"News Flash"

Another college paper by our resident global oil guru Gregg Bigger!
Wow...in the face of all the questions asked by investors this is what is given! Not a word on KMI...or the dwindling cash status!

He is trying to desperately extend this but he does not have the chops this time as the SEC is watching closely and investors are fuming from the continuous distortion of the truth.

"companies who have interest in the technology. and yet the only one that has actually installed the AOT is one company. One of the redacted firms is even said to be very interested in it - yet no install.

That's not particularly encouraging.

Interested in what others think.
"

Exactly there is not a single deal that has arisen as a result of all these supposed key players interests.

"
Good to see the SEC dont waste there time with such frivolous claims and put the matter to bed. "

Official correspondence from the the SEC is anything but frivolous especially given the fact that Qsep has agreed to modify its disclosures based on what the SEC laid out. Specifically to exclude "proven" or to make claims that their Aot has demonstrated itself to be of any benefit to a key player in the space.

"Explain the basis for your claim at page 5 that “key players in the pipeline industry continue to demonstrate strong interest in our technologies.” Identify those “key players” and explain how they have demonstrated their “strong interest.”

RESPONSE 4
We are working actively with the following companies: [The material below identified as redacted has been omitted and provided separately to the staff of the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 83.]

Kinder Morgan Crude and Condensate (“KMCC”)
Our AOT technology is currently installed on its 200,000 barrel per day pipeline providing takeaway for the Eagle Ford Shale in South Texas. As discussed in our response to Item 3, KMCC continues to work cooperatively with QS Energy to resolve known issues in operating the AOT with condensate fuel. Subject to final acceptance of a modified AOT device, KMCC has agreed to lease the AOT equipment at a cost of $20,000 per month, with an option to purchase the equipment. See QS Energy’s Form 8-K filed July 21, 2014.

<REDACTED>
QS Energy is in current negotiations with <REDACTED>, a crude oil transportation and storage company (<REDACTED>) to enter into a Joint Development Agreement to test the efficacy of QS Energy’s AOT equipment on <REDACTED>’s high-volume crude oil transportation infrastructure. If successful testing is achieved, <REDACTED> has expressed an interest to acquire additional AOT units. Price has not been determined, but <REDACTED> is aware of prices previously established in QS Energy’s TransCanada and Kinder Morgan leases with options to purchase transactions, with purchase prices of approximately $1MM per unit. These leases have been filed in the Company’s Form 8-Ks filed on August 2, 2013 and July 21, 2014. <REDACTED> and QS Energy personnel met the week of January 4, 2015 at Temple University’s laboratory facilities to observe testing protocols and discuss results of laboratory tests performed by Dr. Tao of Temple University on crude oil samples provided by <REDACTED>. Preliminary tests reported by Dr. Tao in his summary report dated December 8, 2015 (“Tao <REDACTED> Report”, attached as Exhibit 7) demonstrated viscosity reductions of up to 46%. A copy of the confidential Tao <REDACTED> Report is attached. Current tests at Temple University are ongoing, and continue to provide encouraging results. <REDACTED>continues to demonstrate interest.





United States Securities and Exchange Commission
January 14, 2016
Page 13


FOIA Confidential Treatment Requested Pursuant to Rule 83


<REDACTED>
QS Energy is working with an affiliate, Energy Tech Africa (“ETA”) to market AOT equipment to <REDACTED>. In February through early April 2015, Dr. Tao of Temple University conducted laboratory tests on crude oil samples provided by <REDACTED>. These tests demonstrated AOT viscosity reductions of 20%-35%. In his final report dated April 9, 2015 (“Tao <REDACTED> Report”, attached as Exhibit 8) Dr. Tao concluded, “The test results clearly show that the viscosity reduction technology, AOT, can significantly reduce the viscosity of the crude oil from <REDACTED>.” (Tao <REDACTED> report, page 7). Based on test results reported in the Tao <REDACTED> Report, QS Energy submitted a case study to <REDACTED>, and is currently working with ETA to formalize a purchase agreement proposal.

Key players have expressed interest in our AOT technology, as indicated by their willingness to provide crude oil samples to Temple University at their cost for testing. Each of these confidential tests has yielded positive laboratory results, and each of these players continue to express current interest, subject to final proof of efficacy of this technology. Evidence of these business relationships is provided in the confidential “Final Report (March 2013-April 2015)” prepared by Dr. Tao of Temple University, dated April 15, 2015 (“Tao Final Report”, attached as Exhibit 6). This report summarizes test results on oil samples provided by each company that has expressed strong enough interest in our technology to i) enter into a non-disclosure agreement; and ii) provide samples of their crude oil, at their expense. A brief summary identifying of each of companies and related laboratory results was provided in the Tao Final Report, summarized as follows.

<REDACTED>
Dr. Tao Test Analysis: We conducted tests with crude oil sample from <REDACTED> oil company, which was extracted in <REDACTED>. The sample is paraffin based crude oil with pour point around 38.50C. The viscosity is 21.25 cp at 510C. When an electric field of 12KV/cm was applied, the viscosity is down to 9.77 cp, reduced by 54%. In addition, the pour point is also down to 36.50C, reduced by 20C. The viscosity reduction lasts more than 20 hours.

<REDACTED>
Dr. Tao Test Analysis: We tested four fuel samples from <REDACTED>. They are Ultra-Low Sulfur Diesel (ULSD) A, ULSD B, Jet Fuel, and BHP Condensate. These samples from <REDACTED> are refinery fuels, not crude oil. In comparison with crude oil, all these samples have quite low viscosity. On the other hand, our tests clearly show that the AOT technology can significantly reduce the viscosity of ULSD A and BHP condensate. At 220C, application of electric field of 1670V/mm reduces the viscosity of ULSD A sample from 4.62cp to 3.53cp, down 23.6%. Similarly, at 20.40C, application of electric field of 123V/mm brings the viscosity of BHP Condensate from 2.876cp to 2.185cp, down 24%. For ULSD B and jet fuel, the viscosity reduction is moderate. At 220C, application of electric field of 2500V/mm reduces the viscosity of ULSD B from 3.39cp to 3.22 cp, down 5%. At 200C, application of electric field of 1830V/mm reduces the viscosity of Jet fuel from 1.9cp to 1.8cp, down 5%.





