As
filed with the Securities and Exchange Commission on October 18, 2019
Registration
No. 333-230854
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
POST-EFFECTIVE
AMENDMENT
NO. 1
TO
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
TARONIS
TECHNOLOGIES, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
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26-0250418
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|
(State
or other jurisdiction of
incorporation
or organization)
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|
(I.R.S.
Employer
Identification
Number)
|
300
W. Clarendon Ave, #230
Phoenix,
AZ 85013
(866)
370-3835
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Tyler
B. Wilson, Esq.
Chief
Financial Officer &
General
Counsel
300
W. Clarendon Ave, #230
Phoenix,
AZ 85013
(866) 370-3835
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies
to:
Laura
Anthony, Esq.
Craig
D. Linder, Esq.
Anthony
L.G., PLLC
625
N. Flagler Drive, Suite 600
West
Palm Beach, FL 33401
(561)
514-0936
Approximate
date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462I under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer
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[ ]
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Accelerated
filer
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[ ]
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Non-accelerated
filer
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[X]
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Smaller
reporting company
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[X]
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|
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Emerging
growth company
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[ ]
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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. [ ]
CALCULATION
OF REGISTRATION FEE
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Title of each class of securities to be registered
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Amount
to be registered/proposed maximum offering price per security/proposed maximum
aggregate offering price(1)(2)(3)
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Amount of
registration
fee (4)
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Common Stock, par value $0.001 per share
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–
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|
–
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Preferred Stock, par value $0.001 per share
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|
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–
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|
–
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Debt Securities
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|
–
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–
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Warrants
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–
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|
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Rights
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–
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–
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Units
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–
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–
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Total
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$
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100,000,000
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12,120
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(5)
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(1)
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Not
specified as to each class of securities to be registered pursuant to General Instruction II.D. of Form S-3 under the Securities
Act of 1933, as amended (the “Securities Act”).
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(2)
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There
are being registered hereunder an indeterminate number of securities of each identified class as may be issued from time to
time at indeterminate prices, as well as an indeterminate number of shares of common stock and preferred stock as may be issued
upon conversion, exercise or exchange of any of the securities issued directly under this registration statement. No separate
consideration is payable for any shares of common stock and preferred stock so issued upon conversion, exercise or exchange.
Securities registered hereby may be sold separately, together or in units with other securities registered hereby. If any
debt securities are issued at an original issue discount, then the issue price, and not the principal amount of such debt
securities, shall be used for purposes of calculating the aggregate offering price of all securities issued.
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(3)
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The
proposed maximum offering price per security and the proposed
maximum aggregate offering price per class of security will be determined from time to time by the registrant in connection
with its issuance of the securities registered hereunder and is not specified as to each class of security pursuant
to General Instruction II.D. of Form S-3 under the Securities Act. The proposed maximum aggregate offering price has been
estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act.
The aggregate maximum offering price of all securities issued pursuant to this registration statement will not exceed $100,000,000.
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(4)
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The
registration fee has been calculated in accordance with Rule 457(o) under the Securities Act.
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(5)
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The
registration fee has been previously paid.
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY
NOTE
This
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No. 333-230854) (the “Registration
Statement”) of Taronis Technologies, Inc. is being filed to (i) add Debt Securities of Taronis Technologies, Inc., as additional
securities to be offered under the prospectus included herein, (ii) make corresponding changes to the prospectus included in Part
I of the Registration Statement, change the date on the cover page of the prospectus to correspond to the date of this post-effective
amendment and update as appropriate the information contained in such prospectus and (iii) file or incorporate by reference additional
exhibits to the Registration Statement under Item 16 of Part II thereof.
The
information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until
the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject
to completion, dated October 18, 2019
PROSPECTUS
$100,000,000
Common
Stock, Preferred Stock, Debt Securities,
Warrants,
Rights, Units
We
may offer and sell up to $100,000,000 in the aggregate of the securities identified above from time to time in one or more offerings.
This prospectus provides you with a general description of the securities.
Each
time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained
in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement
before you invest in any of our securities.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents
are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount
arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus
supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution”
for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing
the method and terms of the offering of such securities.
Our
common stock is listed on the NASDAQ Capital Market under the symbol “TRNX.” On October 17, 2019, the last
reported sale price of our common stock on the NASDAQ Capital Market was $1.40 per share.
As
of October 18, 2019, the aggregate market value of our outstanding common stock held by non-affiliates was $25,516,736.30 based
on 19,659,617 shares outstanding, of which 18,226,241 shares are held by non-affiliates, and a per share price of $1.40, based
on the last reported sale price of our common shares on the NASDAQ Capital Market on October 17, 2019. As of the date of this
prospectus, we have offered and sold securities with an aggregate sales price of $9,494,557.46 pursuant to General Instruction
I.B.6 to Form S-3 during the 12-calendar month period that ends on and includes the date hereof. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell securities in a public primary offering with a value exceeding more than one-third
of our “public float” (the market value of our common stock held by our non-affiliates) in any 12-month period so
long as our public float remains below $75,000,000.
Investing
in our securities involves risks. See the “risk factors” on page 7 of this prospectus and any similar section contained
in the applicable prospectus supplement concerning factors you should consider before investing in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or
determined if this prospectus supplement or the accompanying prospectus are truthful or complete. Any representation to the contrary
is a criminal offense.
The
date of this prospectus is _________, 2019.
TABLE
OF CONTENTS
You
should rely only on the information contained in or incorporated by reference in this prospectus, any prospectus supplement and
in any free writing prospectus that we have authorized for use in connection with an offering. We have not authorized anyone to
provide you with additional or different information. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information in this prospectus, any accompanying prospectus supplement, the documents incorporated
by reference in this prospectus any accompanying prospectus supplement, and any free writing prospectus that we have authorized
for use in connection with an offering, is accurate only as of the date of those respective documents. Our business, financial
condition, results of operations and prospects may have changed since those dates. You should read this prospectus, any accompanying
prospectus supplement, the documents incorporated by reference in this prospectus and any accompanying prospectus supplement,
and any free writing prospectus that we have authorized for use in connection with an offering, in their entirety before making
an investment decision. You should also read and consider the information in the documents to which we have referred you in the
sections of this prospectus entitled “Information Incorporated by Reference” and “Where You Can Find More Information.”
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the SEC, using a “shelf” registration process. By
using a shelf registration statement, we may sell securities from time to time and in one or more offerings up to a total dollar
amount of $100,000,000 as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus
supplement to this prospectus that contains specific information about the securities being offered and sold and the specific
terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus with
respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus
supplement, you should rely on the prospectus supplement.
Unless
the context otherwise requires, all references to the terms “we,” “us,” “our,” and the “company”
throughout this prospectus supplement mean Taronis Technologies, Inc. and its subsidiaries.
All
references in this prospectus to our financial statements include, unless the context indicates otherwise, the related notes.
The
industry and market data and other statistical information contained in the documents we incorporate by reference are based on
management’s own estimates, independent publications, government publications, reports by market research firms or other
published independent sources, and, in each case, are believed by management to be reasonable estimates. Although we believe these
sources are reliable, we have not independently verified the information.
The
information contained in this prospectus or any accompanying prospectus supplement is accurate only as of the date of this prospectus
or the accompanying prospectus supplement, respectively regardless of the time of delivery of this prospectus or the accompanying
prospectus supplement or of any sale of the securities. We further note that the representations, warranties and covenants made
by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus or the
accompanying prospectus supplement were made solely for the benefit of the parties to such agreement, including, in some cases,
for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty
or covenant to you. Moreover, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs.
OUR
COMPANY
Overview
We
are a technology-based company that is focused on addressing the global constraints on natural resources, including fuel and water.
Our two core technology applications – renewable fuel gasification and water decontamination/sterilization – are derived
from our patented and proprietary Venturi® Plasma Arc System (“Venturi System”). The Venturi System works by generating
a combination of electric current, heat, ultraviolet light and ozone, that affects the feedstock run through the system to create
a chosen outcome, depending on whether the system is in “gasification mode” or “sterilization mode”. We
use our Venturi System to make MagneGas, but it has the ability to gasify many forms of liquids and liquid waste such as used
vegetable, soybean or motor oils, certain types of liquified biomass, ethylene glycol and can be used to sterilize bio-contaminants
in waste and decontaminate water. We also own a controlling interest in a water conservation technology company called the WATER
PILOT®.
Gasification
Mode – MagneGas Cutting Fuel
When
the Venturi System is in “gasification mode” and the appropriate feedstock is passed through the system in a closed
loop with constant recirculation (to achieve the maximum possible gasification rates), it creates a renewable, hydrogen-based
synthetic fuel we call “MagneGas”. We sell MagneGas as a metal cutting fuel as an alternative product to acetylene,
which is the most commonly used metal fuel globally, but also happens to be a non-renewable fossil fuel-based metal cutting fuel.
Alternatively, MagneGas is a cleaner, renewable fuel alternative that creates a flame up to 85% hotter than acetylene and cuts
metal up to 38% faster than acetylene, while maintaining a comparable price. The use of MagneGas is nearly identical to acetylene
making it easy for end-users to adopt our product with limited training. After production, the MagneGas is stored in cylinders
which are then sold to market on a rotating basis.
