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CORRESP
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January
9, 2020

Division
of Corporation Finance

Office
of Technology

Attn:
Michael Foland, Kathleen Krebs,

Claire
DeLabar and Christine Dietz

U.S.
Securities & Exchange Commission

Washington,
D.C. 20549

    Re:
    Taronis Fuels, Inc.

    Registration
Statement on Form 10-12G

    Filed
September 30, 2019

    File
No. 000-56101

    Comment
Letter dated December 18, 2019

Dear
Staff,

Taronis
Fuels, Inc. (the “Company”) has reviewed your December 18, 2019 comment letter to the Company’s Registration
Statement on Form 10-12G and has the following replies:

Form
10-12G filed September 30, 2019

Amendment
No. 2 to Form 10-12G filed December 13, 2019

Financial
Statements

Note
4 – Acquisitions, page F-14

 1. We
                                         note your response to prior comment 2. Since the historical operations of the Taronis
                                         Fuels business of Taronis Technologies are considered the predecessor to the registrant,
                                         please provide audited financial statements and pro forma information required pursuant
                                         to Rule 8-04(c)(3) of Regulation S-X for individually insignificant businesses acquired
                                         by the predecessor that were significant to the predecessor in the aggregate.

Reply:
Taronis is a producer of renewal fuel products, including a proprietary industrial gas product, called MagneGas, which competes
with acetylene for metal cutting applications. The Company had successfully introduced this product in its retail operations in
Florida, and sought to expand its retail reach into new, larger US markets for industrial gas products.

In
early 2017, the Company determined that in order to efficiently expand its retail reach, it would be best to focus on an expansion
model that included acquisitions of existing, small, independent, privately held industrial gas distributors. Specifically, the
Company sought to identify retail operations in the greater Texas and greater California markets due to the strength of these
markets within the overall domestic industrial gas industry.

The
primary rationale for this strategy was to expand the Company’s existing retail model that had been successful in the Florida
market. The Texas and California markets possess very large, diverse end markets for metal cutting fuels such as acetylene and
propane. The Company determined that in order to accelerate its existing growth model, it would be beneficial to selectively expand
its retail capabilities in these two new markets in order to use MagneGas as a wedge product to solicit new clients, which in
turn would consider buying a wide range of ancillary, non-proprietary products such as other industrial gases, metal cutting protective
gear, welding equipment and consumable goods used for metal fabrication or metal cutting. In most instances, the Company significantly
expanded the overall product offering as compared to those products offered by the legacy retail operator.

Given
the Company’s limited access to capital in 2017, the Company prioritized small, independent retail industrial gas distributors
as acquisition targets. All of the prospective targets were family owned and operated, with limited technical accounting staff,
less sophisticated record keeping, with a primary focus to maintain accounting records solely for tax reporting purposes. Across
the prospective acquisition targets overall, the accounting records were in a state to adequately verify the assets and liabilities
acquired as of the date of each transaction, but in general these companies were not adequately prepared to conduct independently
audited statements for their companies on a look back basis via a commercially reasonable process in accordance with US GAAP accounting
standards without undue cost or hardship, especially as it relates to the acquired inventory.

It
is also important to note that these acquisitions were not made for the purposes of acquiring any one business itself per se,
but rather to expand the Company’s existing Florida based business model. The Company sought to expand its geographic reach,
introducing its proprietary products and determined that making acquisitions was a more efficient manner to source the assets
and personnel to expand outside of its historical footprint. With this as an overall backdrop, please see the specific details
for each acquisition made in 2018 and 2019:

NG
Enterprises, LLC: The Company acquired the majority of the assets of this company on January 1, 2018 for $745,000 in cash.
The Company primarily acquired NG’s commoditized industrial gas and welding supply product inventory, as well as industrial
gas cylinders and a heavily used delivery vehicle. Three employees transitioned to Taronis, and all of the legacy NG customers’
information was also transferred. The 2017 annual revenues for this location were approximately $450,000 with no long term contracts.

Post
acquisition, the Company then added additional staffing, implemented a completely new accounting and point of sale software, remodeled
the retail location, and began to focus on marketing MagneGas as the lead product.