United States Securities and Exchange Commission
January 14, 2016
Page 14


FOIA Confidential Treatment Requested Pursuant to Rule 83


<REDACTED>
Dr. Tao Test Analysis: We tested two oil samples from <REDACTED>, Black wax crude oil and Yellow wax crude oil. The test results clearly show that the AOT technology can significantly reduce the viscosity of both oil samples. The technology is extremely effective for Yellow wax crude oil sample. At 520C, the AOT technology with electric field 360V/mm reduces its viscosity from 15.7 poise to 1.01 poise, down 93.5%. Because the Black wax crude oil sample contains metallic particles, we have to use electrodes, which have a gap with the pipe wall. The existence of metallic particles also limits the applied voltage, but the results are still much better than that of most conventional crude oil samples. At 40.30C, application of electric field 160V/mm reduces the viscosity of Black wax crude oil from 30.5 poise to 7.6 poise, down 75%. If there were no metallic particles inside Black wax crude oil, the viscosity reduction for Black wax crude oil would be as significant as that for Yellow wax crude oil.

<REDACTED>
Dr. Tao Test Analysis: We did tests with No#2 diesel from <REDACTED>, for a temperature range 00C to 250C. The AOT technology is also able to reduce viscosity of diesel fuel. At 00C, application of electric field of 3760V/mm brings the diesel viscosity from 4.5cp to 4.24cp, down 5.8%.

<REDACTED>
Dr. Tao Test Analysis: We conducted additional tests with different refinery fuel samples from <REDACTED>. These samples are refinery fuels, not crude oil. In comparison with crude oil, all these samples have quite low viscosity. On the other hand, our tests show that the AOT technology can reduce the viscosity of these diesel fuels moderately, about 4-5%.

<REDACTED>
Dr. Tao Test Analysis: We conducted tests with crude oil sample from <REDACTED>. The tests clearly show that the AOT technology can significantly reduce the viscosity of the crude oil from <REDACTED>. At 710C, application of electric field of 1400V/mm brings the oil viscosity from 120.1cp to 71.2cp, down 40.7%.

<REDACTED>
Dr. Tao Test Analysis: We conducted lab tests with SHG condensate from <REDACTED>. While the condensate sample from <REDACTED> is different from conventional crude oils, the viscosity reduction technology, AOT, can significantly reduce its viscosity. Many suspended particles inside the condensate oil sample have micrometer size. Therefore, the electrorheological effect is quite strong and a moderate electric field is sufficient to reduce its viscosity effectively. For example, at 200C, a moderate electric field of 116.1V/mm can reduce the sample viscosity from 4.65cp to 3.93cp, down 15%.

<REDACTED>
Dr. Tao Test Analysis: We were asked to conduct research about the conductivity of Black wax crude oil sample from <REDACTED>, especially explore the relationship between conductivity and temperature. We have found that the conductivity of black wax crude oil is mainly due to the metallic particles inside. Normally, metals have their conductivity decreasing with temperature up. For fluids, the situation is opposite: the conductivity of most fluids goes up with the temperature increasing. This is due to the following fact: the ions inside the fluid are the main charge carriers for most fluids. Then as the temperature goes up, the fluid viscosity goes down and the ions are more mobile, making the conductivity up.

<REDACTED>
Dr. Tao Test Analysis: We conducted lab tests with Sour Crude oil sample from <REDACTED>. The test results show that the AOT technology can significantly reduce the viscosity of the Sour crude oil. For example, at 61.3oC, application of a moderate electric field of 60V/mm reduces the sample viscosity from 2553.16cp to 1544.21 cp, down 39.5%.





United States Securities and Exchange Commission
January 14, 2016
Page 15


FOIA Confidential Treatment Requested Pursuant to Rule 83


<REDACTED>
Dr. Tao Test Analysis: We conducted lab tests with crude oil sample from <REDACTED>. The test results show that the AOT technology can significantly reduce the viscosity of the crude oil sample. For example, at 38.1oC, application of electric field of 1011V/mm reduces the oil viscosity from 50.5cp to 39.46cp, down 21.86%. On the other hand, we also found that the electric current is relatively higher because of the high volume fraction of water and remaining of DRA polymers. We also conducted some tests to see how to reduce the electric current.

In addition, Gregg Bigger, QS Energy CEO, is currently in discussions regarding the Company’s AOT technologies with representatives of top-tier oil and gas companies, including, <REDACTED>, <REDACTED>, <REDACTED>, <REDACTED>, <REDACTED>, <REDACTED>, <REDACTED>, and <REDACTED>.

COMMENT 5. At page 11, you suggest that producers “would also benefit from their midstream transporters implementing our AOT 2.0 transmission-line series by its ability to increase the overall flow capacity….” Clarify for the reader your reference to your “AOT 2.0 transmission-line series.”

RESPONSE 5
The “AOT 2.0” nomenclature is a holdover from when the first commercial-sized midstream unit was manufactured, and announced in a Company press release on August 9, 2012, referring to the “second generation AOT”, and “The commercial design, known as AOT™ 2.0”. A copy of this press release can be found online at: http://www.qsenergy.com/news/detail/1593/stwa-begins-commercial-manufacturing-of-aot-2-0

The AOT 2.0 and AOT Midstream nomenclatures were defined in the Company’s 2012 Form 10-K filed on March 22, 2013 (“2012-10K”) in the following statement:
“In September, 2012 the Company began production of its first AOT Midstream commercial design (‘AOT 2.0’, ‘AOT Midstream’) with its supply chain based in Casper, Wyoming.” (2012-10K, page 5)

“Transmission line” is common nomenclature in the oil and gas industry to denote a network of pipelines for the transportation of oil and natural gas.