Over
the last several years we have acquired and maintain a retail distribution network, which allows us to sell and transport MagneGas
to customers in various metalworking industries. Since 2017, we have doubled the range we are able to distribute MagneGas and
are now able to more efficiently address markets within a 500-mile radius of our production hubs in Florida and Texas. Within
the next two years, we plan to create two production hubs in California to serve the western United States. Finally, we have and
intend to continue to acquire complementary gas and welding supply distribution businesses in order to expand the distribution
and use of MagneGas, other industrial gases and related equipment. We have sold to over 30,000 customers in the public and private
sectors.
Sterilization
Mode
When
the Venturi System is in “sterilization mode”, the system may process any number of liquified waste streams. In most
cases we pass the selected waste stream through the system a limited number of times to achieve the maximum sterilization/decontamination
effect on the waste stream. Sterilization mode also produces modest amounts of gas as a byproduct. Our proprietary combination
of electric current, heat, ultraviolet light and ozone has shown an ability to eliminate up to 99.9% of EPA and USDA regulated
pathogens such as e-coli and fecal coliform. We also believe our technology has the capability to eliminate cyanobacteria commonly
referred to as “blue-green algae” and are currently conducting tests to verify that capability.
The
Venturi System forces a high-volume flow of liquid waste through a submerged plasma arc existing between carbon electrodes, a
process which sterilizes the bio-contaminants within the waste without requiring any chemical disinfecting agents. The Venturi
System also releases a clean burning fuel as a byproduct of the decontamination and sterilization process, which can be used to
offset some energy consumption. Because our Venturi Systems are available in various sizes from 50kW to 500kW, they are applicable
to a broad array of end-users, including: (i) large consumers of cutting fuels (construction companies, shipbuilders, heavy industry)
who desire a safer, renewable, and efficient alternative to acetylene and propane, (ii) producers of contaminated waste streams
(commercial manufacturers, farming operations, chemical producers, etc.) who either desire to or are mandated by law to treat
agricultural, pharmaceutical, industrial or manufacturing waste streams prior to release into the ecosystem and (iii) local, state
or federal governments, desirous of decontaminating water sources or reclaiming waste water that is otherwise unusable.
During
2019 and 2018, as part of our retail growth strategy, we acquired a number of businesses with large customer bases through which
we now offer our proprietary MagneGas product in addition to other gases and welding supplies. The majority of our retail locations
are in Texas and California, which we believe are the two top markets for consumption of metal cutting fuels and related supplies.
We also have locations in Florida and Louisiana and recently launched international locations in Amsterdam and San Salvador. We
also market, for sale and licensure, our proprietary plasma arc technology for gasification and the processing of liquid waste
and have developed a global network of brokers to sell our Venturi Systems.
The
WATER PILOT®
The
Company also owns a controlling interest in Water Pilot, LLC. The WATER PILOT® System immediately reduces water consumption
and provides its end users with live remote consumption monitoring for long term leak protection and water asset management. An
integral, client-based alarm and notification system that reports to any mobile device. Water Pilot may be appropriate for a wide
range of businesses or properties with a water meter. The Company currently sells the Water Pilot directly and through a network
of commissioned sales agents across the United States.
Core
Technology
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Submerged
Plasma Arc Flow System Overview
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Our
patented system enables fluid to efficiently pass through a submerged plasma arc.
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To
create synthetic fuel, the fluid must contain hydrogen and oxygen – carbon supply can be facilitated by the electrodes.
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As
the fluid passes through the arc, hydrogen, carbon and oxygen molecules are liberated and gasified.
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A
wide range of feedstocks can produce different gases, with differing flame and heating properties
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Typically,
our fuels are 40-60% ionized hydrogen and 30-40% other synthetic hydrocarbon and carbon compounds.
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To
decontaminate or sterilize waste streams, such as contaminated water or biomass waste, the “feed stock” must be
in liquid form.
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Our
Products
We
have two proprietary products that we market and sell, which are derived from our core technology. The first is our clean, renewable
alternative cutting fuel called “MagneGas”, which is sold at our various locations to retail end users as an alternative
product to acetylene. The second is our Plasma Arc Flow System, which is marketed for sale and licensure to commercial operators
who desire to utilize our technology for gas production (under strict license) or water decontamination and sterilization.
MagneGas
Cutting Fuel
We
currently produce MagneGas, which is comprised primarily of hydrogen and created through a patented protected process. The fuel
can be used as an alternative to acetylene and other natural gas derived fuels for metal cutting and other commercial uses. After
production, the fuel is stored in hydrogen cylinders which are then sold to market on a rotating basis. Independent analyses performed
by the City College of New York and Edison Welding Institute have verified that MagneGas cuts metal at a significantly higher
temperature and faster than acetylene, which is the most commonly used fuel in metal cutting. The use of MagneGas is nearly identical
to acetylene (it merely requires a different welding tip and a regulator) making it easy for end-users to adopt our product with
limited training.
Over
the last several years we have acquired and maintain a retail distribution network, which allows us to sell and transport MagneGas
to customers in various metalworking industries. Since 2017, we have doubled the range we are able to distribute MagneGas and
are now able to more efficiently address markets within a 500-mile radius of our production hubs in Florida and Texas. Within
the next two years we plan to create two production hubs in California to serve the western United States. We have and intend
to continue to acquire complementary gas and welding supply distribution businesses in order to expand the distribution and use
of MagneGas, other industrial gases and related equipment. Finally, we have recently expanded into international markets surrounding
Amsterdam, Netherlands and San Salvador, El Salvador and expect to continue to expand internationally in the coming years. We
have sold to over 30,000 customers in the public and private sectors.
Venturi
System for Sterilization
We
use our Venturi System to make MagneGas, but it has the ability to gasify many forms of liquids and liquid waste such as used
vegetable, soybean or motor oils, certain types of liquified biomass, ethylene glycol and can be used to sterilize bio-contaminants
in waste and decontaminate water. The Venturi System forces a high-volume flow of liquid waste through a submerged plasma arc
existing between carbon electrodes, a process which sterilizes the bio-contaminants within the waste without requiring any chemical
disinfecting agents. The Venturi System also releases a clean burning fuel as a byproduct of the decontamination and sterilization
process, which can be used to offset some energy consumption. Because our Venturi Systems are available in various sizes from
50kW to 500kW, they are applicable to a broad array of end-users, including: (i) large consumers of cutting fuels (construction
companies, shipbuilders, heavy industry) who desire a safer, renewable, and efficient alternative to acetylene, propane (ii) producers
of contaminated waste streams (commercial manufacturers, farming operations, chemical producers, etc.) who either desire to or
are mandated by law to treat agricultural, pharmaceutical, industrial or manufacturing waste streams prior to release into the
ecosystem and (iii) local, state or federal governments, desirous of decontaminating water sources or reclaiming waste water that
is otherwise unusable.
Corporate
Information
Taronis
Technologies, Inc. was organized as 4307 INC. under the laws of the State of Delaware on December 9, 2005. Our corporate headquarters
are located at 300 W. Clarendon Ave., #230, Phoenix, Arizona 85013 and our phone number is (866) 370-3835.
Reports
to Security Holders
We
file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, registration statements and other
items pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with the Securities and Exchange
Commission (“SEC”). The SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information
statements regarding issuers that file electronically with the SEC.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully
consider the risks discussed under the Section captioned “Risk Factors” contained in our most recent Annual Report
on Form 10-K and in our most recent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission subsequent
to the Form 10-K, and in other documents that we subsequently file with the Securities and Exchange Commission, all of which are
incorporated by reference in this prospectus and the accompanying prospectus supplement(s) in their entirety, together with other
information in this prospectus, the accompanying prospectus supplement(s), the information and documents incorporated by reference
herein and therein, and in any free writing prospectus that we have authorized for use in connection with this offering. If any
of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed.
This could cause the trading price of our Common Stock to decline, resulting in a loss of all or part of your investment.
Cautionary
Note Regarding Forward-Looking Statements
This
prospectus (including any documents incorporated by reference herein) contains statements with respect to us which constitute
“forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, and are intended to be covered by the “safe harbor” created by those sections. Forward-looking
statements, which are based on certain assumptions and reflect our plans, estimates and beliefs, can generally be identified by
the use of forward-looking terms such as “believes,” “expects,” “may,” “will,”
“should,” “could,” “seek,” “intends,” “plans,” “estimates,”
“anticipates” or other comparable terms. These forward-looking statements include, but are not limited to, statements
concerning future events, our future financial performance, business strategy and plans and objectives of management for future
operations. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could
cause or contribute to these differences include those discussed in “Risk Factors” in this prospectus supplement and
the documents incorporated by reference herein.
We
caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are
made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise
any such statements to reflect any change in company expectations or in events, conditions or circumstances on which any such
statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking
statements.