The
purchase was not significant from any of the three significant tests; Investment to Issuer Assets, Assets of Target to Assets
of the Issue, or Target’s Income to Income of Issuer, as none of these three measurements exceeded the 20% significance
level. At the time of the acquisition, the target was not prepared to be audited as a standalone business due to the prior owner’s
limited accounting resources and antiquated accounting system. The limited asset base that was acquired was primarily inventory
and accounts receivable which represented less than half the purchase price. Almost all other assigned value under this transaction
was attributable to goodwill.

Although
this was a comparatively small transaction, the Company did conduct a thorough review of the inventory and accounts receivable
acquired, verified the outstanding accounts payable transferred with third party vendors, and was able to reconcile the Seller’s
records to the assigned values on the opening balance sheet using traditional GAAP accounting procedures that fully supported
the opening balance sheet audit process and the purchase price allocation as required for the 2018 annual audit.

For
shareholders of Taronis Fuels, the financial statements included in the Form 10 for 2018 and 2019 include the operations of the
former NG Enterprises assets for the past 21 months. The Company believes that shareholders have an accurate and comprehensive
understanding of the impact on the NG Enterprise transaction on the financial condition of Taronis Fuels. Lastly, the current
sales of this location represent less than 4% of combined monthly sales, which includes the sales for our proprietary products.

Green
Arc Supply, LLC: The Company acquired the majority of the operating assets of this Company on February 16, 2018 for a $1,000,000
and common stock having a fair value of $1,500,000 for a total consideration of $2.5 million.

This
was a start up industrial gas distributor formed at the beginning of 2017, with less than 12 months of operations when the previous
owners agreed in principle to sell Green Arc to Taronis at the end of 2018. At that time, Green Arc had three retail branches
with a total of eight employees. The consideration paid was exclusively for working capital assets, brand new industrial gases
fill plant, new industrial gas cylinders, as well as several new company vehicles used to transport product.

Post
closing of the acquisition, there was a substantial overhaul in operations, with almost a 50% change in staffing immediately after
closing. The entire accounting system was overhauled to support GAAP-compliant financial reporting. Almost none of the legacy
client sales history was conveyed due to conflicts between the legacy point of sale system and the system currently used across
all of Taronis’ retail operations.

From
a significance perspective, this transaction was significant on a stand-alone basis using the carved out Taronis Fuels financial
statements, triggering a 21% significance for the purchase price relative to the Taronis asset base. The purchase price was allocated
almost entirely to like-new, long lived equipment and industrial gas cylinders, with 87% of the purchase price allocated to these
assets. The remaining 13% was allocated to cash, accounts receivable and inventory acquired. No value was allocated to goodwill,
intangibles, brand, customer lists or any other assets that would normally indicate residual value from the acquisition of an
operating business.

Normally,
at a 21% significance level, this would indicate that one year of audited financial statements and pro forma information required
pursuant to Rule 8-04(c)(3) of Regulation S-X for individually insignificant businesses acquired by the predecessor that were
significant to the predecessor in the aggregate. It should be noted that as a start up with limited operating history, the Seller
could in theory have only provided one year of operating history for business level audit purposes. However, at the present time,
that would no longer be a commercially viable alternative. The transaction took place almost two years ago, and the seller did
not convey the majority of the documents that would be required to support the audit process due to the fact that this was structured
as an asset purchase and the Seller retained the legacy Green Arc Supply legal entity for unrelated legal and tax purposes.

As
the buyer, the Company only required recent customer information and sufficient recent point of sale data to establish new client
profiles on Taronis’ new point of sale software. Given this was an asset purchase and none of the legacy data was incorporated
into the acquirer’s systems, the Company did not require the conveyance of the documents required to support an audit at
the time of closing or at this time.

It
is important to note that when the Company made the acquisition in February of 2018, there was no expectation that the transaction
would be subject to a business level audit other than the necessary documentation to support the opening balance sheet verification
for the purchase price allocation. As a result, the Company only required specific documentation related to accounts receivable,
inventory on the date of closing, and long lived assets that were conveyed at closing. While this documentation was extensive
and adequate to support the 2018 audit process for Taronis Technologies, it was not sufficient to support the full look back audit
of the historical operations of Green Arc Supply as a standalone business pursuant to Rule 8-04(c)(3) of Regulation S-X for individually
insignificant businesses.

