Outlines Significant Progress Toward Improving Cash Flow and Future Value Creation for ALL Shareholders
Urges Shareholders to IGNORE any WHITE Consent Solicitation Card and Reject the Activist Group’s Attempts to Disrupt the Company’s Positive Momentum
The letter outlines Taronis’s significant progress toward improving cash flow and future value creation and urges shareholders to defend against the Activist Group’s attempt to disrupt Taronis’s positive momentum and seize control of the company without paying a premium.
The Board of Directors of
The letter sent to shareholders highlights the following points.
- The Board and management have taken numerous recent actions, which are outlined in the letter, to fuel growth, improve the Company’s capital position and become cash flow positive in the second quarter of 2021.
The Activist Group is trying to disrupt Taronis’s positive momentum at a critical time for the Company.- Based on prior actions and statements made by certain of the
Activist Group nominees, the Board believes that if theActivist Group gains control of the Company, it would potentially reduce investment in the Company’s proprietary fuel, MagneGas, terminate key personnel and institute salary cuts for employees with the technical capabilities needed to maximize the value of the Company’s intellectual property. - The Activist Group’s
March 12, 2021 letter contains baseless allegations and misstatements.
The full text of the letter is as follows:
Dear Taronis Shareholders,
We are writing on behalf of the Board of Directors of
Two shareholders,
If the Activist Group’s proposals prevail, they will take ALL of the seats of your five-member Board, and they will effectively take control of the Company – without paying a premium for it.
We urge you to support the Board of
If you have already returned a WHITE card, you can change your vote by revoking your consent, and keep supporting the Board of
YOUR BOARD AND MANAGEMENT HAVE MADE SIGNIFICANT PROGRESS TOWARD IMPROVING CASH FLOW AND FUTURE VALUE CREATION FOR ALL SHAREHOLDERS
Under your current Board,
- Expanding our whole industrial gas operations into
California andArizona , which is expected to result in retail sales growth of more than 20% and wholesale revenue growth of nearly 50% in 2021. - Aggressively reducing operating expenses, including a reduction in annual payroll and benefit expenses of approximately
$8 million , or 40% during the first quarter of 2021.
- Completing several critical capital expenditures updates, which are expected to result in an additional
$1 million in annual savings. - Eliminating nearly
$2 million in cash liabilities and expenses by restructuring certain contractual obligations in exchange for common stock, without a discount to current market value, and without any warrants or other future rights.
- Attracting several critical new hires across multiple retail markets, which are expected to accelerate projected revenue growth in 2021.
- Retaining and incentivizing talent through the issuance of a one-time, company-wide stock retention grant to all employees, with the exception of officers and directors.
THE ACTIVIST GROUP IS TRYING TO DISRUPT TARONIS’S POSITIVE MOMENTUM
AT A CRITICAL TIME FOR THE COMPANY
Our decisive actions to put the Company on a better path forward are beginning to bear fruit, and the Board believes
Additionally, shortly after her appointment as Chief Financial Officer, a position she held for only six weeks, it became clear that
If the
In addition, several of our key employees, including our Chief Technology Officer, MagneGas, business development specialists, and regional sales executives have expressed their unwillingness to remain with the Company if the
We believe the Activist Group’s intended actions could potentially be quite value destructive. We urge you to ignore and not return any WHITE consent solicitation card sent to you by the
DON’T BE FOOLED BY THE ACTIVISTS’ BASELESS ALLEGATIONS
AND MISLEADING STATEMENTS
Put simply, the members of the
The Activist Group states thatMr. Wetherald has no desire to engage in an activist campaign – but his actions clearly say otherwise. Your Board tried at the outset of their campaign to engage in a constructive dialogue with theActivist Group to avoid an expensive and disruptive proxy contest and has made clear our interest in reaching a mutually agreeable settlement. However, theActivist Group responded that it would not accept anything short of replacing of all five members of your Board and taking over your Company.
