SOURCE: MagneGas Corp.

MagneGas Corp.

December 02, 2009 09:00 ET

MagneGas Makes Entrance to China Market With $5.0 MM Purchase Order Option

TAMPA, FL--(Marketwire - December 2, 2009) - MagneGas Corporation ("MagneGas" or the "Company") (OTCBB: MNGA), a producer of a metal working fuel and natural gas alternative made from liquid waste, announced today that it has entered into a Letter of Intent ("LOI") with Beijing-based DDI Industry International ("DDI"), granting DDI the exclusive option to purchase equipment, and China market distribution and manufacturing rights, for $5.0 million plus equity in a publicly traded Hong Kong company. DDI has paid MagneGas a $10,000 fee in exchange for this exclusive option. The 60-day exclusivity period will conclude January 15, 2010.

During this period, DDI -- a corporation engaged in the business of alternative fuel and power generation technology -- will identify for acquisition a company of like mission publicly traded on the Hong Kong stock exchange. Within the 60-day exclusivity period DDI must contractually agree to purchase said company, though it may complete the transaction after January 15, 2010.

The Hong Kong company will subsequently purchase three (3) Plasma Arc Flow™ Refineries from MagneGas for $5.0 million, and MagneGas will also grant to the Hong Kong company exclusive manufacturing and distribution rights for the MagneGas™ technology, strictly limited to the Chinese market. In addition to its cash payment to MagneGas, DDI will grant MagneGas interest in the Hong Kong company of up to 30%. The payment schedule and equity grant will be clearly defined in the subsequent purchase order, should DDI exercise its option.

DDI may allow the option to expire with no recourse and with no further financial obligation to MagneGas. The Company's intention is to secure a purchase order and distribution/manufacturing contracts by January 15, 2010.

"The importance of the China market needs no introduction -- it is the goal of every energy company on the planet to gain a China foothold," stated MagneGas President Rich Connelly. "With this agreement we have accomplished that and much more. The pending $5 million purchase order represents the biggest one-time financial victory in the history of MagneGas. However, we pride ourselves on taking the longview -- by retaining partial rights to all business in the market we have given MagneGas and its investors exposure to China's extraordinary upside potential."

To ensure proper application of its technology, MagneGas will provide training, scientific support for and collaboration on all future patent applications in the Chinese market.

To be added to the MagneGas investor email list, please email justin.davis@cirrusfc.com with MNGA in the subject line.

About MagneGas Corporation (www.magnegas.com)

Founded in 2007, Tampa-based MagneGas Corporation (OTCBB: MNGA) is the producer of MagneGas™, a natural gas alternative and metal working fuel made from liquid waste such as sewage, sludge, manure and certain industrial and oil based liquid wastes. The Company's patented Plasma Arc Flow™ process gasifies liquid waste, creating a clean burning fuel that is essentially interchangeable with natural gas, but with lower green house gas emissions. MagneGas™ can be used for metal cutting, cooking, heating or powering bi fuel automobiles.

FORWARD-LOOKING STATEMENTS

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