QS Energy Inc (QSEP)

[As I See It]

In my opinion, the reason we have never seen lease payments from KM to QSEP is because the original Agreement back in July of 2014 was probably modified by mutual consent. The moment QSEP's equipment failed to meet the initial pre-start testing requirements within the agreed upon framework, Kinder Morgan could have voided The Agreement and walked away. Yet, Kinder Morgan and QSEP worked together over the course of the next couple of years to get the AOT to work.

Under those circumstances, The Agreement, as written, bore little semblance to the new conditions on the ground. My logic tells me that The Agreement was modified to take the new developments under consideration. How was it modified? Could QSEP have agreed to waive the leasing fee in deference to Kinder for continuing to work patiently with them? Even a 24 hour test with measurable results should have initiated a lease payment under the terms of an unmodified Agreement, but it didn't. Why not? Was it because it was modified? None of us knows for sure.

We can all look at the same evidence and come away with different interpretations. The use of the words "undisputed facts" should be used very carefully.


P.S. The terms of The Agreement state that the initial lease term will begin

"commencing on the date when a successful completion of the Equipment's direct current power supply is successfully energized by Lessor"

We know at least 24 hours of measured testing took place. Obviously the direct current power supply must have been energized.