TRNX stock moved higher in after-hours trading on January 7, 2020, on a $5 million purchase order.
Taronis Technologies (NASDAQ: TRNX), a sustainability technologies company, announced that the Company’s former subsidiary, Taronis Fuels, has executed a binding agreement with MC Consulting Teknoloji Enerji Danismanlik Sanayi ve Ticaret Limited Şirketi (“MC Consulting”), an energy technology marketing firm based in Ankara, Turkey.
The agreement calls for the immediate sale of one 300KW Venturi plasma arc gasification unit for $5 million to MC Consulting from Taronis Fuels. Taronis has an existing inventory of gasification units, and it will facilitate the immediate sale of an existing unit to be refurbished to a like new condition. The unit has a target delivery date in Ankara of February 29, 2020.
MC Consulting and Taronis Fuels also entered into a multi-year regional marketing agreement. Taronis Fuels has granted MC Consulting an exclusive territory for the marketing and sale of Venturi gasification units for the production of MagneGas, a renewable metal cutting fuel that replaces acetylene, propane and other traditional industrial gases. The initial marketing territory includes Afghanistan, Albania, Armenia, Azerbaijan, Egypt, Georgia, Iraq, Kazakhstan, Moldavia, Pakistan, Turkmenistan, Ukraine and Uzbekistan.
MC Consulting shall initially market fifty 300KW Venturi plasma arc gasification units at a sales price of $5 million, as well as industry standard royalty payments to be paid periodically, in perpetuity, based on MagneGas production within the territory of each buyer. MC Consulting shall earn an industry standard commission as a marketing consultant on applicable unit sales.
The immediate sale of one gasification unit to MC Consulting will serve as a fully functional technical sales demonstration unit to be based in Ankara. Multiple countries within the marketing territory have already expressed a high level of interest in replicating the joint venture model constructed between MC Consulting and Taronis Fuels. This joint venture has been highly successful in gaining the support of the Turkish government across multiple government ministries, including the conditional ban of acetylene to accelerate the countrywide adoption of MagneGas as the sole metal cutting fuel in Turkey within 24 months.
“We are very pleased to announce our expanded relationship with MC Consulting,” commented Scott Mahoney, CEO of Taronis. “The executive team at MC Consulting has demonstrated a unique ability to gain immediate access to the most senior levels of the Turkish government. They have also done an excellent job facilitating the joint venture to support the initial $165 million contract to deliver 30 gasification units into Ankara. We have the highest level of confidence in MC Consulting as a key partner in Turkey.”
“With this impressive success, we have decided to significantly expand our commercial ties with MC Consulting. We have already been introduced to multiple heads of state within the region as a direct result of our relationship with MC Consulting. We have been solicited to replicate the joint venture model established in Turkey with several additional countries in the region.”
“For centuries, Turkey has been the commercial hub connecting Asia, Europe, the Middle East and North Africa. With the successful launch of our Turkish joint venture, we intend to fully leverage this momentum to replicate our business model in many more countries in 2020 and beyond.”
“With the possible sale of an additional fifty gasification units, this has the potential to generate millions of dollars in additional royalties back to Taronis Technologies. We have recently announced a share buyback program. We hope that shareholders can now begin to better understand why we cancelled our recent proposed financing transaction and instead elected to pursue this strategy. We believe that the opportunity to collect scalable royalty income from international unit sales has the ability to deliver significant value beyond the initial Turkish joint venture,” concluded Mr. Mahoney.
On January 2, 2020, Taronis Technologies (NASDAQ: TRNX) announced that the Company has approved a $1 million common stock buyback program. This program is expected to be discretionary, with periodic buybacks expected throughout the first quarter of 2020.
“With the commencement of the $18.75 million gasification purchase under Taronis Fuels, our Company is expected to receive $1.3 million in royalty payments over the next 90-100 days,” commented Scott Mahoney, CEO of Taronis. “Our Company is committed to maximizing shareholder value through all options, including cash dividends and buyback programs. It is our assessment that an immediate buyback program provides a meaningful way to deliver maximum shareholder value given the expected free cash flows to Taronis early in 2020.”
On December 30, 2019, Taronis Technologies announced that the company has received formal notice from the Turkish Ministry of Trade that a conditional ban has been made public, limiting the use of acetylene, propane and other industrial gases widely used as metal cutting fuels within the Republic of Turkey.
The Company’s executive team met with The Director General of Imports, Mr. Ahmet Çetinkayiş during a recent series of cabinet level meetings in Ankara. During this meeting, the Director General delivered a ceremonial plaque declaring the government’s intention to ban alternative prevailing metal cutting fuels, making MagneGas the exclusive metal cutting fuel across the Republic of Turkey.
The Director General further informed the Company that the formal ban will be enacted once the government is satisfied that Taronis’ new Ankara based joint venture can meet the needs of the local market for metal cutting fuels. The government has confirmed that the local market is approximately $200 million in annual consumption. To meet this level of demand, the Turkish government also confirmed that approximately one hundred of Taronis’ patented 300 KW Venturi plasma arc gasification units will be required.
The government has informed Taronis to be prepared to deliver all one hundred gasification units over a 24 month time frame. This would require a significant expansion of the existing $165 million purchase contract, which covers only thirty gasification units, and was recently approved and commenced in mid-December.
“With our most recent meetings in Ankara, our team accomplished a great deal that is only now beginning to be fully revealed,” commented Scott Mahoney, CEO of Taronis. “We sought the ban of acetylene from the very beginning in our dialogue with Turkish officials. This is one of the most dangerous, environmentally harmful industrial products and it has no place in modern society.”
“Our core value proposition to the Turkish government has been the ability to reduce the frequency of needless injuries and fatalities related to acetylene. Turkey has created a vast and growing industrial base, and MagneGas has the ability to make tens of thousands of workers across Turkey safer and more productive.”
“Our technology not only delivers clear safety and productivity benefits of MagneGas, but also significant water conservation and environmental benefits. This compelling combination of factors has caused the Ministry of Trade and the Ministry of Energy and Natural Resources to become strong advocates for Taronis and our renewable metal cutting fuel, MagneGas. We are grateful for their support, and we look forward to helping Turkey achieve their objective to completely ban acetylene within 24 months,” concluded Mr. Mahoney.