Item 1.01 Entry into a Material Definitive Agreement.
Exchange Agreement
On March 31, 2020, Taronis Technologies, Inc. (the "Company") entered into an
Exchange Agreement ("Exchange Agreement") with an accredited investor
("Holder"). The Company previously issued to the Holder a total of 5,808,627
shares of common stock for the cancellation of indebtedness ("Common Stock"),
pursuant to an exemption from the registration requirements of Section 5 of the
Securities Act of 1933, as amended (the "Securities Act") contained in Section
4(a)(2) thereof. Under the terms of the Exchange Agreement the Holder has agreed
to convey, transfer and assign the Common Stock back to the Company in exchange
for 5,808,627 Prefunded Warrants ("Prefunded Warrants") in reliance on the
exemption from issuance provided by Section 3(a)(9) of the Securities Act. The
Exchange Agreement contains additional terms typical of exchange agreements.
The above description of the Exchange Agreement does not purport to be complete
and is qualified in its entirety by the Form of Exchange Agreement, which is
incorporated herein and attached hereto as Exhibit 10.1.
Prefunded Warrant
In conjunction with the Exchange Agreement, the Company issued to the Holder a
Prefunded Warrant to purchase up to 5,808,627 shares of our common stock, par
value $0.001 per share ("Prefunded Warrant"), that may be issued to the Holder
upon the exercise of the Prefunded Warrants, which Prefunded Warrants, having an
aggregate prefunded value of $1,370,550 (prefunded value of $0.236 per warrant).
The Prefunded Warrant was issued to the Holder in an exchange under Section
3(a)(9) of the Securities Act, for 5,808,627 shares of Common Stock, having an
aggregate value of $1,370,500 ($0.236 per share), originally issued to Holder
for the cancellation of indebtedness pursuant to an exemption from registration
afforded by Section 4(a)(2) of the Securities Act. The Prefunded Warrant
contains additional terms typical of prefunded warrants.
We will receive an aggregate of $58,086.27 in proceeds from the exercise of the
Prefunded Warrants for cash. The exercise price of each Prefunded Warrant will
equal $0.01 per share.
The above description of the Prefunded Warrant does not purport to be complete
and is qualified in its entirety by the Form of Prefunded Warrant, which is
incorporated herein and attached hereto as Exhibit 10.2.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
5.1 Opinion of Legal Counsel
10.1 Form of Exchange Agreement dated March 31, 2020
10.2 Form of Prefunded Warrant
23.1 Consent of Legal Counsel (contained in Exhibit 5.1)
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