You
should read this prospectus, the accompanying prospectus supplement(s), and the documents that we incorporate by reference herein
and therein and have filed as exhibits to the registration statement of which this prospectus is part, completely and with the
understanding that our actual future results may be materially different from what we expect. You should assume that the information
appearing in this prospectus is accurate as of the date on the cover of this prospectus only. Our business, financial condition,
results of operations and prospects may change. We may not update these forward-looking statements, even though our situation
may change in the future, unless we have obligations under the federal securities laws to update and disclose material developments
related to previously disclosed information. We qualify all of the information presented in this prospectus, and particularly
our forward-looking statements, by these cautionary statements.
USE
OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement accompanying this prospectus, we intend to use the net proceeds from this offering
to continue our acquisition strategy and for working capital and general corporate purposes. Such purposes may include research
and development expenditures and capital expenditures. As of the date of this prospectus, we cannot specify with certainty all
of the particular uses of the proceeds from this offering. We will set forth in the applicable prospectus supplement our intended
use for the net proceeds received from the sale of the related securities. Accordingly, we will retain broad discretion over the
use of such proceeds. Pending use of the net proceeds, we may invest the net proceeds in interest-bearing, investment-grade securities.
DESCRIPTION
OF CAPITAL STOCK
General
Our
amended certificate of incorporation authorizes 190,000,000 shares of common stock, $0.001 par value per share, and 10,000,000
shares of preferred stock, $0.001 par value per share. As of October 18, 2019, there were 19,659,617 shares of our
common stock outstanding and no shares of preferred stock outstanding.
Reverse
Split
On
August 22, 2019, the Company effected a 5 for 1 reverse split of its issued and outstanding common stock in order to regain compliance
with the Nasdaq Capital Markets minimum bid price rule. All share information in this Post-Effective Amendment No. 1 to Registration
Statement on Form S-3 is retroactively reflected for the August 22, 2019 reverse split.
Common
Stock
Holders
of our Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Our Common Stock does
not have cumulative voting rights. Holders of our Common Stock representing a majority of the voting power of our capital stock
issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting
of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our certificate of incorporation. Although there are no provisions
in our charter or by-laws that may delay, defer or prevent a change in control, the board of directors is authorized, without
stockholder approval, to issue shares of preferred stock that may contain rights or restrictions that could have this effect.
Holders of Common Stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally
available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate
pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference
over the common stock. Holders of our Common Stock have no pre-emptive rights, no conversion rights and there are no redemption
provisions applicable to our Common Stock.
All
of our outstanding shares of Common Stock are, and the shares of Common Stock to be issued in this offering will be, fully paid
and nonassessable.
Preferred
Stock
Our
certificate of incorporation provides that we are authorized to issue up to 10,000,000 shares of preferred stock with a par value
of $0.001 per share. Our board of directors has the authority, without further action by the stockholders, to issue from time
to time the preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences
and restrictions that the board may determine. The preferences, powers, rights and restrictions of different series of preferred
stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption
provisions, sinking fund provisions and purchase funds and other matters. Each series of preferred stock is to be issued under
our certificate of incorporation and a certificate of designation to be approved by the board of directors of the Company or a
committee thereof and filed with the Secretary of State of the State of Delaware in accordance with the General Corporation Law
of the State of Delaware, including statutory and reported decisional law thereunder. The issuance of preferred stock could adversely
affect the voting power or other rights of the holders of common stock.
Election
of Directors
The
holders of shares of common stock, shall appoint the members of our board of directors. Each share of common stock is entitled
to one vote.
Options
and Warrants
Options
Options
outstanding as of December 31, 2018 and 2017 consisted of the following:
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Options
Outstanding
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Weighted
Average
Exercise Price
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Weighted
Average
Remaining
Life in Years
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Intrinsic
Value
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December 31, 2016
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325
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$
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9,354
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1.23
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1,360
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Granted
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—
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Exercised
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—
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Forfeited
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—
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Expired
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(172
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)
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3,473.00
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December 31, 2017
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153
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15,934.00
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1.58
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-
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Granted
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2,250
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92.85
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10.00
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-
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Exercised
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—
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Forfeited
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—
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Expired
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(93
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)
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16,966.15
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-
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-
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December 31, 2018
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2,310
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469.45
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8.84
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-
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Exercisable at December 31, 2018
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1,802
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As
of December 31, 2018, the fair value of non-vested options totaled $46,700 which will be amortized to expense until December 31,
2019.
The
fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. Key
weighted-average assumptions used to apply this pricing model during the year ended 2018 were as follows:
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Risk free interest rate
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2.84
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%
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Expected term
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10 years
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Volatility
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183
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%
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Dividends
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$
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0
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On
July 12, 2017, the Board of Directors submitted the following actions to the Majority Stockholder for ratification and approval
by consent in lieu of meeting, and the Majority Stockholder has ratified and approved the following actions: approving the Company’s
Amended and Restated 2014 Equity Incentive Award Plan (the “New Plan”), for the principal purpose of increasing the
number of shares that may be issued or transferred pursuant to awards under the New Plan. As of December 31, 2018, and 2017, there
are 2,310 and 153 shares to be issued upon exercise of outstanding options and 765,417 shares remaining available for future issuance
under equity compensation plans.
Common
Stock Warrants
Warrants
outstanding as of December 31, 2018 and 2017 consisted of the following:
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Warrants
Outstanding
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Weighted
Average
Exercise Price
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Weighted
Average
Remaining
Life in Years
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December 31, 2016
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1,533
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13,650.00
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5.80
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Granted
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2,222
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45,563.00
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5.00
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Exercised
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(53
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)
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1,500.00
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Forfeited/Exchanged
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-
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-
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Expired
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(1,480
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)
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13,650.00
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December 31, 2017
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2,222
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45,563.00
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4.45
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Granted
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465,833
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33.01
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2.17
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Exercised
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(750
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)
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1.00
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Expired
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-
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December 31, 2018
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465,083
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249.58
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1.90
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Exercisable at December 31, 2018
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465,083
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During
the year ended December 31, 2018 and 2017 the Company exercised 750 and 53 shares of warrants with cash proceeds
of $750 and $7,937.
At
December 31, 2018 and 2017, the total intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.
In
connection with the October SPA, the Company agreed to grant the investors one common stock purchase warrant for every share of
common stock purchased under the October SPA at an exercise price of $36.55 per share. 218,000 common stock warrants
were issued, expiring on April 14, 2022. The exercise price was subsequently adjusted to $23.2.
In
connection with the August SPA, the Company agreed to grant the investor(s) one common stock purchase warrant for every share
of common stock purchased under the SPA at an exercise price of $36.55 per share. 218,000 common stock warrants were issued,
expiring on August 31, 2019.
During
the first quarter of 2018, the Company issued 750 shares of common stock for the exercise of warrants with cash proceeds of
$750. The fair value of the common stock warrants was $316,501, of which $302,589 was recognized as stock-based compensation for
the year ended December 31, 2018.
Maxim
Group, LLC (“Maxim”) acted as the exclusive placement agent for the Series C preferred stock transaction. The Company
agreed to pay Maxim a cash fee payable upon each closing equal to 6.0% of the gross proceeds ($4,050 in cash fees and a legal
expense reimbursement of $5,000) received by the Company at each Closing (the “Placement Fee”). Such fees were recognized
as stock issuance costs. Additionally, the Company granted to Maxim (or its designated affiliates) warrants to purchase up to
2,222 shares common stock (the “Placement Agent Warrants”). The Placement Agent Warrants expire five (5) years after
the Closing. The Placement Agent Warrants are exercisable at a price per share equal to $4,950, are not be redeemable and are
exercisable for 5 years. The Placement Agent Warrants may be exercised in whole or in part and provide for a “cashless”
exercise, except in the event the shares of common stock issuable upon exercise of the Placement Agent Warrants are registered
for resale, in which case they provide for a “cash” exercise only. The Placement Agent Warrants were recorded at fair
value as stock issuance costs. Although the Placement Agent Warrants contain certain change in control provisions that are potentially
settleable in cash, such settlement is at the Company’s discretion.
Dividends
Since
inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the
foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth
of our business, our board of directors will have the discretion to declare and pay dividends in the future. Payment of dividends
in the future will depend upon our earnings, capital requirements, and other factors, which our board of directors may deem relevant.
Anti-Takeover
Effects of Provisions of the Delaware General Corporation Law and our Certificate of Incorporation and Bylaws
Provisions
of the Delaware General Corporation Law (the “DGCL”) and our certificate of incorporation and bylaws could make it
more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors.
These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and takeover bids
that our board of directors may consider inadequate and to encourage persons seeking to acquire control of us to first negotiate
with our board of directors. We believe that the benefits of increased protection of our ability to negotiate with the proponent
of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition
proposals because, among other things, negotiation of these proposals could result in improved terms for our stockholders.
Delaware
Anti-Takeover Statute. We are subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 prohibits a publicly
held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for
three years following the date the person became an interested stockholder, unless the interested stockholder attained such status
with the approval of our board of directors or unless the business combination is approved in a prescribed manner.
Section
203 of the DGCL generally defines a “business combination” to include, among other things, any merger or consolidation
involving us and the interested stockholder and the sale of more than 10% of our assets.
In
general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our voting stock or
any entity or person associated or affiliated with or controlling or controlled by such entity or person. The restrictions contained
in Section 203 are not applicable to any of our existing stockholders that owned 15% or more of our outstanding voting stock upon
the closing of our initial public offering.
