Taronis Technologies TRNX Stock News

Taronis Technologies Inc (NASDAQ: TRNX) is making a run for the top in the market this morning, with gains of more than 97%. The gains come after the company announced that it has been awarded a $165 million contract. Here’s what’s happening:

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TRNX Rockets After Announcing $165 Million Contract

In a press release issued early this morning, Taronis Technologies announced that it has entered into a new, and rather large, contract. The contract surrounds a definitive purchase agreement for up to 30 gasification units on behalf of Taronis Fuels.

TRNX said that the contract will start with an initial purchase of 15 units over the course of 18 months. The contract also includes an option to purchase an additional 15 units over 18 months. In the release, the company said that if a minimum of 15 units are purchased, the purchaser will receive a perpetual license for the Turkish market.

TRNX will receive an upfront payment of $3.75 million for each gasification unit purchased. Following the initial purchase, an additional $1.75 million will be paid per unit under a 10-year maintenance contract. Taronis Technologies said that it wi also receive a 3% royalty on all gas produced.

If all 30 units are purchased, the total value of the contract would be $165 million plus royalties. The company also said that in order to meet demand in Turkey, about 75 gasification units would be needed. So, further purchase agreements may be down the line.

While the name of the company that entered into the contract with TRNX was not shared, we do know that it is a Turkish organization that has partnered with five of the largest industrial gas distributors in Turkey. Two of these companies are large global competitors in the industrial gas industry.

Moreover, the purchaser has invited executives from TRNX to present the patented Venturi Plasma Arc gasification technology as well as its proprietary MagneGas metal cutting fuel product. The demonstration will take place at a senior, multi-departmental government meeting in Ankara.

The company said that once the meeting is complete, it will provide Turkish regulatory agencies with information already available for United States operations. The company will also provide the Turkish government with additional testing being conducted in Germany to satisfy European regulatory requirements.

As a result, TRNX said that it expects to clear all necessary permits during the fourth quarter. Of course, the securing of these permits is a condition of the purchase under today’s agreement. Once these permits are secured, the buyer will make a 25% cash deposit and will make the initial purchase order within 60 days.

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

This has the potential to be a financially transformational opportunity for our Company. We anticipate that this transaction has the potential to provide Taronis Fuels with the funding we desire to continue to execute both our US and our international expansion plans for the next several years.

This also has tremendous financial implications for Taronis Technologies, as it would receive a 7% royalty from Taronis Fuels on this contract, which could result in more than $11 million in net proceeds due back to the parent company. We would partially look to use these funds to support our various water conservation technology projects. We would also look to set aside up to half of these proceeds to execute a share buyback program for Taronis Technologies.

We have cultivated this relationship for almost a year, and we are grateful for the opportunity to partner with industry leaders that represent the best in class industrial gas operators not only in Turkey, but globally. We believe this has the potential to be replicated in many other markets.

Our primary objective in our upcoming meetings in Ankara would be to demonstrate the overwhelming superiority of MagneGas relative to acetylene. First, our technology offers a significant environmental benefit. With a zero water footprint, our product can help reduce the massive water pollution issues caused during acetylene production. Globally, acetylene production contaminates 3 billion gallons of fresh water annually.

Second, our gas is a fundamentally safer alternative to acetylene, which can be lethal, as the Turkish government knows all too well. Just this past January, a tragic acetylene explosion and fire at shipyard in Tuzla, Istanbul killed two and badly injured nine. Our product has the potential to save lives by preventing future events like this from happening.

Third, our gas offers major improvements in cutting speed, up to 70% compared to acetylene. This translates into sizable reductions in labor costs, providing lasting economic benefit. We hope to deliver a compelling message that our technology is cleaner, safer, and economically superior, and that MagneGas should be used in lieu of acetylene across all of Turkey. We plan to address this contract among other developments during our upcoming conference call in August.

There Are Plenty Of Reasons To Be Excited Here

The $165 million plus royalties that Taronis Technologies stands to earn as a result of this contract is great news. However, it’s not the only good news we’ve seen from the company as of late. In fact, TRNX has been the ceter of various news releases over the past couple of weeks that investors saw as overwhelmingly positive.

First and foremost, the purchase of the Venturi Gasification Units comes on the heels of news that the company recorded record MagneGas production in the first quarter. In fact, the company said that using only a single unit, it produced 247,624 cubic feet of MagneGas in the quarter.

Interesting we are likely to see the company break more records in the future. After all, it launched a new Venturi Gasification Unit in July and plans to launch yet another in August.

The company also announced record revenues and the spin off of the Taronis Fuels arm of the business shortly after announcing record production.

In other news, the water treatment service at TRNX was also the center of recent positive news. The company used its technology to dramatically reduce the amount of cyanobacteria in a lake i Clearwater, Florida during a blue green algae bloom. This proved the be the first successful commercialization of this technology, a technology that’s likely to be in high demand moving forward.

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The Bottom Line

The bottom line here is that Taronis Technologies is firing on all cylinders. The company is executing on the renewable fuels side and on the water treatment side, generating contracts for millions of dollars in revenue in the process.

Over the past several trading sessions, I’ve been telling my followers to pay close attention here. While the stock is seeing dramatic gains today, I don’t beloeve that the gains are anywhere near over. The stock still represents a compelling long run opportunity!

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