We currently favor the “AOT Midstream” nomenclature over “AOT 2.0” as it better represents both our technology and our target market.

COMMENT 6. We note your statement at page 14 that “our technology is commercially unproven and the use of our technology by others is limited.” Explain the reference to this “limited” usage.

RESPONSE 6
The referenced section of our Form 10-K is identifying risk factors. The use of our technology to date has been limited only to joint development, research, and testing applications, including:
1. Temple University (testing, research and joint development);
2. U.S. Department of Energy Rocky Mountain Oilfield Testing Center (testing, research);
3. PetroChina Pipeline R&D Center (testing);
4. TransCanada (testing, joint development, possible conversion to commercial use);
5. Kinder Morgan Crude and Condensate (testing, joint development, possible conversion to commercial use);
6. Newfield Exploration Company (testing, joint development);





United States Securities and Exchange Commission
January 14, 2016
Page 16


FOIA Confidential Treatment Requested Pursuant to Rule 83


Management’s Discussion and Analysis, page 22

Liquidity and Capital Resources, page 24

COMMENT 7. Please quantify the amount of additional funds that you will need to operate your business and, to the extent, indicate the approximate amounts that you will need:
· pursuant to your agreements with Temple University;
· to fund product development and commercialization;
· to manufacture and ship your products; and
· to fund the other items listed under “Summary.”

Similarly, please ensure that your discussion of issuances of unregistered securities at page 21 provides for each applicable issuance all information that Item 701 of Regulation S-K requires. In that regard, we note that you have not provided the date of sale of your unregistered securities, the name of the persons or class of persons to whom you issued the securities, or the facts you relied upon to make the “Section 4(2) and/or Regulation S” exemption(s) available. Also, provide enhanced disclosure regarding the issuance of convertible notes that you reference at page 24. We note the discussion in the notes to your unaudited June 30, 2015 financial statements relating to non-interest bearing convertible notes that you issued in spring 2015. We are unable to locate the documents underlying that issuance listed in the exhibit list of any of your filings. See Item 2.03 of Form 8-K.

RESPONSE 7
The amount of additional funds required is dependent upon levels of success and timing of our commercialization efforts.

As noted in the contractual obligations section of page 24 of the referenced 2014 Form 10-K, the Temple University license agreements require the payment of minimum license fees of $187,500 annually. Obligations under the Temple University research agreement end in 2015; total outstanding expense as of December 31, 2014 was $64,648.

Funds required for product development and commercialization are relatively low due to the fact that we have 5 full-scale commercial AOT units in inventory (one currently deployed at Kinder Morgan). These units are not included in assets on our balance sheet under GAAP. In accordance with GAAP, they were expensed as a research and development expense. Details regarding current estimates for product development and commercialization, manufacture and shipping of our products, and other budget expenses including those generally under “other items” are stated in our previously filed Form 10-K, for the period ended December 31, 2014, and subsequent Form 10-Q filings, along with current funding and operations plans, are detailed in our business plan reported in Form 8-K filed on December 1, 2015.

The Company’s Form 10-Q for the nine-month period ended September 30, 2015, filed November 9, 2015 (“2015Q3-10Q”) provided convertible note details, as follows:
“In the second quarter of 2015, the Company issued convertible notes in the aggregate of $550,000 for cash consideration of $475,500, net of original issue discount of $50,000 and commission paid of $24,500. The notes do not bear any interest; however, the Company used an implied interest rate of 10%. The notes are unsecured, mature one year after issuance, and are convertible into 1,833,333 shares of common stock at a conversion price of $0.30 per share. The Company determined that the notes contained a beneficial conversion feature of $352,139 since the market price of the Company’s common stock was higher than the effective conversion price of the notes when issued.
“Investors in the convertible notes received, for no additional consideration, warrants to purchase a total of 916,667 shares of common stock. Each warrant is exercisable on a cash basis only at an exercise price of $0.30 per share, are exercisable immediately upon issuance, and expires one year from the date of issuance. The relative fair value of the warrants issued with the convertible notes was determined to be $118,806 computed using the Black-Scholes Option Pricing model.
“The fair value of the warrants, the beneficial conversion feature, the original issue discount and commission paid, aggregated $545,445 and is considered a debt discount. In June 2015, the full balance of these notes in the amount of $550,000 was converted to 1 ,833,333 shares of common stock and the full aggregated debt discount amortized as interest expense. During the three and nine month periods ending September 30, 2015, the total note discount amortized as interest expense was $0 and $545,455, respectively. As of September 30, 2015 there was no remaining balance due on these notes.” (2015Q3-10Q, page 10-11)





United States Securities and Exchange Commission
January 14, 2016
Page 17


FOIA Confidential Treatment Requested Pursuant to Rule 83


The Company’s Form 10-K for the year ended December 31, 2015 will contain similar disclosures for all notes funded during calendar-year 2015.

The documents underlying the issuance of the convertible notes in 2015 will be filed in the Company’s Form 10-K for the period ended December 31, 2015, to be filed on or before March 15, 2016. Please advise if this is acceptable.

COMMENT 8. Please file or incorporate by reference all material agreements that Item 601(b)(10) of Regulation S-K requires you to file, including without limitation the following:
· The research agreement with Temple University and any amendments thereto, which you reference in Note 6 to your financial statements at page F-15; and
· All equity compensation plans, including the plan(s) pursuant to which you provide your board committee members with a monthly fee and pursuant to which you have issued options, warrants, and rights to purchase 16,760,000 shares of common stock at $0.26 per share, as you indicate in the second row of your equity compensation plan table (see the related disclosure at pages 44 and 45).

RESPONSE 8
The Company intends to make this filing in its Form 10-K for the period ended December 31, 2015, to be filed on or before March 15, 2016. Please advise if this is acceptable.

The Company confirms the following:

A. The Company is responsible for the adequacy and accuracy of the disclosures in the filing.

B. Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing.

C. The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please contact me if you have any questions or further comments in this matter.