Amendments
to Our Certificate of Incorporation. Under the DGCL, the affirmative vote of a majority of the outstanding shares entitled
to vote thereon and a majority of the outstanding stock of each class entitled to vote thereon is required to amend a corporation’s
certificate of incorporation. Under the DGCL, the holders of the outstanding shares of a class of our capital stock shall be entitled
to vote as a class upon a proposed amendment, whether or not entitled to vote thereon by the certificate of incorporation, if
the amendment would:
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increase
or decrease the aggregate number of authorized shares of such class;
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increase
or decrease the par value of the shares of such class; or
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alter
or change the powers, preferences or special rights of the shares of such class so as to affect them adversely.
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If
any proposed amendment would alter or change the powers, preferences or special rights of one or more series of any class of our
capital stock so as to affect them adversely, but shall not so affect the entire class, then only the shares of the series so
affected by the amendment shall be considered a separate class for the purposes of this provision.
Vacancies
in the board of directors. Our bylaws provide that, subject to limitations, any vacancy occurring in our board of directors
for any reason may be filled by a majority of the remaining members of our board of directors then in office, even if such majority
is less than a quorum. Each director so elected shall hold office until the expiration of the term of the other directors. Each
such directors shall hold office until his or her successor is elected and qualified, or until the earlier of his or her death,
resignation or removal.
Special
Meetings of Stockholders. Under our bylaws, special meetings of stockholders may be called at any time by our President whenever
so directed in writing by a majority of the entire board of directors. Special meetings can also be called whenever one-third
of the number of shares of our capital stock entitled to vote at such meeting shall, in writing, request one. Under the DGCL,
written notice of any special meeting must be given not less than 10 nor more than 60 days before the date of the special meeting
to each stockholder entitled to vote at such meeting.
No
Cumulative Voting. The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors
unless our certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation does not provide
for cumulative voting.
The
NASDAQ Capital Market Listing
Our
common stock is listed on the NASDAQ Capital Market under the symbol “TRNX.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Corporate Stock Transfer, Inc. The transfer agent’s address is 3200
Cherry Creek South Drive, Suite 430, Denver, CO 80209, and its telephone number is (303) 282-4800.
DESCRIPTION
OF THE DEBT SECURITIES
The
debt securities may be either secured or unsecured and will either be our senior debt securities or our subordinated debt securities.
The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying
prospectus supplement. Senior debt securities will be issued under a senior indenture and subordinated debt securities will be
issued under a subordinated indenture. Together, the senior indenture and the subordinated indenture are called indentures in
this description. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular
series of debt securities.
The
following is a summary of selected provisions and definitions of the indentures and debt securities to which any prospectus supplement
may relate. The summary of selected provisions of the indentures and the debt securities appearing below is not complete and is
subject to, and qualified entirely by reference to, all of the provisions of the applicable indenture and certificates evidencing
the applicable debt securities. For additional information, you should look at the applicable indenture and the certificate evidencing
the applicable debt security that is filed as an exhibit to the registration statement that includes this prospectus. In this
description of the debt securities, the words “we,” “us,” or “our” refer only to “Taronis
Technologies, Inc.” and not to any of our subsidiaries, unless we expressly state otherwise or the context otherwise requires.
The
following description sets forth selected general terms and provisions of the applicable indenture and debt securities to which
any prospectus supplement may relate. Other specific terms of the applicable indenture and debt securities will be described in
the applicable prospectus supplement. If any particular terms of the indenture or debt securities described in a prospectus supplement
differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus
supplement.
General
Debt
securities may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate
principal amount for the debt securities of any series. We are not limited as to the amount of debt securities we may issue under
the indentures. Unless otherwise provided in a prospectus supplement, a series of debt securities may be reopened to issue additional
debt securities of such series.
The
prospectus supplement relating to a particular series of debt securities will set forth:
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whether
the debt securities are senior or subordinated;
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the
offering price;
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the
title;
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any
limit on the aggregate principal amount;
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the
person who shall be entitled to receive interest, if other than the record holder on the record date;
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the
date or dates the principal will be payable;
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the
interest rate or rates, which may be fixed or variable, if any, the date from which interest will accrue, the interest payment
dates and the regular record dates, or the method for calculating the dates and rates;
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the
place where payments may be made;
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any
mandatory or optional redemption provisions or sinking fund provisions and any applicable redemption or purchase prices associated
with these provisions;
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if
issued other than in denominations of U.S. $1,000 or any multiple of U.S. $1,000, the denominations in which the debt securities
shall be issuable;
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if
applicable, the method for determining how the principal, premium, if any, or interest will be calculated by reference to
an index or formula;
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if
other than U.S. currency, the currency or currency units in which principal, premium, if any, or interest will be payable
and whether we or a holder may elect payment to be made in a different currency;
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the
portion of the principal amount that will be payable upon acceleration of maturity, if other than the entire principal amount;
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if
the principal amount payable at stated maturity will not be determinable as of any date prior to stated maturity, the amount
or method for determining the amount which will be deemed to be the principal amount;
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if
applicable, whether the debt securities shall be subject to the defeasance provisions described below under “Satisfaction
and Discharge; Defeasance” or such other defeasance provisions specified in the applicable prospectus supplement for
the debt securities;
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any
conversion or exchange provisions;
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whether
the debt securities will be issuable in the form of a global security;
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any
subordination provisions applicable to the subordinated debt securities if different from those described below under “Subordinated
Debt Securities;”
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any
paying agents, authenticating agents, security registrars or other agents for the debt securities, if other than the trustee;
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any
provisions relating to any security provided for the debt securities, including any provisions regarding the circumstances
under which collateral may be released or substituted;
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any
deletions of, or changes or additions to, the events of default, acceleration provisions or covenants;
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any
provisions granting special rights to holders when a specified event occurs;
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any
special tax provisions that apply to the debt securities;
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with
respect to the debt securities that do not bear interest, the dates for certain required reports to the applicable trustee;
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any
and all additional, eliminated or changed terms that will apply to the debt securities; and
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any
other specific terms of such debt securities.
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Unless
otherwise specified in the prospectus supplement, the debt securities will be registered debt securities. Debt securities may
be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at time
of issuance is below market rates. The material U.S. federal income tax considerations applicable to debt securities sold at a
discount will be described in the applicable prospectus supplement.
Exchange
and Transfer
Debt
securities may be transferred or exchanged at the office of the security registrar or at the office of any transfer agent designated
by us.
We
will not impose a service charge for any transfer or exchange, but we may require holders to pay any tax or other governmental
charges associated with any transfer or exchange.
In
the event of any partial redemption of debt securities of any series, we will not be required to:
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issue,
register the transfer of, or exchange, any debt security of that series during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption and ending at the close of business on the day of the mailing;
or
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register
the transfer of or exchange any debt security of that series selected for redemption, in whole or in part, except the unredeemed
portion being redeemed in part.
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We
will appoint the trustee as the initial security registrar. Any transfer agent, in addition to the security registrar initially
designated by us, will be named in the prospectus supplement. We may designate additional transfer agents or change transfer agents
or change the office of the transfer agent.
However,
we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
Global
Securities
The
debt securities of any series may be represented, in whole or in part, by one or more global securities. Each global security
will:
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be
registered in the name of a depositary, or its nominee, that we will identify in a prospectus supplement;
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be
deposited with the depositary or nominee or custodian; and
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bear
any required legends.
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No
global security may be exchanged in whole or in part for debt securities registered in the name of any person other than the depositary
or any nominee unless:
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the
depositary has notified us that it is unwilling or unable to continue as depositary or has ceased to be qualified to act as
depositary and we do not appoint another institution to act as depositary within 90 days;
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an
event of default is continuing with respect to the debt securities of the applicable series; or
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any
other circumstance described in a prospectus supplement has occurred permitting or requiring the issuance of any such security.
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As
long as the depositary, or its nominee, is the registered owner of a global security, the depositary or nominee will be considered
the sole owner and holder of the debt securities represented by the global security for all purposes under the indentures. Except
in the above limited circumstances, owners of beneficial interests in a global security will not be:
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entitled
to have the debt securities registered in their names;
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entitled
to physical delivery of certificated debt securities; or
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considered
to be holders of those debt securities under the indenture.
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Payments
on a global security will be made to the depositary or its nominee as the holder of the global security. Some jurisdictions have
laws that require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws
may impair the ability to transfer beneficial interests in a global security.
Institutions
that have accounts with the depositary or its nominee are referred to as “participants.” Ownership of beneficial interests
in a global security will be limited to participants and to persons that may hold beneficial interests through participants. The
depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of debt securities
represented by the global security to the accounts of its participants.
Ownership
of beneficial interests in a global security will be shown on and effected through records maintained by the depositary, with
respect to participants’ interests, or any participant, with respect to interests of persons held by participants on their
behalf.
Payments,
transfers and exchanges relating to beneficial interests in a global security will be subject to policies and procedures of the
depositary. The depositary policies and procedures may change from time to time. Neither any trustee nor we will have any responsibility
or liability for the depositary’s or any participant’s records with respect to beneficial interests in a global security.
