to common shareholders $ (4,028,388 ) $ (4,159,737 ) $ (11,787,290 ) $ (8,257,673 )

Net loss per share: Basic and Diluted $ (0.10 ) $ (0.39 ) $ (0.57 ) $ (1.06 )

Weighted average common shares: Basic and Diluted 39,366,633 10,786,551 20,684,102 7,763,782

claym711 said:

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Algos and big traders will use that obvious iH&S to take money from retail.

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Still thinking about this. Yesterday's support was not convincing. I'm not going short or long right now.

Gap up to open. Buckle up for another fun ride.

FriscoKid said:

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Gap up to open. Buckle up for another fun ride.

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I checked the futures 2 hours ago and it was basically flat...did they spike up to cause this or is it just a flash up and pain is coming?

NIO above 7. Let's see if it holds!

RRTS up 10%

gougler08 said:

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FriscoKid said:

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Gap up to open. Buckle up for another fun ride.

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I checked the futures 2 hours ago and it was basically flat...did they spike up to cause this or is it just a flash up and pain is coming?

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Might be a repeat of yesterday, but I don't have a good feel for it. I thought we would fall to 2700 to find support.

Been watching for a flash down open V bottom to close the 2685 gap with a quick pop over 2700 to hold.

ROKU breaks $43.50 3 day resistance and we're in business.

That gap you talk about could be entry point for some weekly calls if we go negative.

59 South said:

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RRTS needs to get its arse over $1 and stay there for good.

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Yes....Yes it does.

MGNA now down to $.39

Guess who just got 500k shares filled at .33 MNGA? It might go lower but this is where I am perfectly happy having a full load again.

Do you think bbox people will get more than 1.08? Or should we just sel it and move on?

UpstateAg said:

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Do you think bbox people will get more than 1.08? Or should we just sel it and move on?

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Sell it. That's it on it. Just keep a record in case a class action suit ever develops. We got sold down the river on this one.

oldarmy1 said:

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MNGA had an intraday green/red reversal top on big volume. Now its gone through 2 dreaded h pattern drops and working to see if a 3rd forms.

We get to $0.33 and I'm buying my 500k sold shares back with a big thank you note.

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Apparently institutions are running the same T/A software I do. We created at least a temporary intraday bottom and bounce. We'll see how consolidation goes and if that retests.

If it does then recognize that it would form a dreaded h and likely move lower.

Anyone looking at UGAZ? /NG continues to rise and from what I am told is that as cold fronts happen, Natural gas will rise. the inverse ETF for this stock is DGAZ and I can only believe that at some point Natural gas has to have a sell off which should make DGAZ rise.

Just don't know when /NG will begin to sell off.

MNGA conference call going well giving the selloff some basing. Without acquisition expenses margins would have been 42%.


Move into EU positive with expectation of big lgrowth.

Has ample cash and cash flow a year forward. Balance sheet strongest in 3 years.

Anyone on the call with me?

Thoughts on oil stocks (UCO or USO) for an inexperienced investor with money to lose?

Sold my BBOX at 1.07 and put all that in on MNGA at .35.

Pretty clearly in a lower trend channel right now over the past 5 days.

Got my long term ROKU double down filled just under 41.90. Was targeting under 42.

Guitarsoup said:

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Sold my BBOX at 1.07 and put all that in on MNGA at .35.

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Your up 3 cents. Sell!!!

That was a joke.

Still on earnings call. Beginning January they will report volume gas sold and revenue associated.

There goes NIO

Once the US/China trade deal is complete, I expect it to really jump. Fingers crossed

jmcfar_98 said:

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Once the US/China trade deal is complete, I expect it to really jump. Fingers crossed

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Any sign of this happening?

Question on shareholders related to extension of listing requirement of $1. He said the preferred share that has been a drag on the stock but will be ended soon.

The reason he gained the extension is because he feels that between retiring those shares in combination with the turn around strategy investors will see the opportunity and the price will be at a point where there is no need for a stock split.

That received a 500k share buy on the ticker.

So as a MNGA road map I hear multiple announcements that will give a push to stock.

1) Retirement completion of preferred shares (expected by January).
2) Announced deals with EU, Amsterdam and other area programs adopting clean gas.
3) Production facility completion in Texas
4) Ramped revenue growth
5) Something about a big deal that he said was not appropriate to discuss at this point.

They do have approval to do a reverse split but again sees opportunity where the stock could rise above $1 (would need to stay above for 10 days) by around February. Otherwise a reverse stock split would have to be announced for meeting the April compliance deadline.

I should buy more to help it over.

clobby said:

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I should buy more to help it over.

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59 South said:

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There goes NIO

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$7.42 and daily volume already above total avg daily volume. Always does this when macro markets headwind.

Probably changing the subject, but does anyone know anything about novocure?

2700 for a bounce looks like money

(Sorry, I cropped out the price...2700 is at the lower trend wall)