Taronis Technologies TRNX Stock News

After a strong run in value last week, Taronis Technologies Inc (NASDAQ: TRNX) is starting this week on a strong note. The stock is up more than 7% after announcing a spin off. Here’s what’s going on:

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TRNX Stock Climbs On Spin Off News

In a press release issued early this morning, Taronis Technologies announced that it would be moving forward with a spin off. In the release, the company said that it would be spinning off a wholly owned subsidiary known as Taronis Fuels.

Taronis Fuels is the owner of the comapny’s United States gas and welding supply retail unit known as MagneGas Welding Supply. Once the spin off is complete, those who own TRNX common shares will receive one share of Taronis Fuels common stock for each share of the company owned as of August 15, 2019.

As part of the spin off, TRNX said that it will be filing the appropriate documents with the SEC for the newly spun off entity to trade on the OTCQB/QX. These documents include audited financial statements for the company as a standalone business for 2017 and 2018 as well as reviewed financial staements for the first six months of 2019.

The company also said that the second quarter earnings call for Taronis Fuels is expected to be scheduled and held in conjunction with the filing.

Before the completion of the spin off, TRNX said that it will be granting an exclusive, world-wide license to Taronis Fuels for the use of all IP related to fuel and power-production applications generated with its proprietary submerged venturi plasma Arc gasification technology and related fuels.

Following the spin off, the company will continue to actively work toward the commercialization of its agricultural waste, hospital waste, and cyanobacteria remediation technologies. The company will also continue moving forward with its Water Pilot Business.

In a statement, Scott Mahoney, CEO at TRNX, had the following to offer:

Our comprehensive patent portfolio has created some very unique opportunities. It is very rare to find a core set of intellectual property that has so many diverse end uses. After careful deliberation, our Board of Directors has elected to execute this spin-off in an effort to help realize shareholder value across our entire business.

Taronis Technologies is expected to benefit from a dramatically leaner cost structure. Its cash burn is projected to be extremely limited. We have over $5 million in cash on hand today, and almost no debt. With the spin off, Taronis Technologies is not expected to require significant capital to execute on its business plan for the foreseeable future. In addition, the Water Pilot is expected to begin generating positive cash flows if several highly promising prospective clients elect to move forward in the near term.

We are also modifying our business model for our agricultural waste and cyanobactiera solutions. Under prior management, these projects were very capital intense. Going forward, we have identified specific target partners within each industry that we will attempt to engage in world class partnerships to unlock the potential of our water decontamination technology.

Under those partnerships, we would look to minimize our cash outlay, and instead seek partners that would carry the majority of the financial burden for each project. When combined with our ownership in the Water Pilot, our water decontamination partnerships can become fully centered on global water conservation solutions going forward. We believe that this business model, with a lean cash outlay, promising technology, and a series of world class partnerships is a compelling business strategy.

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