Payment
and Paying Agents
Unless
otherwise indicated in a prospectus supplement, the provisions described in this paragraph will apply to the debt securities.
Payment of interest on a debt security on any interest payment date will be made to the person in whose name the debt security
is registered at the close of business on the record date. Payment on debt securities of a particular series will be payable at
the office of a paying agent or paying agents designated by us. However, at our option, we may pay interest by mailing a check
to the record holder. The trustee will be designated as our initial paying agent.
We
may also name any other paying agents in a prospectus supplement. We may designate additional paying agents, change paying agents
or change the office of any paying agent. However, we will be required to maintain a paying agent in each place of payment for
the debt securities of a particular series.
All
moneys paid by us to a paying agent for payment on any debt security that remain unclaimed for a period ending the earlier of:
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10
business days prior to the date the money would be turned over to the applicable state; or
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at
the end of two years after such payment was due,
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will
be repaid to us thereafter, and the holder may then look only to us for such payment.
No
Protection in the Event of a Change of Control
Unless
otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will
not contain any provisions that may afford holders of the debt securities protection in the event we have a change in control
or in the event of a highly leveraged transaction, whether or not such transaction results in a change in control.
Covenants
Unless
otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will
not contain any financial or restrictive covenants.
Consolidation,
Merger and Sale of Assets
Unless
we indicate otherwise in a prospectus supplement with respect to a particular series of debt securities, we may not consolidate
with or merge into any other person (other than one of our subsidiaries), in a transaction in which we are not the surviving corporation,
or convey, transfer or lease our properties and assets substantially as an entirety to, any person (other than one of our subsidiaries),
unless:
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the
successor entity, if any, is a U.S. corporation, limited liability company, partnership, trust or other business entity;
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the
successor entity assumes our obligations on the debt securities and under the indentures;
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immediately
after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and
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certain
other conditions specified in the indenture
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Events
of Default
Unless
we indicate otherwise in a prospectus supplement, the following will be events of default for any series of debt securities under
the indentures:
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we
fail to pay principal of or any premium on any debt security of that series when due;
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we
fail to pay any interest on any debt security of that series for 30 days after it becomes due;
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we
fail to deposit any sinking fund payment when due;
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we
fail to perform any other covenant in the indenture and such failure continues for 90 days after we are given the notice required
in the indenture; and
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certain
events involving our bankruptcy, insolvency or reorganization.
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Additional
or different events of default applicable to a series of debt securities may be described in a prospectus supplement. An event
of default of one series of debt securities is not necessarily an event of default for any other series of debt securities.
The
trustee may withhold notice to the holders of any default, except defaults in the payment of principal, premium, if any, interest,
any sinking fund installment on, or with respect to any conversion right of, the debt securities of such series. However, the
trustee must consider it to be in the interest of the holders of the debt securities of such series to withhold this notice.
Unless
we indicate otherwise in a prospectus supplement, if an event of default, other than an event of default described in the last
bullet point above, shall occur and be continuing with respect to any series of debt securities, either the trustee or the holders
of at least 25 percent in aggregate principal amount of the outstanding securities of that series may declare the principal amount
and premium, if any, of the debt securities of that series, or if any debt securities of that series are original issue discount
securities, such other amount as may be specified in the applicable prospectus supplement, in each case together with accrued
and unpaid interest, if any, thereon, to be due and payable immediately.
Unless
we indicate otherwise in a prospectus supplement, if an event of default described in the last bullet point above shall occur,
the principal amount and premium, if any, of all the debt securities of that series, or if any debt securities of that series
are original issue discount securities, such other amount as may be specified in the applicable prospectus supplement, in each
case together with accrued and unpaid interest, if any, thereon, will automatically become immediately due and payable. Any payment
by us on the subordinated debt securities following any such acceleration will be subject to the subordination provisions described
below under “Subordinated Debt Securities.”
Notwithstanding
the foregoing, each indenture may provide that we may, at our option, elect that the sole remedy for an event of default relating
to our failure to comply with our obligations described under the section entitled “Reports” below or our failure
to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act will for the first 180 days after the occurrence
of such an event of default consist exclusively of the right to receive additional interest on the relevant series of debt securities
at an annual rate equal to (i) 0.25% of the principal amount of such series of debt securities for the first 90 days after the
occurrence of such event of default and (ii) 0.50% of the principal amount of such series of debt securities from the 91st day
to, and including, the 180th day after the occurrence of such event of default, which we call “additional interest.”
If we so elect, the additional interest will accrue on all outstanding debt securities from and including the date on which such
event of default first occurs until such violation is cured or waived and shall be payable on each relevant interest payment date
to holders of record on the regular record date immediately preceding the interest payment date. On the 181st day after such event
of default (if such violation is not cured or waived prior to such 181st day), the debt securities will be subject to acceleration
as provided above. In the event we do not elect to pay additional interest upon any such event of default in accordance with this
paragraph, the debt securities will be subject to acceleration as provided above.
In
order to elect to pay the additional interest as the sole remedy during the first 180 days after the occurrence of any event of
default relating to the failure to comply with the reporting obligations in accordance with the preceding paragraph, we must notify
all holders of debt securities and the trustee and paying agent of such election prior to the close of business on the first business
day following the date on which such event of default occurs. Upon our failure to timely give such notice or pay the additional
interest, the debt securities will be immediately subject to acceleration as provided above.
After
acceleration, the holders of a majority in aggregate principal amount of the outstanding securities of that series may, under
certain circumstances, rescind and annul such acceleration if all events of default, other than the non-payment of accelerated
principal, or other specified amounts or interest, have been cured or waived.
Other
than the duty to act with the required care during an event of default, the trustee will not be obligated to exercise any of its
rights or powers at the request of the holders unless the holders shall have offered to the trustee reasonable indemnity. Generally,
the holders of a majority in aggregate principal amount of the outstanding debt securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust
or power conferred on the trustee.
A
holder of debt securities of any series will not have any right to institute any proceeding under the indentures, or for the appointment
of a receiver or a trustee, or for any other remedy under the indentures, unless:
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the
holder has previously given to the trustee written notice of a continuing event of default with respect to the debt securities
of that series;
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the
holders of at least 25 percent in aggregate principal amount of the outstanding debt securities of that series have made a
written request and have offered reasonable indemnity to the trustee to institute the proceeding; and
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the
trustee has failed to institute the proceeding and has not received direction inconsistent with the original request from
the holders of a majority in aggregate principal amount of the outstanding debt securities of that series within 60 days after
the original request.
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Holders
may, however, sue to enforce the payment of principal, premium or interest on any debt security on or after the due date or to
enforce the right, if any, to convert any debt security (if the debt security is convertible) without following the procedures
listed above.
We
will furnish the trustee an annual statement from our officers as to whether or not we are in default in the performance of the
conditions and covenants under the indenture and, if so, specifying all known defaults.
Modification
and Waiver
Unless
we indicate otherwise in a prospectus supplement, the applicable trustee and we may make modifications and amendments to an indenture
with the consent of the holders of a majority in aggregate principal amount of the outstanding securities of each series affected
by the modification or amendment.
We
may also make modifications and amendments to the indentures for the benefit of holders without their consent, for certain purposes
including, but not limited to:
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evidencing
the succession of another person to us, or successive successions, and the assumption by any such successor of our covenants
in the indentures in compliance with Article 8 of the indentures;
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adding
covenants or events of default;
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making
certain changes to facilitate the issuance of the securities;
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adding
to, changing or eliminating any of the provisions of the indentures or more series of securities, provided that any such addition,
change or elimination (A) shall neither (i) apply to any security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the rights of the holder of any such security with
respect to such provision or (B) shall become effective only when there is no such security outstanding;
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securing
the debt securities;
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providing
for a successor trustee or additional trustees;
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conforming
the indenture to the description of the debt securities set forth in this prospectus or the accompanying prospectus supplement;
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curing
any ambiguity, defect or inconsistency; provided that such action shall not adversely affect the interest of the holders in
any material respect;
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permitting
or facilitating the defeasance and discharge of the securities;
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making
such other provisions in regard to matters or questions arising under the indentures or under any supplemental indentures
as our board of directors may deem necessary or desirable, and which does not in each case adversely affect the interests
of the holders of the debt securities of a series; and
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complying
with requirements of the U.S. Securities and Exchange Commission in order to effect or maintain the qualifications of the
indentures under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
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However,
neither the trustee nor we may make any modification or amendment without the consent of the holder of each outstanding security
of that series affected by the modification or amendment if such modification or amendment would:
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change
the stated maturity of the principal of, or any installment of principal or interest on, any debt security;
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reduce
the principal, premium, if any, or interest on any debt security or any amount payable upon redemption or repurchase, whether
at our option or the option of any holder, or reduce the amount of any sinking fund payments;
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reduce
the principal of an original issue discount security or any other debt security payable on acceleration of maturity;
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change
the place of payment or the currency in which any debt security is payable;
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impair
the right to enforce any payment after the stated maturity or redemption date;
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if
subordinated debt securities, modify the subordination provisions in a materially adverse manner to the holders;
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adversely
affect the right to convert any debt security if the debt security is a convertible debt security; or
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change
the provisions in the indenture that relate to modifying or amending the indenture.