Very truly yours,
Gartenberg Gelfand Hayton LLP

By: /s/ Edward S. Gelfand
Edward S. Gelfand, as counsel to the Company


The foregoing statements and contents of this letter are hereby true and accurate and confirmed and adopted by the Company.

QS Energy, Inc.

BY: /s/ Gregg Bigger
Gregg Bigger, CEO

"

"
Does anyone want to make any bets as to who prompted the inquiry in the first place?
"

If the insinuation is that I filed this or any other complaint with the SEC then it's completely false. I would neve file a complaint against a company which I do not own but I can assure you that there are plenty of shareholders that are fed up with the lies...so I doubt you have to look very far for a dissenting opinion caused by the travesty this management team perpetuates.

"
QS Energy has been given the green light to move full steam ahead by the sec. All questions have been successfully answered as per the EVIDENCE below. IT'S NOW CONFIRMED that KINDER MORGAN want the PROVEN AOT as per the RECENT PR below
"
Nope sorry your interpretation is not correct. The company and its agents are on notice from the SEC that they must remove any claims of proven efficacy and market adoption in its filings. So Qsep management must now toss its most successful IR strategy of having investors "read between the lines" otherwise they might trade in their Teslas for stripe suits!

Not according to the SEC:

Dear Mr. Bigger:

We have completed our review of your filings. We remind you that our comments or changes to disclosure in response to our comments do not foreclose the Commission from taking any action with respect to the company or the filings and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings to be certain that the filings include the information the Securities Exchange Act of 1934 and all applicable rules require.

"
All questions have been successfully answered by QS Energy. The PROVEN AOT is now cleared for take off. GREAT PR issued RECENTLY as per the EVIDENCE below : "

Not according to company attorneys.

"We believe the DOE test reports from the RMOTC show AOT increases the energy efficiency of oil pipeline pump stations, and that each subsequent test performed supports this conclusion. However, we are very clear in the Form 10-K and Form 10-Q submissions to point out that the efficacy of the equipment has yet to be proven, and that the benefits provided by AOT may not be sufficient to attract customers, stating on page 16 of our 2015 Form 10-K, “The commercial viability of QS Energy’s technologies remains largely unproven and we may not be able to attract customers.”

Sec last response:


https://www.sec.gov/Archives/edgar/data/1103795/000000000016082606/0000000000-16-082606-index.htm

Dear Mr. Bigger:

We have completed our review of your filings. We remind you that our comments or changes to disclosure in response to our comments do not foreclose the Commission from taking any action with respect to the company or the filings and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings to be certain that the filings include the information the Securities Exchange Act of 1934 and all applicable rules require.

Ask and you shall receive!

CORRESP 1 filename1.htm



Please reply to:
Direct Tel: 213-542-2121
egelfand@gghslaw.com

June 7, 2016


VIA EDGAR AND FEDEX

United States Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 4628
100 F. Street, N.E.
Washington, D.C. 20549-4561
ATTN: Parhaum J. Hamidi, Attorney-Advisor

RE:
QS Energy, Inc.
Form 10-K for Fiscal Year Ended December 31, 2014
Response Dated March 15, 2016
Form 10-K for Fiscal Year Ended December 31, 2015
Filed March 15, 2016
Form 10-Q for Fiscal Quarter Ended March 31, 2016
Filed May 10, 2016
File No. 0-29185

Dear Mr. Hamidi:

We are submitting this letter on behalf of our client, QS Energy, Inc. (“Company”), in response to the staff’s comment letter of May 27, 2016, concerning the above-referenced filings and the Company’s response letter of March 15, 2016. The staff’s comments and the Company’s responses are as follows:

Staff Comment No. 1:

Form 10-Q for Fiscal Quarter Ended March 31, 2016

1. As applicable, please also give effect to the following comments in your Form 10-Q for the fiscal quarter ended March 31, 2016.

Company Response to Comment No. 1: The Company undertakes to do so.



United States Securities and Exchange Commission
Division of Corporation Finance
June 7, 2016
Page 2

Staff Comment No. 2:

Form 10-K for Fiscal Year Ended December 31, 2015
2. We note your response to our prior comment 1 and reissue the comment in part. It is unclear from your disclosure which patents that you own are related to your active business. Please expand your disclosure at page 11 to quantify the number of patents which no longer form an active part of your business, and describe any risks to your business that result from any gaps that exist in full patent protection.

Company Response to Comment No. 2: At page 11 of our 2015 Form 10-K, we identify which patents are no longer part of our active business, stating, “Active development of QS Energy’s fuel injector technology was suspended in 2013, ….” The table which follows that statement identifies 21 patents (13 granted, 8 pending) which are directly related to the fuel injector technology. The following excerpt is from page 11 of our 2015 Form 10-K (emphasis added):



The statement above directs the reader to ITEM 1A, Risk Factors of the Form 10-K for discussion regarding risk factors associated with these patents, where risks related to gaps that may exist in full patent protection are discussed, including the following excerpt from page 18:



At page 7 of our Form 10-Q for the period ended March 31, 2016, we summarize patents as “47 domestic and international patents and patents pending”, but did not provide any further detail. In the following paragraph, readers are advised to read the Form 10-Q in conjunction with our 2015 Form 10-K. In our next Form 10-Q filing (period ending June 30, 2016), we will provide clarification regarding the patents related to active and inactive business activities and specifically direct the reader to the 2015 Form 10-K for patent details. The Form 10-Q specifically directs the reader to ITEM 1A, Risk Factors of the 2015 Form 10-K, where patent risk factors are discussed as detailed above.

We believe the above discussion clarifies and adequately addresses the staff’s comment no. 2. Please advise.



United States Securities and Exchange Commission
Division of Corporation Finance
June 7, 2016
Page 3

Staff Comment No. 3:

3. We reissue our prior comment 2 in part. You continue to suggest that your AOT technology has been “proven” to “increase the energy efficiency of oil pipeline pump stations.” Based on the information you provided on a supplemental basis and the related disclosures, and for the reasons cited in prior comment 2, please revise your disclosure to remove the claim that the technology has been “proven.”

