TRNX stock is up 23 percent on December 12, 2019, after the company announced its joint venture.
Taronis Technologies, Inc., (“Taronis” or “the Company”) (NASDAQ: TRNX), a sustainability technologies company, today announced that the Company, together with its former subsidiary, Taronis Fuels, have successfully completed all of the requirements to form Taronis Fuels Turkey Gas Enerji Sanayi ve Ticaret Limited Şirketi, a joint venture between Taronis Fuels and a commercial consortium based in Ankara.
The purpose of the joint venture will be to serve the $200 million metal cutting fuel industry of Turkey using Taronis’ patented submerged plasma arc gasification technology, which produces the only renewable metal cutting fuel on the market today.
With the successful completion of all government requirements, the executive team of Taronis Fuels has been formally invited to a series of Cabinet-level meetings, culminating with an executive meeting where the signing of critical government pronouncements is scheduled for next week. The event will be filmed by a London based film crew for broad Western coverage, as well as the local media, which will be viewed by an international audience within the region of more than 250 million viewers.
“We are pleased to reach this critical milestone,” commented Scott Mahoney, CEO of Taronis. “This official government signing event is the culmination of almost two years of hard work. To have the opportunity to partner at the very highest level of industry with strong and clear government support is a major accomplishment and a powerful endorsement for our technology and our team.”
“We look forward to the signing event next week, and are eager to get started on the mass production of our 300 KW Venturi plasma arc gasification units for immediate deployment to Ankara in early 2020,” concluded Mr. Mahoney.
Taronis Technologies announced its key business development goals for its agricultural waste sterilization business in 2020. In addition, the Company provided management’s view on recent capital market activities in relation to these objectives.
The company said, “First, the Company will look to complete a joint venture for the sterilization of animal waste early in 2020. Specifically, the Company is focused on a joint venture in North Carolina to address the issues related to animal waste produced by the hog industry. North Carolina is the third largest hog producing state in the US today, and this herd generates over 15 million tons of animal waste every year. In fact, under the Smithfield Agreement in 2000, animal waste is the primary limiting factor for the growth and size of the hog industry in North Carolina. Taronis recently completed an 18 month USDA grant funded project that produced clear and compelling validation of its ability to solve several of the critical dangers associated with untreated animal waste. A comprehensive white paper has been submitted to the USDA for technical review. The report documents a number of critical benefits from our technology on animal waste. First, Taronis has clearly demonstrated the ability to eradicate pathogens, including E coli and fecal coliform. Second, the Company has demonstrated that once sterilized, there is no recurrence in pathogen growth within the sterilized materials. Third, Taronis breaks down complex compounds, including pharmaceuticals commonly dissolved in animal urine. Lastly, the Company documented our ability to measurably reduce harmful metals commonly found in animal waste. The Company is actively engaged in dialogue with one of the largest hog producers in the US. The Company has proposed a multi-faceted project that would validate the commercialization at scale of its animal waste sterilization technology. This would be accomplished through the deployment of plasma arc sterilization units at scale across North Carolina. At least two leading universities within North Carolina have been prioritized and have been invited to participate in the project to further validate the health benefits of Taronis’ sterilization process. Lastly, these same universities would independently validate the ability to safely utilize the animal waste streams post-treatment for multiple end agricultural applications, including hydroponic agriculture and fertilizer feedstocks.”
“Our team has placed a top priority on launching the highest possible quality joint venture in North Carolina,” commented Scott Mahoney, CEO of Taronis. “We have already had positive and meaningful discussions with one of the leaders in the global hog industry. With the recent epidemic of African swine fever killing almost 6 million hogs worldwide, there is a real need for US hog production to safely fill the demand gap. Our technology can solve the critical gating issue to production growth in North Carolina. We can help the entire state reduce the health and environmental issues related to the disposal of animal waste. In addition, we can help the industry grow safely, providing lasting economic benefits in North Carolina, and eventually everywhere hogs are produced. We recently announced a $25M convertible preferred offering. We have received many inquiries from shareholders as to why we would contemplate this transaction. First, we believe we can capitalize on a very large economic opportunity solving this waste issue across the global hog industry. We believe this technology is very close to commercial viability, and we want to ensure the Company is financially prepared to support a full scale launch if our prospective industry partner wants to rapidly expand the project. Lastly, we want to take this opportunity to remind all investors that the recently announced offering is deliberately structured so that the Company can service all amortization with cash payments. In addition, the Company has recently provided a series of updates on a $165M contract under a previously owned subsidiary, Taronis Fuels, which has been successfully spun off and is expected to begin trading in the near term. Management has concluded that the royalties due back to Taronis from the $165M contract should be able to adequately service the periodic payments for the proposed convertible preferred, thus minimizing any potential dilution. We intend to provide additional updates on all of the other commercial activities of Taronis in the coming days. The completion of the proposed financing is subject to shareholder approval. We expect that our comprehensive updates, combined with material updates related to the $165M contract under Taronis Fuels will give our shareholders the confidence to approve the proposed financing in due time.”
Back on November 20, 2019, Taronis Technologies reported Q3 revenue of $5.3M.
“This was a very productive quarter for our team,” commented Scott Mahoney, CEO of Taronis. “We had spent almost 18 months working toward a landmark contract with Turkey, which we executed in July. This $165M contract is projected to be highly profitable, and we anticipate the entire contract could be expedited, pulling revenues and EBITDA into 2020 for our benefit. We also made significant progress in launching our first Europe location, located in Amsterdam, which we announced at the end of the quarter. We also made significant progress in multiple markets in the Middle East, and we began to unlock a compelling opportunity with partners in Latin America.
Our international expansion during the period was a clear success. Domestically, we executed well in a very competitive market. All our integration is behind us, and we have been expanding our sales force in every market we serve to drive revenue growth. We are coming out of our seasonally slow period, and we believe the fourth quarter will start to see some of the major new client additions delivered in the third quarter start to affect top line growth for several quarters to come. On the MagneGas front, we have ramped up our marketing efforts, and have started to win major new clients both through the conversion of existing acetylene clients and outright new clients to adopt MagneGas as their metal cutting fuel product of choice. For example, in California, we brought on one of the largest demolition companies in the state as a new client, and they are using MagneGas to on two major projects. We converted another leading salvage company to use MagneGas in San Diego, and they now one of our largest MagneGas clients in California. In Texas, we experienced similar success. In fact, one of our largest acetylene clients, which is a subcontractor for one of the largest global construction and earth moving equipment manufactures converted to MagneGas during the quarter. We estimate that their annual demand for our product could exceed all of our combined demand in Florida in 2018. We made a concentrated wager that expanding into these new markets was the correct decision. Based on the pace and scale of new MagneGas business we are starting to see, we made the correct decision. Lastly, we took a major leap in company history during the quarter. We brought our first plasma arc gasification unit outside of Florida online in late September. This is expected to play a key role in supporting accelerated MagneGas sales in 2020 and beyond. We intend to establish similar production capabilities in multiple locations in California in 2020. With these expanded capabilities, we anticipate that MagneGas sales will potentially contribute to revenues and EBITDA generation in 2020.”