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Taronis Executes $165 Million Contract
Company to Sell Up to 30 Gasification Units to Turkish Gas Consortium
PHOENIX, AZ / ACCESSWIRE / July 22, 2019 / Taronis Technologies, Inc., (“Taronis” or “the Company”) (NASDAQ: TRNX), a leading clean technology company in the renewable resources and environmental conservation industry, today announced a binding, definitive purchase contract for up to 30 gasification units on behalf of Taronis Fuels, Inc. The contract consists of an initial purchase of 15 units over 18 months. The contract also includes an option to purchase an additional 15 units over 18 months. If a minimum of 15 units are purchased, the purchaser will receive a perpetual license for the Turkish market to the counterparty.
Each gasification unit carries an upfront purchase price of $3.75 million, and would include a 10 year maintenance contract for an additional $1.75 million per unit. The overall contract also includes a perpetual 3% royalty on all gas produced. If all 30 units are purchased, the total value of the contract, excluding royalties would be $165 million. The Company estimates that Turkey may likely ultimately require approximately 75 units to service the entire economy.
The counterparty is a Turkish organization that has partnered with five of the largest industrial gas distributors in Turkey today. This consortium includes subsidiaries of two of the largest global competitors in the industrial gas industry. Executives from Taronis have been invited to present the patented Venturi Plasma Arc gasification technology and Taronis’ proprietary MagneGas metal cutting fuel product at a senior, multi-departmental government meeting in Ankara in the coming weeks. The purpose of this meeting would be to present the safety, environmental, and economic benefits of the combined Taronis technology.
Once this meeting is complete, the Company plans to provide the Turkish regulatory agencies with the necessary information already available for its US operations, as well as the additional testing being conducted in Germany to satisfy the European Union regulatory process. It is expected that Taronis may be able to clear all necessary permits in Turkey during the fourth quarter, which is a condition of initial payment by the buyer. Once this regulatory condition is satisfied, a 25% cash deposit must be made on the initial purchase order within 60 days.
“This has the potential to be a financially transformational opportunity for our Company,” commented Scott Mahoney, CEO of Taronis. “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,” Mr. Mahoney continued.
“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.” concluded Mr. Mahoney.
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