Company Response to Comment No. 3: The full statement referenced in the staff’s comment no. 3, above, is that the “AOT™ has been proven in U.S. Department of Energy tests to increase the energy efficiency of oil pipeline pump stations.” (2015 Form 10-K at pages 3 and F-7). Details of U.S. Department of Energy testing are summarized at page 13 of the 2015 Form 10-K as follows (emphasis added):



This statement provides a link to the full DOE report, specifically drawing attention to Fig. 1, page 4 of the report as follows:




United States Securities and Exchange Commission
Division of Corporation Finance
June 7, 2016
Page 4

In pipeline operations, reductions in viscosity and pipeline pressure loss directly result in increased pump station efficiency. As noted in the conclusion of the DOE report, “Pipeline line-loss and pump motor power consumption were reduced for a given flow rate during the observed test.” A full copy of the DOE report can be found online at: https://qsenergy.app.box.com/doe-stwa-rmotc-report.

The Form 10-K also provides summary information on an overnight test run at the DOE facility, which reached the same conclusion. A link to this report, as provided in the Form 10-K is:
https://qsenergy.box.com/DOE-STWA-RMOTC-Overnight.

Although the statement in the 2015 Form 10-K is specifically limited to results proven at the DOE test facility, each subsequent test has yielded similar results further demonstrating that the AOT does improve pump station efficiency. As detailed in the 2015 Form 10-K at page 13:

· In its report dated June 26, 2012 (“PetroChina Report”), PetroChina concluded, “The above series of tests show that it is very effective to use AOT to reduce the viscosity of crude oil. We can see that AOT has significantly reduced the viscosity of Daqing crude oil, Changqing crude oil, and Venezuela crude oil, and greatly improved its flow rate.” (PetroChina Report, page 15). A copy of the PetroChina Report is available online at:
https://qsenergy.box.com/PetroChina-STWA-Report
· In its summary report dated February 5, 2015, ATS concluded that i) data indicated a decrease in viscosity of crude oil flowing through the TransCanada pipeline due to AOT treatment of the crude oil; … A copy of the ATS summary report dated February 5, 2015 is available on the Company website at: https://qsenergy.box.com/ATS-AOTSummaryRpt
A copy of the ATS field test report dated October 6, 2014, with certain confidential information redacted, is available on the Company website at:
https://qsenergy.box.com/ATS-AOT-Detailed-Report
Despite early difficulties experienced with the AOT operating on Kinder Morgan’s condensate pipeline, current testing performed subsequent to the Company’s 2015 Form 10-K filing have resulted in sustained overnight operations and testing. Viscosity measurements collected in the field by QS Energy personnel indicated viscosity reductions consistent with expectations based on laboratory tests performed at Temple University. Pipeline operations data collected by Kinder Morgan personnel showed viscosity reduction and pipeline pressure drop consistent with both laboratory results and in-field measurements collected by QS Energy personnel. These results were summarized in the March 31, 2016 Form 10-Q at page 13 as follows (emphasis added):



We believe the DOE test reports from the RMOTC show AOT increases the energy efficiency of oil pipeline pump stations, and that each subsequent test performed supports this conclusion. However, we are very clear in the Form 10-K and Form 10-Q submissions to point out that the efficacy of the equipment has yet to be proven, and that the benefits provided by AOT may not be sufficient to attract customers, stating on page 16 of our 2015 Form 10-K, “The commercial viability of QS Energy’s technologies remains largely unproven and we may not be able to attract customers.”

To address the staff’s concerns, we will revise our future filings to state that the AOT technology “demonstrates” or “shows” an increase in the energy efficiency of oil pipeline pump stations, rather than stating that the AOT technology “has been proven” to do so. We believe that the use of the word “demonstrates” or “shows” reasonably addresses the staff’s comments in light, and in the context, of the other disclosures discussed above. Please advise.



United States Securities and Exchange Commission
Division of Corporation Finance
June 7, 2016
Page 5

Staff Comment No. 4:

4. Similarly, please revise to eliminate the suggestion at page 6 that you have “proven” your “ability to build, deliver and operate [your] AOT equipment on a high-volume commercial pipeline” in light of the details you supplied regarding the problems your equipment has encountered and the lack of any substantial commercial usage. As you state at page 10, you “have not proven the commercial viability of this product.”

Company Response to Comment No. 4: The Company did in fact build, deliver and operate its AOT equipment on TransCanada’s Keystone pipeline; and despite significant unexpected challenges working with electrically conductive crude oil condensate, the Company adapted its technology and is now operating on Kinder Morgan’s crude oil condensate pipeline. In addition, we believe it is important to read this statement in context, presented within the “Business Strategy” section of our 2015 Form 10-K as follows (page 6):


The step of operating on the Keystone pipeline was a major milestone for the Company. Strategically, this was a critical moment, and despite the fact we are no longer installed on the Keystone pipeline, this single milestone event opened the door for us at Kinder Morgan and potential other major pipeline operators. All equipment installed on the Keystone pipeline was highly controlled and regulated. All final design specifications, quality controls and inspections were reviewed and approved by TransCanada with great detail and precision. The equipment built and delivered was massive in scale and presented significant logistic challenges. Our equipment operated successfully under normal Keystone Pipeline operating conditions, operations which were observed and reported by ATS Rheosystems, an independent laboratory. The statement in question is preceded on page 5 by a detailed description of our experience and challenges at TransCanada and Kinder Morgan, which states the efficacy of the equipment has not been proven, as in the following statement:

“While more testing is required to establish the efficacy of our AOT technology, we are encouraged by the findings of these field tests performed under commercial operating conditions. We look forward to further development and commercialization of our technology.” (2015 Form 10-K, page 5)

As stated on page 10, we “have not proven the commercial viability of this product.” To get there, we need to have final proof of efficacy, demonstrate financial benefit to the oil pipeline operators, and address other risk factors related to market adoption as detailed on page 16. However, based on our experience with Kinder Morgan and other potential customers, pipeline operators appear to be comfortable with our ability to build, deliver and operate our AOT equipment.