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Satisfaction
and Discharge; Defeasance
We
may be discharged from our obligations on the debt securities, subject to limited exceptions, of any series that have matured
or will mature or be redeemed within one year if we deposit enough money with the trustee to pay all the principal, interest and
any premium due to the stated maturity date or redemption date of the debt securities.
Each
indenture contains a provision that permits us to elect either or both of the following:
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We
may elect to be discharged from all of our obligations, subject to limited exceptions, with respect to any series of debt
securities then outstanding. If we make this election, the holders of the debt securities of the series will not be entitled
to the benefits of the indenture, except for the rights of holders to receive payments on debt securities or the registration
of transfer and exchange of debt securities and replacement of lost, stolen or mutilated debt securities.
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We
may elect to be released from our obligations under some or all of any financial or restrictive covenants applicable to the
series of debt securities to which the election relates and from the consequences of an event of default resulting from a
breach of those covenants.
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To
make either of the above elections, we must irrevocably deposit in trust with the trustee enough money to pay in full the principal,
interest and premium on the debt securities. This amount may be made in cash and/or U.S. government obligations or, in the case
of debt securities denominated in a currency other than U.S. dollars, cash in the currency in which such series of securities
is denominated and/or foreign government obligations. As a condition to either of the above elections, for debt securities denominated
in U.S. dollars we must deliver to the trustee an opinion of counsel that the holders of the debt securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the action.
With
respect to debt securities of any series that are denominated in a currency other than United States dollars, “foreign government
obligations” means:
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direct
obligations of the government that issued or caused to be issued the currency in which such securities are denominated and
for the payment of which obligations its full faith and credit is pledged, or, with respect to debt securities of any series
which are denominated in Euros, direct obligations of certain members of the European Union for the payment of which obligations
the full faith and credit of such members is pledged, which in each case are not callable or redeemable at the option of the
issuer thereof; or
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obligations
of a person controlled or supervised by or acting as an agency or instrumentality of a government described in the bullet
above the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government,
which are not callable or redeemable at the option of the issuer thereof.
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Reports
The
indentures provide that any reports or documents that we file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
will be filed with the trustee within 15 days after the same are filed with the SEC, and that documents filed by us with the SEC
via the EDGAR system will be deemed filed with the trustee as of the time such documents are filed with the SEC.
Notices
Notices
to holders will be given by mail to the addresses of the holders in the security register.
Governing
Law
The
indentures and the debt securities will be governed by, and construed under, the laws of the State of New York.
No
Personal Liability of Directors, Officers, Employees or Stockholders
No
incorporator, stockholder, employee, agent, officer, director or subsidiary of ours will have any liability for any obligations
of ours, or because of the creation of any indebtedness under the debt securities, the indentures or supplemental indentures.
The indentures provide that all such liability is expressly waived and released as a condition of, and as a consideration for,
the execution of such indentures and the issuance of the debt securities.
Regarding
the Trustee
The
indentures limit the right of the trustee, should it become our creditor, to obtain payment of claims or secure its claims.
The
trustee will be permitted to engage in certain other transactions with us. However, if the trustee acquires any conflicting interest,
and there is a default under the debt securities of any series for which it is trustee, the trustee must eliminate the conflict
or resign.
Subordinated
Debt Securities
The
following provisions will be applicable with respect to each series of subordinated debt securities, unless otherwise stated in
the prospectus supplement relating to that series of subordinated debt securities.
The
indebtedness evidenced by the subordinated debt securities of any series is subordinated, to the extent provided in the subordinated
indenture and the applicable prospectus supplement, to the prior payment in full, in cash or other payment satisfactory to the
holders of senior debt, of all senior debt, including any senior debt securities.
Upon
any distribution of our assets upon any dissolution, winding up, liquidation or reorganization, whether voluntary or involuntary,
marshalling of assets, assignment for the benefit of creditors, or in bankruptcy, insolvency, receivership or other similar proceedings,
payments on the subordinated debt securities will be subordinated in right of payment to the prior payment in full in cash or
other payment satisfactory to holders of senior debt of all senior debt.
In
the event of any acceleration of the subordinated debt securities of any series because of an event of default with respect to
the subordinated debt securities of that series, holders of any senior debt would be entitled to payment in full in cash or other
payment satisfactory to holders of senior debt of all senior debt before the holders of subordinated debt securities are entitled
to receive any payment or distribution.
In
addition, the subordinated debt securities will be structurally subordinated to all indebtedness and other liabilities of our
subsidiaries, including trade payables and lease obligations. This occurs because our right to receive any assets of our subsidiaries
upon their liquidation or reorganization, and your right to participate in those assets, will be effectively subordinated to the
claims of that subsidiary’s creditors, including trade creditors, except to the extent that we are recognized as a creditor
of such subsidiary. If we are recognized as a creditor of that subsidiary, our claims would still be subordinate to any security
interest in the assets of the subsidiary and any indebtedness of the subsidiary senior to us.
We
are required to promptly notify holders of senior debt or their representatives under the subordinated indenture if payment of
the subordinated debt securities is accelerated because of an event of default.
Under
the subordinated indenture, we may also not make payment on the subordinated debt securities if:
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a
default in our obligations to pay principal, premium, if any, interest or other amounts on our senior debt occurs and the
default continues beyond any applicable grace period, which we refer to as a payment default; or
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any
other default occurs and is continuing with respect to designated senior debt that permits holders of designated senior debt
to accelerate its maturity, which we refer to as a non-payment default, and the trustee receives a payment blockage notice
from us or some other person permitted to give the notice under the subordinated indenture.
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We
will resume payments on the subordinated debt securities:
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in
case of a payment default, when the default is cured or waived or ceases to exist, and
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in
case of a nonpayment default, the earlier of when the default is cured or waived or ceases to exist or 179 days after the
receipt of the payment blockage notice.
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No
new payment blockage period may commence on the basis of a nonpayment default unless 365 days have elapsed from the effectiveness
of the immediately prior payment blockage notice. No nonpayment default that existed or was continuing on the date of delivery
of any payment blockage notice to the trustee shall be the basis for a subsequent payment blockage notice.
As
a result of these subordination provisions, in the event of our bankruptcy, dissolution or reorganization, holders of senior debt
may receive more, ratably, and holders of the subordinated debt securities may receive less, ratably, than our other creditors.
The subordination provisions will not prevent the occurrence of any event of default under the subordinated indenture.
The
subordination provisions will not apply to payments from money or government obligations held in trust by the trustee for the
payment of principal, interest and premium, if any, on subordinated debt securities pursuant to the provisions described under
the section entitled “Satisfaction and Discharge; Defeasance,” if the subordination provisions were not violated at
the time the money or government obligations were deposited into trust.
If
the trustee or any holder receives any payment that should not have been made to them in contravention of subordination provisions
before all senior debt is paid in full in cash or other payment satisfactory to holders of senior debt, then such payment will
be held in trust for the holders of senior debt.
Senior
debt securities will constitute senior debt under the subordinated indenture.
Additional
or different subordination provisions may be described in a prospectus supplement relating to a particular series of debt securities.
Definitions
“Designated
senior debt” means our obligations under any particular senior debt in which the instrument creating or evidencing the same
or the assumption or guarantee thereof, or related agreements or documents to which we are a party, expressly provides that such
indebtedness shall be designated senior debt for purposes of the subordinated indenture. The instrument, agreement or other document
evidencing any designated senior debt may place limitations and conditions on the right of such senior debt to exercise the rights
of designated senior debt.
“Indebtedness”
means the following, whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of the
indenture for such series of securities or thereafter created, incurred or assumed:
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our
indebtedness evidenced by a credit or loan agreement, note, bond, debenture or other written obligation;
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all
of our obligations for money borrowed;
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all
of our obligations evidenced by a note or similar instrument given in connection with the acquisition of any businesses, properties
or assets of any kind,
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our
obligations:
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as
lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles,
or
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as
lessee under leases for facilities, capital equipment or related assets, whether or not capitalized, entered into or leased
for financing purposes;
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all
of our obligations under interest rate and currency swaps, caps, floors, collars, hedge agreements, forward contracts or similar
agreements or arrangements;
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all
of our obligations with respect to letters of credit, bankers’ acceptances and similar facilities, including reimbursement
obligations with respect to the foregoing;
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all
of our obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts
payable and accrued liabilities arising in the ordinary course of business;
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all
obligations of the type referred to in the above clauses of another person, the payment of which, in either case, we have
assumed or guaranteed, for which we are responsible or liable, directly or indirectly, jointly or severally, as obligor, guarantor
or otherwise, or which are secured by a lien on our property; and
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renewals,
extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange
for, any such indebtedness or obligation described in the above clauses of this definition.
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“Senior
debt” means the principal of, premium, if any, and interest, including all interest accruing subsequent to the commencement
of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such
proceeding, and rent payable on or in connection with, and all fees and other amounts payable in connection with, our indebtedness.
