Replies to post #10287 on QS Energy Inc (QSEP)

[Myrka]

Moorea9, very interesting, I would like to bring to your attention a post by Zizek (#9731) on 22 July

Argument #1: Cancellation of the purchase agreement
For those who are long and maybe didn’t read the initial agreement closely, cancelling the lease nulls the agreement entirely. There was no separate document you missed. However, this need not be a negative indicator.

The KM agreement gives us an important second data point. STWA believes one AOT Midstream skid is worth $1.2M. TC had the option to purchase four skids at a cost of $4.3M. Feel free to do the math. You’ll find that if TC is interested in deploying AOT across their pipeline, then the final price tag for the rollout would be lower than the cost of buying this one installation at $4.3M (turns out, economy of scale is a thing). It is not as though TC is taking axes to AOT tomorrow morning, but instead that it will continue expediting its testing for the next 90 days. It seems downright rational for TC to say “okay, this thing works, we want to end the test early but the contract requires 90 days of notice.” This gives TC/STWA three months to get a framework in place that accurately reflects the value of AOT on their pipeline given whatever benefits might have been seen. And that cost will almost certainly be below the original cost of $4.3M, so TC being a rational company, terminated the agreement.