We believe the use of the word “proven,” in the context of the disclosures and discussion above, does not suggest that the AOT technology is, at this time, commercially viable. Nonetheless, to address the staff’s concerns, we will revise future filings by removing the word “proven” and replacing it with the word “demonstrates” or “shows.” Please advise.



United States Securities and Exchange Commission
Division of Corporation Finance
June 7, 2016
Page 6


The Company acknowledges and confirms the following:

A. The Company is responsible for the adequacy and accuracy of the disclosures in the filing;

B. Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and,

C. The Company may not assert comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please contact me if you have any questions or further comments in this matter.

Very truly yours,

Gartenberg Gelfand Hayton LLP


By: /s/ Edward S. Gelfand
Edward S. Gelfand,
as counsel to the Company

The statements and content contained in this letter are true and accurate and adopted by the Company.

QS Energy, Inc.

By: /s/Gregg Bigger
Gregg Bigger, CEO

Not according to the SEC which has warned management from claiming its technology is "proven". Company lawyers responded and agreed they would not use that term in future documents.

https://www.sec.gov/Archives/edgar/data/1103795/000000000016078381/0000000000-16-078381-index.htm

Mail Stop 4628
May 27, 2016
Greggory Bigger
Chief Executive Officer
QS Energy, Inc.
735 State Street, Suite 500
Santa Barbara, CA 93101
Re: QS Energy, Inc.
Form 10-K for Fiscal Year Ended December 31, 2014
Response Dated March 11, 2016
Form 10-K for Fiscal Year Ended December 31, 2015
Filed March 15, 2016
Form 10-Q for Fiscal Quarter Ended March 31, 2016
Filed May 10, 2016
File No. 0-29185

Dear Mr. Bigger:
We have reviewed your March 15, 2016 response to our comment letter and have the following comments. We have limited our review of your most recent Form 10-K and most recent Form 10-Q to those issues we have addressed in our comments. In some of our comments, we may ask you to provide us with information so we may better understand your
disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments. Our references to prior comments are to comments in our letter to you dated March 11, 2016.
Form 10-Q for Fiscal Quarter Ended March 31, 2016

1. As applicable, please also give effect to the following comments in your Form 10-Q for
the fiscal quarter ended March 31, 2016.
Form 10-K for Fiscal Year Ended December 31, 2015

2. We note your response to our prior comment 1 and reissue the comment in part. It is
unclear from your disclosure which patents that you own are related to your active
Greggory Bigger
QS Energy, Inc.
May 27, 2016

Page 2
business. Please expand your disclosure at page 11 to quantify the number of patents which no longer form an active part of your business, and describe any risks to your business that result from any gaps that exist in full patent protection.

3. We reissue our prior comment 2 in part. You continue to suggest that your AOT technology has been “proven” to “increase the energy efficiency of oil pipeline pump stations.” Based on the information you provided on a supplemental basis and the related disclosures, and for the reasons cited in prior comment 2, please revise your disclosure to
remove the claim that the technology has been “proven.”

4. Similarly, please revise to eliminate the suggestion at page 6 that you have “proven” your “ability to build, deliver and operate [your] AOT equipment on a high-volume commercial pipeline” in light of the details you supplied regarding the problems your equipment has encountered and the lack of any substantial commercial usage. As you state at page 10, you “have not proven the commercial viability of this product.”

Closing Comments
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
? the company is responsible for the adequacy and accuracy of the disclosure in the filing;
? staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
? the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Greggory Bigger
QS Energy, Inc.
May 27, 2016

Page 3
Please contact Parhaum J. Hamidi, Attorney-Adviser, at (202) 551-3421 or, in his
absence, Timothy S. Levenberg, Special Counsel, at (202) 551-3707 with any questions.
Sincerely,
/s/ Loan Lauren P. Nguyen for
H. Roger Schwall
Assistant Director
Office of Natural Resources

Ongoing evaluation is not adoption nor confirmation. In France they would call this: Le Mumbo Jumbo.

This is a promotional set piece created and paid for by QSEP management using shareholders money to simulate dreamy clouds of fluffery, rather than running a real business. Nothing emanating from this management should be believed until it can verify by seeing cash hit the books. Anything short...aint gonna fly.

"How have they twisted the facts. They are there in public filings and shareholder updates. "

Well they played musical chairs with the product lines for one with no explanation why they chucked 60 million in development. I've shown you with my last post how the company went absolutely dark within a couple of years after they supposedly had both international and domestic interest in its line of car and truck products. They simply did not own up for any of the previous products failures and I seriously doubt management will do so anytime soon.

"
Billion dollar companies have tested and want the aot. I think that ends this argument. Read zerosnoop and zerosum posts for factual information
"
Yeah right....here it's been clearly shown with links how Qsep management has historically twisted the facts, withheld vital information, secretly shifted products and the company mission, yet somehow a one off field test guarantees the technology and the imminent follow up of free flowing purchase orders. Yep...the argument was over before it began.

The demise of all legacy products happened in short 2 year period and no reason was ever given for why it was pulled. The years change but the claims remain the same. Here is the timeline:


From 2010 10K

https://www.sec.gov/Archives/edgar/data/1103795/000101968711001036/stwa_10k-123110.htm

ELEKTRA

As a result of six months of field testing and refining, we are refitting the ELEKTRA with a new power supply and electronics to optimize the exposure of the fuel to the electric field in an attempt to create peak efficiency. Dr. Luke Turgeon and his company has been retained by us to bring simulation and electronic design skills in an attempt to allow us to go from design to a stable cost effective volume production in the fastest time possible.

Management believes that having the SAE (Society of Automotive Engineers) Type II test results verifying that ELEKTRA saves 10% of more on fuel consumption will be the milestone that will allow the Company to begin closing sales of the product. The 10% fuel savings target is for the after-market ELEKTRA product. Management believes that the OEM product, integrated into the manufacturer’s design may be able to yield higher levels of fuel savings due to the fact that the manufacturer will have ELEKTRA communicate the engine’s electronics to optimize the advantageous effect as the fuel flow changes over time.