However, senior debt shall not include:
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any
debt or obligation if its terms or the terms of the instrument under which or pursuant to which it is issued expressly provide
that it shall not be senior in right of payment to the subordinated debt securities or expressly provide that such indebtedness
is on the same basis or “junior” to the subordinated debt securities; or
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debt
to any of our subsidiaries, a majority of the voting stock of which is owned, directly or indirectly, by us.
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“Subsidiary”
means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by us or by one or
more of our other subsidiaries or by a combination of us and our other subsidiaries. For purposes of this definition, “voting
stock” means stock or other similar interests which ordinarily has or have voting power for the election of directors, or
persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has
or have such voting power by reason of any contingency
DESCRIPTION
OF WARRANTS
General
We
may issue warrants to purchase shares of our common stock and preferred stock in one or more series together with other securities
or separately, as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions
of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements to be entered
into by the Company, a warrant agent to be named by the Company, and the holders from time to time of the warrants and the prospectus
supplement relating to the warrants. Copies of the form agreement for each warrant and the warrant certificate, if any, reflecting
the provisions to be included in such agreements that will be entered into with respect to a particular offering of each type
of warrant, will be filed with the SEC and incorporated by reference as exhibits to the registration statement of which this prospectus
is a part. You should read the applicable warrant agreement for additional information before you purchase any of our warrants.
The
prospectus supplement relating to any warrants we offer will describe the specific terms relating to the offering. These terms
may include some or all of the following:
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the
specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the
currency or currency units in which the offering price, if any, and the exercise price are payable;
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the
designation, amount and terms of the securities purchasable upon exercise of the warrants;
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if
applicable, the exercise price for shares of our common stock and the number of shares of common stock to be received upon
exercise of the warrants;
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if
applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon
exercise, and a description of that series of our preferred stock;
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the
date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not
continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether
the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of
these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit;
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any
applicable material U.S. federal income tax consequences;
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the
identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars or other agents;
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the
proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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if
applicable, the date from and after which the warrants and the common stock and preferred stock will be separately transferable;
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if
applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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the
procedures and conditions relating to the exercise of the warrants;
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information
with respect to book-entry procedures, if any;
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the
triggering event and the terms upon which the exercise price and the number of underlying securities that the warrants are
exercisable into may be adjusted;
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the
anti-dilution provisions of the warrants, if any;
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any
redemption or call provisions;
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whether
the warrants may be sold separately or with other securities as parts of units; and
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any
additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the
warrants.
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Until
the warrants are exercised, holders of the warrants will not have any rights of holders of the underlying securities.
DESCRIPTION
OF RIGHTS
We
may issue rights to our stockholders to purchase shares of our common stock or preferred stock described in this prospectus. We
may offer rights separately or together with one or more additional rights, preferred stock, common stock, warrants or any combination
of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be
issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights
agent for any rights we offer will be set forth in the applicable prospectus supplement. The rights agent will act solely as our
agent in connection with the certificates relating to the rights of the series of certificates and will not assume any obligation
or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following
description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular
terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may
apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms
of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described
below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to
read the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any
of our rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among
other matters:
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the
date of determining the stockholders entitled to the rights distribution;
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the
aggregate number of shares of common stock, preferred stock or other securities purchasable upon exercise of the rights;
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the
exercise price;
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the
aggregate number of rights issued;
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whether
the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;
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the
date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will
expire;
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the
method by which holders of rights will be entitled to exercise;
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the
conditions to the completion of the offering;
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the
withdrawal, termination and cancellation rights;
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whether
there are any backstop or standby purchaser or purchasers and the terms of their commitment;
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whether
stockholders are entitled to oversubscription right;
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any
U.S. federal income tax considerations; and
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any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise
of the rights.
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If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to
persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including
pursuant to standby arrangements, as described in the applicable prospectus supplement. In connection with any rights offering,
we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which
such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.
DESCRIPTION
OF UNITS
We
may, from time to time, issue units comprised of one or more of the other securities described in this prospectus in any combination.
A prospectus supplement will describe the specific terms of the units offered under that prospectus supplement, and any special
considerations, including tax considerations, applicable to investing in those units. You must look at the applicable prospectus
supplement and any applicable unit agreement for a full understanding of the specific terms of any units. We will incorporate
by reference into the registration statement of which this prospectus is a part the form of unit agreement, including a form of
unit certificate, if any, that describes the terms of the series of units we are offering before the issuance of the related series
of units. While the terms we have summarized below will generally apply to any future units that we may offer under this prospectus,
we will describe the particular terms of any series of units that we may offer in more detail in the applicable prospectus supplement
and incorporated documents. The terms of any units offered under a prospectus supplement may differ from the terms described below.
General
We
may issue units consisting of common stock, preferred stock, rights, warrants or any combination thereof. Each unit will be issued
so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have
the rights and obligations of a holder of each included security. The unit agreement to be entered into by the Company and the
unit agent named therein under which a unit is issued may provide that the securities included in the unit may not be held or
transferred separately, at any time, or at any time before a specified date.
We
will describe in the applicable prospectus supplement and any incorporated documents the terms of the series of units, including
the following:
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the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
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any
provisions of the governing unit agreement that differ from those described below; and
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any
provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities comprising the units.
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The
provisions described in this section, as well as those described under “Description of Securities We Are Offering –
Common Stock,” “Description of Securities We Are Offering – Preferred Stock,” “Description of Rights,”
and “Description of Warrants” will apply to each unit and to any common stock, preferred stock, warrant or right included
in each unit, respectively.
Issuance
in Series
We
may issue units in such amounts and in such numerous distinct series as we determine.
Enforceability
of Rights by Holders of Units
Each
unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship
of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series
of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or
unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any
holder of a unit, without the consent of the related unit agent or the holder of any other unit, may enforce by appropriate legal
action its rights as holder under any security included in the unit.
Title
We,
the unit agent, and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units
evidenced by that certificate for any purposes and as the person entitled to exercise the rights attaching to the units so requested,
despite any notice to the contrary.
PLAN
OF DISTRIBUTION
We
may sell the securities described in this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions,
block trades or a combination of these methods. We may sell the securities separately or together:
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directly
to investors, including through a specific bidding, auction, or other process;
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to
investors through agents;
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directly
to agents;
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to
or through brokers or dealers;
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to
the public through underwriting syndicates led by one or more managing underwriters;
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in
privately negotiated transactions;
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directly
to agents;
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to
one or more underwriters acting alone for resale to investors or to the public;
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in
a registered direct offering; or
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through
a combination of any such methods of sale.
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Our
common stock or preferred stock may be issued upon conversion of convertible preferred. Securities may also be issued upon exercise
of warrants or rights and division of units and we reserve the right to sell securities directly to investors on their own behalf
in those jurisdictions where they are authorized to do so.
If
we sell securities to a dealer acting as principal, the dealer may resell such securities at varying prices to be determined by
such dealer in its discretion at the time of resale without consulting with us and such resale prices may not be disclosed in
the applicable prospectus supplement.
Any
underwritten offering may be on a best-efforts or a firm commitment basis. We may also offer securities through subscription
rights distributed to our stockholders on a pro rata basis, which may or may not be transferable. In any distribution of subscription
rights to stockholders, if all of the underlying securities are not subscribed for, we may then sell the unsubscribed securities
directly to third parties or may engage the services of one or more underwriters, dealers or agents, including standby underwriters,
to sell the unsubscribed securities to third parties.
We
may distribute the securities from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices;
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at
varying prices determined at the time of sale; or
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at
negotiated prices.
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Any
of the prices may represent a discount from the then prevailing market prices.
We
may determine the price or other terms of the securities offered under this prospectus by use of an electronic auction. We will
describe in the applicable prospectus supplement how any auction will be conducted to determine the price or any other terms of
the securities, how potential investors may participate in the auction and, where applicable, the nature of the underwriters’
obligations with respect to the auction.
We
may solicit directly offers to purchase the securities being offered by this prospectus. We may also designate agents to solicit
offers to purchase the securities from time to time. We will name in a prospectus supplement any agent involved in the offer or
sale of the securities.
If
we utilize an underwriter in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement
with the underwriter at the time of sale and we will provide the name of any underwriter in the prospectus supplement that the
underwriter will use to make resales of the securities to the public. Any underwritten offering may be on a best efforts or firm
commitment basis. In connection with the sale of the securities, we or the purchasers of the securities for whom the underwriter
may act as agent may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell
the securities to or through dealers, and the underwriter may compensate those dealers in the form of discounts, concessions or
commissions.
We,
our underwriters, dealers or agents may facilitate the marketing of an offering online directly or through one of their affiliates.
In those cases, prospective investors may view offering terms and a prospectus online and, depending upon the particular underwriter,
dealer or agent, place orders online or through their financial advisors.
We
will provide in the applicable prospectus supplement (i) the identity of any underwriter, dealer or agent, (ii) any compensation
we will pay to underwriters, dealers or agents in connection with the offering of the securities, (iii) any discounts, concessions
or commissions allowed by underwriters to participating dealers, (iv) the amounts underwritten; and (v) the nature of the underwriter’s
or underwriters’ obligation to take the securities. Underwriters, dealers and agents participating in the distribution of
the securities may be deemed to be underwriters within the meaning of the Securities Act, and any discounts and commissions received
by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions.
