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Taronis Provides Corporate Update

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Taronis Fuels, Inc.
·5 min read
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Preserving long-term shareholder value by adopting a rights plan to protect the value of tax assets by reducing likelihood of an ownership change

Improving capital position through completion of equity financing

Employee retention plan to incentivize and retain employees

PHOENIX, AZ, March 04, 2021 (GLOBE NEWSWIRE) -- Taronis Fuels, Inc., (“Taronis” or “the Company”) (OTCQB: TRNF), a global producer of renewable and socially responsible fuel products, today announced recent corporate actions taken to improve the Company’s capital position, retain and incentivize employees, and protect the availability of its net operating losses (NOLs).

On March 3, 2021, the Board of Directors of Taronis (the “Board”) adopted a shareholder rights plan designed to protect the Company’s ability to use net operating loss carryforwards (“NOLs”) under the Internal Revenue Code (“Section 382 Rights Plan”). Taronis estimates that as of December 31, 2020, and 2019, it had net operating loss carryforwards of approximately $27,000,000. To the extent that the NOLs and other Tax Benefits do not otherwise become limited, the Company believes that it will be able to carry forward and utilize a significant amount of NOLs and other Tax Benefits to offset future taxable income and gain, and therefore these NOLs and other Tax Benefits represent a substantial and valuable asset of the Company. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Code (very generally a 50% change in ownership among certain 5% shareholders), its ability to use the NOLs and other Tax Benefits in any given year to offset taxable income and gain will be substantially limited, which could therefore significantly impair the value of those assets.

The Section 382 Rights Plan is similar to those adopted by numerous other public companies with significant NOLs. It is designed not to limit any action that the Board determines to be in the best interest of Taronis shareholders, and to help ensure that the Board remains in the best position to discharge its fiduciary duties.

The Company has completed a private placement of shares of the Company’s common stock to raise working capital necessary to finance the Company’s continued operations. The private placement was commenced in early February, following a planning process that began in January. In addition, the Company completed transactions involving the exercise of outstanding warrants for additional shares of the Company’s common stock in order to raise additional capital for the Company’s continued operations. As a result of the warrant exercises and the private placement, the Company received a total of approximately $2.4 million in gross proceeds. The transactions provided an important source of capital to help fund Company operations and working capital requirements, including to help fund unexpected expenses in connection with a recent shareholder-initiated consent solicitation.

Additionally, Taronis restructured certain existing cash contractual obligations of the Company in exchange for common stock without a discount to current market value, and without any warrants or any other future rights. As a result of these transactions, the Company was able to eliminate almost $2 million in cash liabilities and expenses.

Taronis also issued a one-time company-wide stock grant to all employees, with the exception of officers and directors, to retain and incentivize each of its valuable team members who play a critical role in the Company’s operations and its future growth and success.

Taronis has provided further details on the above actions in the Company’s filings with the SEC.

About Taronis Fuels, Inc.

Taronis Fuels, Inc. is a global producer of renewable and socially responsible fuel products. Our goal is to deliver environmentally sustainable, technology-driven alternatives to traditional fossil fuel and carbon-based economy products. We believe our products offer a vastly cleaner solution to legacy acetylene and propane alternatives.

Taronis is also dedicated to providing fundamentally safer solutions to meet the industrial, commercial and residential needs of tomorrow’s global economy. Our products have been rigorously tested and independently validated by global gas authorities as vastly safer than acetylene, the most dangerous industrial gas in use today.

Lastly, we strive to deliver products that offer significant function superiority at a reduced cost to the end consumer. Through these efforts, we support 9 of the 17 United Nations Sustainable Development Goals. For more information, please visit our website at www.taronisfuels.com

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:
Michael Khorassani
IR@Taronisfuels.com

Media Contacts:
Paul Caminiti/Pam Greene
Taronis@reevemark.com