Given
that the Green Arc transaction took place two years ago and has been incorporated into its financial statements for 20 months,
the Company believes shareholders have a clear understanding of the financial impact of the Green Arc transaction on the financial
condition of Taronis Fuels as presented in the Form 10.

Trico
Welding Supplies, Inc.: The Company acquired Trico via a stock purchase agreement for $2.0 million on April 3, 2018. The Company
acquired control of a family owned business that had been in operations since the mid 1980s. As a family run business, the family
solely operated the business on a cash basis, not in accordance with GAAP accounting standards, and only for annual tax reporting
purposes. Trico also used a highly antiquated accounting software that was extremely limited in its functionality. As this was
a stock purchase, the Company engaged a third party audit firm based in Orange County, CA to conduct an independent audit due
to the scale of operations and the fact that as a stock purchase, as the Company sought to have independent validation of the
financial statements, including liabilities of the target.

However,
after over three months of work by the auditor and significant cash costs to Taronis, the Company determined that the target could
not within commercially reasonable parameters support the independent audit process. Instead, the Company used the cash bank statements,
payroll, sales tax records, merchant card processing statements and vendor purchase order statements independently recreate a
simplified income statement of the target. Even this streamlined process took over three months to accomplish, but provided the
Board of Directors of the Company sufficient risk management data to approve the transaction.

At
the time of the transaction, none of the three significance tests would exceed a 20% threshold for the Trico transaction on a
stand-alone basis. However, when this transaction was aggregated with the NG Enterprises and Green Arc transactions, two of the
significance tests exceed a 40% threshold and would otherwise require the presentation of two years of audited financial statements.

It
is the Company’s position that the audit of these financial statements would not be commercial reasonable at the time of
the transaction or at this time. Due to the extremely antiquated nature of the Seller’s accounting software, none of the
legacy accounting information was transferred to the Buyer. In addition, the Seller did not continue to pay for access to their
legacy accounting information, and thus the Seller’s accounting records are no longer maintained by the software vendor.
Lastly, one of the three partners within the Selling party has deceased, and some of their records are not available to support
an audit. Consequently, the Company has no commercially viable way to replicate the Seller’s accounting records to support
an audit.

It
is important to note that since the transaction has closed, shareholders have seen financial impact of Trico on the Taronis Fuels
financial statements for 9 months of 2018, included as part of the year-end audit 2018, as well as for the first nine months of
2019.

Paris
Oxygen, Inc.: On October 17, 2018, the Company acquired a single retail location in Paris, TX for $1.25 million via a stock
purchase agreement. The primary assets acquired were working capital assets, including accounts receivable and inventory, as well
as industrial gas cylinders. The transaction also included the transfer of all legacy customer relationships, as well as the hiring
of three former Paris Oxygen employees by the Company.

The
transaction did not trigger any significance thresholds on a stand-alone basis as part of Taronis Fuels. However, when aggregated
with the prior transactions, it would normally require the transaction to be aggregated and audited financial statements and pro
forma information required pursuant to Rule 8-04(c)(3) of Regulation S-X be provided. However, this is not commercially reasonable
to produce at this time. The records of the Seller were not maintained in a manner that would support a GAAP compliant audit of
the full business.

Due
to the limited size of the transaction, the Company conducted an extensive but informal internal audit process similar to process
described for the Trico transaction. It is important to note that these assets have been fully audited since acquisition, as they
were included in the audit process for the period ended December 31, 2018. Lastly, the current sales of this location represent
less than 5% of combined monthly sales, which includes sales of the Company’s proprietary products.

Latex
Welding Supply: On October 22, 2018, the Company acquired a single retail location in Shreveport, LA for $1.5 million via
a stock purchase agreement. The primary assets acquired were working capital assets, including inventory and industrial gas cylinders.
The transaction also included the transfer of all legacy customer relationships, as well as the hiring of three former