Taronis Technologies, Inc.
- Company Name
- Taronis Technologies, Inc.
- Stock Symbol
- Class Period
- January 28, 2019 to February 12, 2019
- Motion Deadline
- June 11, 2019
- Middle District of Florida
The complaint charges Taronis and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Taronis owns a patented plasma arc technology that enables two end use applications for fuel generation and water decontamination. The Company’s fuel technology enables a wide use of hydrocarbon based waste streams to be readily converted to fossil fuel substitutes. The Company currently markets a proprietary metal cutting fuel that is highly competitive with acetylene.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose that adverse information regarding Taronis’s business and prospects. Specifically, contrary to defendants’ representations, the Company did not have a contract with the City of San Diego and would have to retract its prior statement regarding the purported contract. As result of defendants’ misrepresentations, the price of Taronis stock traded at artificially inflated prices during the Class Period.
On January 28, 2019, the Company announced that the City of San Diego had elected to use its process known as MagneGas as its metal cutting fuel of choice, marking the first major city contract for the adoption of this technology. On this news, the Company’s stock rapidly increased over 25% in the following days, reaching an intra-day high of $5.89 per share on January 31, 2019.
On January 29, 2019, the Company effectuated a reverse stock split, with every 20 shares of outstanding stock becoming 1 share of stock on the close of business January 31, 2019. On January 31, 2019, the Company changed its name to Taronis from MagneGas Applied Technology Solutions, Inc. And on February 6, 2019, the Company announced a secondary stock offering of more than 3 million shares.
Then on February 12, 2019, the Company filed a Form 8-K with the SEC, which stated that the “Company has determined that it is necessary to correct its prior disclosure. The Company has an approval and written authorization from the City of San Diego . . . to move forward with the procurement of gas and other hard goods from the Company . . . . The Company treats purchase orders as contracts and made its prior disclosure with that treatment in view, however, the Company does not have any formal binding contracts, agreements or long-term purchase commitments with the City of San Diego beyond the existing approval, nor any commitment that any of the Company’s products will be purchased as the products of choice for their respective applications.” On this news, Taronis stock closed at $0.92 per share, a decline of more than 84% from the stock’s intra-day high on January 31, 2019.