Replies to post #11027 on QS Energy Inc (QSEP)

[alkalinesolution1]

The 8k appears to be just for that one skid. I imagine that TC would need to renegotiate another lease or purchase for other skids. Otherwise surely they would specify it in the contract.

[As I See It]

I interpret the 8K from Aug 2nd 2013 as meaning only the purchase of the one unit at $4,300,000.

The Lessor hereby leases, non-exclusively, to TransCanada and TransCanada leases from the Lessor the equipment, along with the equipment attached thereto or contained therein as described in Schedule A attached to this Lease and made a part hereof (the "Equipment"),

Provided TransCanada is not in default with respect to any obligations or payments required to be made under this Lease, the Lessor grants to TransCanada, during the Initial Term and Extended Term, if any, hereof, an option to purchase the Lessor's interest in the Equipment for the amounts set forth in the attached Schedule B

Schedule A describes the "Equipment" as:

The Equipment is generally described as follows:



· AOTTM Midstream, skid mounted ; Quantity = 4



· Header assembly; Multiple 30" 600 series steel spool pieces reducing to 20" 600 series nozzles; Quantity = 2 (intake and outtake)



· AOTTM Power Supplies (1 per AOTTM); LH series 5 kW regulated high-voltage DC power supply; Quantity = 4



· Data acquisition and control (SCADA/PLC); specifications TBD; Quantity = 1



· Power supply and SCADA housing; Class 1

Ah, I see Alk beat me to the answer.

[deesil]

Sec. 12.1 of the lease sets out the option to purchase as valid within either the Initial or Extended Term. Price specified in Schedule B of the lease agreement.

Sec. 12.2 interestingly sets 60 days after notice is given as the "closing date" of the purchase. If notice of intent to exercise the option is given and less than 60 days remain in the Initial or Extended Term, then closing is the day the lease ends.

Assuming the value is adding up for TC like I pointed out in post #11013, that means:
best case = we are within 60 days of TC's placing an order (STWA is likely very interested in inking a deal this calendar year);
worst case = TC and STWA reopen and/or continue the negotiations on price (ditto footnote mentioned above).

Gregg said at the SHM there are approximately 12 spots on the line that are identified currently as choke points.

Why would TC drag this out too long? 1) they're not realizing the savings and efficiencies AOT has to offer 2) they run the risk of not being first in line to take delivery and use the equipment and 3) they may lose the opportunity to own the powerful PR story of their adopting a breakthrough, new green, efficient, and safe pipeline technology.

Very exciting end of year coming!