Upon completion of our tests and the results being published, management will seek contracts within the trucking industry and the selection of a manufacturing company as follows:

ZEFS and MK IV Technologies in MAG ChargR and ECO ChargR (legacy)

The ZEFS and the MK IV technology in the MAG ChargR and ECO ChargR products place a magnetic field in and around the fuel and air that lowers fuel thickness and influences oxygen to improve combustion. MAG ChargR and ECO ChargR contain permanent rare-earth magnets, which produce a very strong magnetic field. This field, when arranged in specific manner of shape and strength, causes a change in the fuel as it passes through the field. As fuel passes through the magnetic field, a change in the fuel occurs facilitating a decline in both viscosity and surface tension. This allows for finer atomization, resulting in a more optimized mixture and therefore more efficient combustion. Depending on the specific application of these products to specific makes and models of vehicles, this improved combustion may offer one or more of the following benefits; (i) lower emissions, (ii) more horsepower and torque and (iii) improved fuel economy.

The paper titled, “Viscosity Reduction in Liquid Suspensions by Electric or Magnetic Fields” published by Dr. Rongjia Tao, Ph.D., of Temple University, shows that applying a magnetic field reduces thickness (viscosity) of oil by 17%. The paper “Magnetic Field Effects on the Combustion Processes in Diffusion Flames” published by LSU in 2005 demonstrates that oxygen is attracted to a magnetic field. The ZEFS and MK IV technologies used in the MAG ChargR and ECO ChargR products use these properties of reduced fuel viscosity and influenced flow of oxygen to improve combustion.

Improved combustion increases engine power and performance. We have introduced the ECO ChargR, which incorporated our MK IV technology, and the MAG ChargR, which incorporates either our ZEFS or MK IV technologies, depending upon the application. We have designed and tested various versions of our MAG ChargR and ECO ChargR products for use on 2- and 4-stroke carbureted and fuel injection gasoline engines.

We differentiate our MAG ChargR and ECO ChargR products based on their differing attributes and marketing focus. ECO ChargR products are primarily designed for devices with engines that fall outside environmental regulation and often do not have emissions control systems. MAG ChargR products are primarily designed for engines already subject to environmental regulation and vehicles that often do already have some emissions control technology.

Additionally, ECO ChargR products are primarily designed to reduce harmful emissions and MAG ChargR products are primarily designed to enhance performance and fuel economy. The ECO ChargR is intended to reduce exhaust emissions in vehicle and small utility motors. ECO ChargR products will be marketed primarily to OEMs as well as to pilot and government-mandated emissions programs. The MAG ChargR is intended to increase power and improve mileage. MAG ChargR products will be marketed primarily to the specialty consumer accessories market for many types of vehicles, including but not limited to cars, trucks, motorcycles, scooters, ATVs, snowmobiles, personal watercraft and small utility motors. Because our MAG ChargR and ECO ChargR products are customized to specific brands, models and engine sizes, these products will require hundreds of individually developed models to accommodate the market.

MAG ChargR and ECO ChargR have been developed for one-, two- and four- barrel carbureted and fuel injection engines. These products are easily fitted to the base plates of carburetors and fuel injection systems; the devices are compact, there are no moving parts. They are also inexpensive to produce, extremely durable and unaffected by poor quality fuel.

We believe that testing by the Company, as well as by independent third-party laboratories, has demonstrated that both MAG ChargR and ECO ChargR generate significant reductions in THC and CO emissions and, in the case of MAG ChargR, also improve fuel efficiency by lowering gas consumption and increase engine performance.


Then From 2011 10K
https://www.sec.gov/Archives/edgar/data/1103795/000101968712001150/stwa_10k-123111.htm
ELEKTRA

Management believes that there is a large and active market for a product such as ELEKTRA that can reduce the fuel consumption of diesel engines. Management believes that there is a viable market opportunity for the Elektra product within the commercial shipping industry, military and other off-highway commercial applications.

Subject to proper capitalization, we intend to embark upon additional research and development to scale up the Elektra product from laboratory research into preliminary prototypes, followed by commercial prototype units to prove our commercial sales viability.

Our research indicates that there are a number of factors that will drive the need for products designed to improve efficiency and reduce emissions from diesel engines such as STWA’s Elektra product. Our research indicates that the California Air Resources Board (CARB) has established regulations that are driving the need for new emissions reduction technologies. CARB has established the following regulations on ship emissions:

“Requires use of cleaner fuels within 24 nautical mile zone of the California coastline

July 1, 2009
– use marine gas oil (averages 0.3% sulfur), or
– use marine diesel oil with a 0.5% sulfur limit

January 1, 2012
– use marine gas oil with a 0.1% sulfur limit, or
– use marine diesel oil with a 0.1% sulfur limit

Applies to main and auxiliary engines, and auxiliary boiler3”

ARB will grant exemptions to vessels that apply for a temporary experimental or research exemption.

“Temporary Experimental or Research Exemption

Provided for research projects that will advance the state of knowledge of exhaust control technology or characterization of emissions

– Allows for the use of noncompliant fuel
– Applicant must provide progress reports and all test data and other project results
– Exemption possible for up to 3 years, with an extension possible
– Application process takes about 30 days”

Cargo ships primarily use a high-sulfur content, undistilled fuel known as Bunker-C or residual oil because it is inexpensive. Low sulfur ship fuels such as Marine Diesel Oil (MDO) can cost up to six times as much as Bunker-C. Additionally, ships have to shut down and clean out their fuel systems when switching from Bunker-C to MDO. This can add an extra day to every inbound ocean voyage, greatly increasing the operating cost for ship fleets. A technology that could deliver emissions reduction with Bunker-C and avoid shipping companies having to switch to MDO could avoid dramatic cost increases in shipping.