We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under
the Securities Act, or to contribute to payments they may be required to make in respect thereof.
Unless
otherwise specified in the related prospectus supplement, each series of securities will be a new issue with no established trading
market, other than shares of common stock, which are listed on the NASDAQ Capital Market, subject to official notice of issue.
Any common stock sold pursuant to a prospectus supplement will be eligible for listing and trading on the NASDAQ Capital Market.
We may elect to list any series of preferred stock, warrants, rights, debt securities, or units on an exchange, but we are not
obligated to do so. It is possible that one or more underwriters may make a market in the securities, but such underwriters will
not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the
liquidity of, or the trading market for, any offered securities.
To
facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which
involve the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these
persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment
option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing the securities
in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may
be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions. The effect of these
transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail
in the open market. These transactions may be discontinued at any time.
We
do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above
might have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such
transactions or that such transactions, once commenced, will not be discontinued without notice.
We
may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase the securities at the public
offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. The contracts will be subject only to those conditions set forth in the prospectus supplement,
and the prospectus supplement will set forth any commissions we pay for solicitation of these contracts.
We
may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties
in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives,
the parties may sell securities covered by this prospectus and the applicable prospectus supplement, including short sale transactions.
If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any
related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any
related open borrowings of stock. If the third party is or may be deemed to be an underwriter under the Securities Act, it will
be identified in the applicable prospectus supplement. In addition, we may otherwise loan or pledge securities to a financial
institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution
or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent
offering of other securities.
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions
only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have
been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement
is available and is complied with.
The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business.
LEGAL
MATTERS
Anthony
L.G., PLLC and/or Tyler B. Wilson, Esq., our General Counsel will
pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of Taronis Technologies.
Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the
applicable prospectus supplement.
EXPERTS
Marcum
LLP, independent registered public accounting firm, has audited our financial statements included in our Annual Report on Form
10-K for the year ended December 31, 2018, as set forth in their report (which contains an explanatory paragraph relating to our
ability to continue as a going concern as described in the notes to the consolidated financial statements) which is incorporated
by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference
in reliance on Marcum LLP’s report, given on their authority as experts in accounting and auditing.
Where
You Can Find More Information
This
prospectus supplement is part of a registration statement on that we filed with the SEC under the Securities Act of 1933, as amended,
and does not contain all the information set forth in the registration statement. Whenever a reference is made in this prospectus
supplement to any of our contracts, agreements or other documents, the reference may not be complete, and you should refer to
the exhibits that are a part of the registration statement of which this prospectus supplement is a part, or the exhibits to the
reports or other documents incorporated by reference in this prospectus supplement for a copy of such contract, agreement or other
document.
Because
we are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, we file annual,
quarterly and special reports, and other information with the SEC. Our SEC filings are available to the public over the Internet
at the SEC’s website at http://www.sec.gov.
The
website addresses referenced herein are not intended to function as hyperlinks, and the information contained in our website and
in the SEC’s website is not incorporated by reference into this prospectus supplement and should not be considered to be
part of this prospectus supplement.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows us to incorporate by reference into this prospectus supplement the information contained in other documents we file
with the SEC, which means that we can disclose important information to you by referring you to those documents. Any statement
contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded,
for purposes of this prospectus supplement, to the extent that a statement contained in or omitted from this prospectus supplement,
or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this prospectus supplement. This prospectus supplement incorporates by reference our documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the securities are
sold:
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Our
Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on April 12, 2019.
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Our
Quarterly Report on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019, filed with the SEC on May 20, 2019
and August 19, 2019, respectively.
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Our
Current Reports on Form 8-K and Form 8-K/A, filed with the SEC on January 11, 2019 (two on this date), January 15, 2019, January
18, 2019, January 24, 2019, January 28, 2019, January 31, 2019, February 4, 2019, February 5, 2019, February 7, 2019, February
8, 2019, February 11, 2019, February 13, 2019, February 19, 2019 (two on this date), February 28, 2019, March 8, 2019,
May 3, 2019, May 13, 2019, June 3, 2019, June 6, 2019, June 19, 2019, July 12, 2019, July 17, 2019, July 25, 2019, August
20, 2019, August 21, 2019, September 4, 2019, September 23, 2019 and October 15, 2019.
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Our
Definitive Proxy Statement on Schedule 14A filed on July 29, 2019, but only to the extent that such information was incorporated
by reference into our Annual Report on Form 10-K for the year ended December 31, 2018.
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The
description of our common stock contained in our registration statement on Form 8-A filed with the SEC on August 14, 2012,
under Section 12(b) of the Exchange Act, including any amendments or reports filed for the purpose of updating such description.
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Notwithstanding
the foregoing, we are not incorporating any document or portion thereof or information deemed to have been furnished and not filed
in accordance with SEC rules.
You
may request a free copy of the above-mentioned filings or any subsequent filings we incorporate by reference to this prospectus
supplement by writing or telephoning us at the following address: Taronis Technologies, Inc., 16165 N. 83rd Ave.,
Ste 200, Peoria, Arizona 85382, (866) 370-3835
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with
the securities being registered hereby other than the SEC registration fee and the FINRA filing fee.
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SEC registration fee
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$
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12,120
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FINRA filing fee
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$
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15,500(1
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)
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The NASDAQ Capital Market supplement listing fee
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|
$
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(1
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)
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Fees and expenses of the trustee
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$
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(1
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)
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Printing expenses
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|
$
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(1
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)
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|
Legal fees and expenses
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|
$
|
(1
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)
|
|
Accounting fees and expenses
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|
$
|
(1
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)
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|
Blue Sky, qualification fees and expenses
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|
$
|
(1
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)
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|
Transfer agent fees and expenses
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|
$
|
(1
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)
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|
Miscellaneous
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|
$
|
(1
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)
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Total
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$
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27,620(1)(2
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)
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(1)
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These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this
time.
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(2)
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The
fees were previously paid.
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Item
15. Indemnification of Directors and Officers.
The
Delaware General Corporation Law and our certificate of incorporation and by-laws provide for indemnification of our directors
and officers for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of
the registrant and, with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to
believe were unlawful.
Our
certificate of incorporation provides that no director shall be personally liable to us or to our stockholders for monetary damages
for breach of fiduciary duty as a director, except that the limitation shall not eliminate or limit liability to the extent that
the elimination or limitation of such liability is not permitted by the Delaware General Corporation Law as the same exists or
may hereafter be amended.
Our
by-laws further provide for the indemnification of our directors and officers to the fullest extent permitted by Section 145 of
the Delaware General Corporation Law, including circumstances in which indemnification is otherwise discretionary. A principal
effect of these provisions is to limit or eliminate the potential liability of our directors for monetary damages arising from
breaches of their duty of care, subject to certain exceptions. These provisions may also shield directors from liability under
federal and state securities laws.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in
a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final adjudication of such issue.
We
maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising
out of claims based on acts or omissions in their capacities as directors or officers.
Item
16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
The
exhibits to the registration statement for this offering are listed in the Exhibit Index attached hereto and incorporated by reference
herein.
(b)
Financial Statement Schedules.
No
financial statement schedules have been submitted because they are not required or are not applicable or because the information
required is included in the consolidated financial statements or the notes thereto.
Item
17. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i.
To include any prospectus required by section 10(a)(3) of the Securities Act;
ii.
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
iii.
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
Provided
however, that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant
pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement,
or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)
each prospectus filed pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and
(ii)
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing
of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable ground to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this Post-Effective Amendment No. 1 to Registration
Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Phoenix, State of Arizona,
on October 18, 2019.
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TARONIS
TECHNOLOGIES, INC.
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By:
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/s/
Scott Mahoney
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Scott
Mahoney
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Chief
Executive Officer
(Principal
Executive Officer)
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We,
the undersigned officers and directors of Taronis Technologies, Inc., hereby constitute and appoint Scott Mahoney, as our true
and lawful attorney-in-fact and agent, with full power of substitution and re-substitution in each of them for him and in his
name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to
this registration statement (and any other registration statement for the same offering that is to be effective upon filing pursuant
to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises,
as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to Registration Statement has been
signed by the following persons in the capacities held on the dates indicated.
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Signature
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Title
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Date
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/s/
SCOTT MAHONEY
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Chief
Executive Officer and Director
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October
18, 2019
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Scott
Mahoney
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(Principal
Executive Officer)
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/s/
TYLER WILSON
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Chief
Financial Officer & General Counsel
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October
18, 2019
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Tyler
Wilson
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(Principal
Financial and Accounting Officer)
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/s/
ROBERT DINGESS
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Robert
Dingess
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Director
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October
18, 2019
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/s/
KEVIN POLLACK
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Kevin
Pollack
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Director
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October
18, 2019
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/s/
WILLIAM STAUNTON
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William
Staunton
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Director
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October
18, 2019
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EXHIBIT
INDEX
*
To be filed by amendment, as an exhibit to a Current Report on Form 8-K or by other applicable filing with the SEC to be
incorporated by reference herein.
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**
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To
be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939.
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