Taronis Technologies

US: TRNX

$6.6m market cap

$0.7 last close

Taronis is a technology company that has developed a plasma-based system for renewable fuel gasification and water decontamination. This process generates a hydrogen-based fuel called MagneGas as a by-product that is sold as an alternative metal-cutting fuel to acetylene.

Investment summary

Taronis’s preliminary sales figures for January show the seven successive acquisitions made over the last year driving a fivefold year-on-year increase in monthly sales to $1.42m. Importantly, the figures show 42% growth compared with December, as activity has picked up after the holiday period.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2016A 3.6 (9.6) (10.3) (620.5) N/A N/A
2017A 3.7 (10.3) (11.0) (306.2) N/A N/A
2018E 10.0 (11.5) (13.7) (4.3) N/A N/A
2019E 23.4 (4.2) (6.0) (0.3) N/A N/A
Last updated on 19/03/2019
Industry outlook

In February, Taronis acquired an industrial gas services business based in East Texas for $1.5m cash. The business adds over $1m of high margin service revenues annually and has the potential to cut around $50k of operating expenses each month from the existing operations in East Texas and Louisiana. The transaction was funded using some of the anticipated $13.5m (gross) from the fund-raising announced earlier this month. This involves a placing of 10.8m new shares at $1.25/share together with warrants to purchase up to 8.1m new shares, also exercisable at $1.25/share. While this has had a highly dilutive impact, management notes that the group is now well funded for the foreseeable future.

Last updated on 19/03/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net cash (US$m) 10.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (18.2) (85.3) (96.5)
Relative* (19.7) (87.0) (96.7)
52-week high/low US$20.6/US$0.6
*% relative to local index
Key management
Scott Mahoney CFO