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TRNF Taronis Fuels

Filed: 24 Nov 20, 5:21pm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 18, 2020

 

TARONIS FUELS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware 000-56101 32-0547454

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employee

Identification No.)

 

24980 N. 83rd Avenue, Suite 100

Peoria, AZ 85383

(Address of principal executive offices) (Zip Code)

 

(866) 370-3835

Registrant’s telephone number, including area code:

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[  ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
[  ]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
[  ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
[  ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
None N/A N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

   
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On November 18, 2020 and November 20, 2020, Taronis Fuels, Inc., a Delaware corporation (the “Company”), held two closings in connection with a private placement offering (the “Offering”) of shares of its restricted common stock, par value $0.000001 (the “Common Stock”), in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D and Rule 506(b) as promulgated thereunder. In connection with the Offering, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with several accredited investors (each a “Purchaser” and, collectively, the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers an aggregate of 124,000,000 shares of restricted Common Stock at a price per share of $0.10. The Company received a total of $12,400,000 in gross proceeds from the Offering, before deducting Offering expenses and commissions, including the placement agents’ aggregate commissions of $699,000, and reimbursement of one of the placement agent’s legal fees and other expenses in the amount of $216,375.

 

The Purchase Agreement contains customary representations, warranties, and covenants of the Company. The Company agreed to indemnify the Purchasers and certain of their affiliates from any breaches of the representations, warranties, or covenants made by the Company in the Purchase Agreement.

 

In connection with the Offering, on November 18, 2020, the Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Pursuant to the Registration Rights Agreement, within thirty (30) days of November 18, 2020 the Company is required to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1 covering the registration and resale on a continuous basis of the Common Stock issued to the Purchasers in the Offering. The Registration Statement also provides the Purchasers piggy-back registration rights in the event there is not an effective registration statement covering their shares of Common Stock issued in the Offering and the Company determines to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act.

 

The foregoing description of the terms of the Purchase Agreement and Registration Rights Agreement, and the transactions contemplated thereby, does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Purchase Agreement and form of Registration Rights Agreement, copies of which are filed hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated by reference into this Item 1.01.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

To the extent required by Item 3.02 of Form 8-K, the information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

 

On November 6, 2020, the Company issued 4,385,965 shares of restricted Common Stock pursuant to a Confidentiality, Non-Disclosure, and Non-Solicitation Agreement entered into with an employee. The shares were issued with a price per share of $0.1140, which was the closing price of the Common Stock on the OTCQB on November 6, 2020. The shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) under the Securities Act.

 

On October 21, 2020, the Company issued a warrant to the lender under its senior secured asset-based revolving credit facility to purchase 8,000,000 shares of Common Stock with an exercise price of $0.1250 and an expiration date of five years from the date of issuance. The warrant represents a 10% warrant coverage on the full credit facility commitment of $10 million. The warrant was issued in reliance upon the exemption from registration provided by Section 4(a)(2) under the Securities Act.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No. Description
10.1 Form of Common Stock Purchase Agreement dated as of November 18, 2020 by and among Taronis Fuels, Inc. and the Purchasers set forth on the signature pages
10.2 Form of Registration Rights Agreement dated as of November 18, 2020 by and among Taronis Fuels, Inc. and the Purchasers set forth on the signature pages

 

   
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 24, 2020TARONIS FUELS, INC.
   
 By:/s/ Scott Mahoney
 Name:Scott Mahoney
 Title:Chief Executive Officer