TRNF - Stonegate Capital Partners Updates Coverage On Taronis Fuels Inc. (OTC: TRNF)

DALLAS, TX / ACCESSWIRE / September 9, 2020 / Taronis Fuels, Inc. (OTCQB:TRNF): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/TRNF Q220.pdf

COMPANY DESCRIPTION

Taronis Fuels, Inc. is a renewable fuel and power generation company that is focused on the production and sale of sustainable, socially responsible alternatives to fossil fuel and industrial gas products. The Company, through its subsidiaries, sells and distributes industrial gasses, welding equipment, and services to the metalworking and manufacturing industries. Taronis' first commercial product is a patent protected metal cutting fuel called MagneGas, which is sold through the Company's existing 26 retail locations in the United States as well as through joint ventures and licensing deals internationally. Taronis Fuels went public after it was spun-off from Taronis Technologies, Inc. in December 2019. As of Dec. 31, 2019, the Company has 151-full time employees and is headquartered in Peoria, Arizona.

SUMMARY

• Innovative technology- MagneGas is the Company's proprietary synthetic gas comprised primarily of hydrogen and is produced using its patented Plasma Arc Venturi® Flow design which enables the Company to closely monitor the speed of fluids passing near the plasma arc. The result is a more stable product that produces 40-70% faster cutting times.
• Superior product and cost profile - MagneGas, is a clean, renewable, and environmentally sustainable metal cutting fuel that is superior to current competitors in safety, sustainability, function, and cost. Taronis uses primarily medical grade waste ethanol to create a flame that burns 54% hotter than its main competitive product, acetylene, at a cost that is ~50% cheaper.
• Large addressable market - Taronis' superior pricing power gives them an advantage in the $8B metal cutting fuel market. The Company is focused on using its pricing power to accelerate its marketing and taking market share from competitors. The Company is anticipating launching into the much larger propane and natural gas markets within the next 5 years.
• Domestic sales are ramping - Using a national retail network focused on welding supply and industrial gas markets, Taronis has increased its sales 6.5x from 2017 to 2019, and 118% from 2018 to 2019. Taronis' proprietary MagneGas product and acquisition of existing welding retail supply stores have contributed to the growth with Taronis expecting to become a top independent distributor in less than 3 years.
• International growth opportunity - In international markets, Taronis focuses on exclusively selling its own higher margin fuel products where it focuses on the MagneGas advantages in water conservation, sustainability, and safety. The Company's first owner operate model outside of the U.S. is in the Port of Amsterdam. Additionally, it recently signed a JV with a consortium of industry leaders in Turkey to deliver its first international sales in Q320, which should equate to $165M by 1H 2021. The Company believes its environmental advantages countries of Saudi Arabia, UAE, Kuwait, Oman, Bahrain, and Qatar.TGS acquisition enhances cash flow - On May 26, 2020, Taronis acquired TGS, a specialty gas distributor exclusively focused on the HVAC market. This acquisition allows MagneGas to replace the acetylene currently being used and increase gross margins by up to 3x, while adding ~$20M in new revenue and making the combined entity cash flow positive.
• Valuation - We use a comp analysis on current operations along with one of Taronis' LT model. On current operations we use an EV/S to arrive at a valuation range of $0.25 to $0.75, with a midpoint of $0.50. On the LT model, we arrive at a valuation range of $0.55 to $0.70 with a midpoint of $0.60.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:

Stonegate Capital Partners
info@stonegateinc.com
(214) 987-4121

SOURCE: Stonegate Capital Partners