The Activist Group erroneously states that concernsMs. Thompson raised around certain accounting practices related to adjustments for costs of goods sold were “ignored” – this is categorically false. The Board formed a Special Committee of the Board of Directors to investigate this matter, and the Special Committee hired independent, outside counsel as well as a nationally recognized independent registered public accounting firm to lead the investigation.- Finally, your Board takes any concern around misconduct seriously, and did so in response to allegations of wrongdoing, including breach of fiduciary duties, by
Mr. Welo andMs. Thompson when they served on the Board andMs. Thompson served as the Company’s CFO fromNovember 2020 toDecember 2020 . Contrary to statements in the Activist Group’s letter, this investigation was not “quickly dropped the next month”; rather, the Special Committee of the Board of Directors continued to investigate these matters, aided by independent legal counsel, despite the fact that Welo and Thompson resigned after being faced with the allegations. The Special Committee of the Board of Directors ultimately determined that both Welo and Thompson breached their fiduciary duties of loyalty and care by sharing non-public and confidential information with Wetherald.
YOUR BOARD SERVES THE INTERESTS OF ALL SHAREHOLDERS
We urge you to defend against the
SUPPORT TARONIS’S STRONG, INDEPENDENT BOARD BY NOT RETURNING ANY WHITE CARD SENT TO YOU BY WETHERALD AND WELO
For the foregoing reasons, we strongly urge you to support your Board and reject the Activist Group’s efforts to deliver control of the Company to a new board of directors consisting of their handpicked director candidates.
The Consent Revocation Statement filed by the Company with the
IF YOU HAVE MISTAKENLY RETURNED A WHITE CARD AND WANT TO CONTINUE SUPPORTING YOUR EXISTING BOARD, SUBMIT THE ENCLOSED GREEN CONSENT REVOCATION CARD TODAY
Your experienced and qualified Board and management team continue to be focused on delivering value to our shareholders. You can defend against the Activist Group’s efforts to take control of the Company through the following steps:
1. | Do not sign the Activist Group’s white consent card and do not return the white consent card. So you can really show your support for the Company by DOING NOTHING. | |
2. | If you already signed the Activist Group’s white consent card, you can revoke that consent by signing, dating and returning the enclosed GREEN Consent Revocation Card immediately in the pre-paid envelope provided. | |
Regardless of the number of shares of
If you have any questions regarding the Consent Revocation Statement or about submitting your GREEN Consent Revocation Card, or otherwise require assistance, please contact:
(212) 929-5500 or (800) 322-2885
Email: TRNF@mackenziepartners.com
Sincerely,
The Board of Directors
Important Additional Information and Where to Find It
In connection with the consent solicitation initiated by Wetherald/Welo and the
Certain Information Regarding Participants to the Solicitation
The Company, its directors and certain of its executive officers will be participants in the solicitation of consent revocations from the Company’s stockholders. Information regarding the participants of
Forward-Looking Statements
This press release contains forward-looking information about TRNF within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Any statements contained herein which do not describe historical facts, including, among others, the belief that any corporate action taken must be for the benefit of all Company shareholders and must be rooted in a strong understanding of the industrial gas and welding supply industry, TRNF’s business and its important milestones ahead, beliefs about TRNF’s strategy and long-term value creation, beliefs about TRNF’s strategic plan and implementation thereof, beliefs about TRNF’s financial profile and its Board and expectations as to and beliefs about the consent solicitation are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements.
Such risks and uncertainties include, among others, the impact and results of the consent solicitation and other activism activities by Wetherald/Welo, the
About TRNF
Lastly, we strive to deliver products that offer significant function superiority at a reduced cost to the end consumer. Through these efforts, we support 9 of the 17 United Nations Sustainable Development Goals. For more information, please visit our website at www.taronisfuels.com.
Taronis Fuels Contacts:
Investors:
ir@taronisfuels.com
or
212-929-5500
Proxy@mackenziepartners.com
Media:
Reevemark
(212) 433-4600
Taronis@reevemark.com
Source:
2021 GlobeNewswire, Inc., source