In the United States, California, through the California Air Resources Board (“CARB”), continues to set the strictest emission standards for the country and the United States Environmental Protection Agency (“EPA”) has indicated it may adopt more stringent emission standards, which would be applicable throughout the United States. The State of California has also announced its intent to seek greenhouse gas (“GHG”) legislation and the United States Congress is also considering GHG legislation.

Foreign governments have recognized the serious effects caused by air pollution and many nations have enacted legislation to mandate that engine manufacturers be required to reduce exhaust emissions caused by their products. As evidenced by the overwhelming participation in the establishment of the Kyoto Accord, many nations are moving towards tighter GHG emissions control as well. The European Union (“EU”) currently requires all member nations to adopt EURO 3 emissions standards for motorcycles and EURO 4 emissions standards for automobiles and trucks. Some Eastern European countries contemplating EU admission, and certain Asian countries, have also announced gradual phase-in of EURO standards, including China, Indonesia, Vietnam, Thailand and India.


Management believes that US EPA, CARB and international governments will continue to lower emission standards below even these recent levels. Yet, the cost of adding emissions control devices to engines or vehicles has always been a challenge, since manufacturers shift the cost of such devices to the consumer. In developing nations, where incomes are extremely low, economics and the lack of government resources have hampered progress.

Upon completion of our tests and the results being published, management will seek contracts within the maritime and military applications and the selection of a manufacturing company as follows:


From 2012 10K

We have two licenses (the “Licenses”) from Temple University for its patent-pending uniform electric field technology, which provides the intellectual property foundations upon which our products are based. The AOT product is based on a new and novel technology to the oil and gas industry for purposes of crude oil viscosity reduction, making it easier to pump oil through pipelines. The AOT product consists of passing crude oil through an array of dynamically-controlled electrical fields to reduce the viscosity of the oil without changing its temperature or chemical formula. Management believes that this technology holds key advantages supplemental to other viscosity reduction and flow assurance technologies currently in use by the industry.

The ELEKTRA technology consists of passing fuel through a dynamically controlled electrical field to assist in the atomization of fuel via fuel injectors. ELEKTRA introduces a uniform electrical field into the fuel flow to reduce the viscosity of diesel fuel, enabling smaller droplets to be released into the combustion chamber of a diesel engine.




After that, there is no mention of legacy products in 2013. Tao is involved making claims and having the company base its devices on his findings yet those devices are purged shortly thereafter. Tao nor anyone else from the company explained it. Facts have no favorites.

"
These are comments made by whom ? Other qualified professors or bloggers. Where are the credentials of those whom question his work. Are they in the same field and have the right to question ?
"
Exactly no other technical views are available because they simply don't exist. Bernie Madoff's credentials were also impeccable and he was a thief.
So the theory that high qualification somehow make you impervious to error has been disproven time after time!
The old adage: "I hear what they say...I see what they do."
Company's product are based on dubious science which is incentivized by Qsep research grants and licensing deals with Temple.

"
Absolutely

It was puffery at every stage this company has developed in particular over the last few years. Puffery about the validity of the technology

WRONG - it works "

Qsep management is adept at presenting itself as a legitimate
company but their history has proved they are anything but.

No one is immune from criticism in a public company. Tao's reports and estimates are all over the board and there had been no cross checking of results. Simply, if aot did what Tao claims, then it would be confirmed within months of being tested in a lab or small field test and the company would producing units and building up a legitimate revenue source.

"
Disagree. What do you call having the company's product integrated and automated on a major oil pipeline company's pipeline"

Simple it's called salesman puffery! Only contracts matter now. If the original desk is dead do be it but not reporting it is a major red flag. My bet more of the same this Q.

"This is a complicated technology, and Kinder needs to know exactly how AOT will operate on these new oil types while switching between them and condensate which is a very different product. They also need to write up the manual and other things. I do not believe they are "milking time." KM could also be testing the unit for durability during this time. You do not understand the business.
"
Unfortunately business does not operate in that manner and no company like Qsep can continue to botch test after test without consequences. Testing for durability is not in the original contract. Only a safety review..in fact It's clear that Aot does not have to even work to obligate KMI to pay the minimum term. It just has to not pose a safety hazard. So...based on that you have to assume that:

1. Aot still posses a safety concern
Or
2. KMI has decided not to honor the contract or has modified the terms and conditions of the original agreement.

All of which would require an 8k but alas here we sit with not an official peep!

The process control integration promotion is just complete nonsense. This is an excuse used to milk the time between Q's so they don't have to report bad news and tank the stock. I would not be surprise if they stick to the "working to finalize" in the upcoming q as its unaudited and it's not like these guys have not fluffed the SEC docs beyond reason.

Save your dough...even if you could nail down the location (look up eagle ford Kinder Morgan on google earth) the likelihood it was caught on google earth is pretty slim. It's also 1/4 the size of the TCP rig so seeing it from space would be difficult to begin with. Wait for the 10q in 3 weeks or less to hear the latest excuse.

"
I would say that will not be happening. The KM successful test meant contracts would be the focus for Bigger. "

Lol... another dart board strategy by the crack team!

"
Spot on, I have always considered it was a private company that has prematurely gone public. There is a lot going behind the scenes, and I mean it positively."

Private company don't squander raised money on overhead, payroll, and penny stock promoters.
They don't give every executive which steps in to run the company a golden parachute with no regard for that executives performance. The company still is paying for executives that have left long ago BOD fees that were previously paid in cash.

The only thing going on behind the scenes is the CEO and his fluffer cooking up excuses why KMI is not generating income.

Let me guess: It work so well KMI didn't understand what was going on! Lol!!

"Now imagine what the PROVEN AOT will do on CRUDE OIL ? Oh boy, bring it on QS Energy. "


Qsep management biggest assets is feeding off of shareholders imagination, because none of the promises or products made by the company, have ever reached a minimum level of success. So pundits can call it buried treasure but logic always brings the story back to point A. When will this be a real business? Until the question can be answered with sales it will assumed that they will never be able monetize dollar one....no matter how much cubic zirconia are claimed to be found buried these concocted releases.