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Replies to post #52376 on QS Energy Inc (QSEP)
During the period August 2020, through June 2021 (the “Relevant Period”), Mr. Kyte provided the Company with $275,000 in working capital. During this Relevant Period, Mr. Kyte also introduced capital to the Company in the sum of $150,000 from third-party sources. This capital was received by the Company in exchange for convertible promissory notes and related warrants. With this additional third-party capital infusion, during this Relevant Period, Mr. Kyte was responsible, directly and indirectly, for providing the Company with working capital in the amount of $425,000.
The Board also approved a resolution suspending all Board compensation effective January 1, 2021, payable under the Company’s May 6, 2014, Board compensation policy as amended January 1, 2015.
Dr. Gallagher noted, "Having worked closely with pipeline operators, I recognize the unmet market need for QS Energy's patented Applied Oil Technology (AOT). In my experience working with teams of scientists and engineers to find cost effective ways to reduce crude oil viscosity and increase pipeline efficiency, I have not come across a technology that could replace traditional diluents and additives. The AOT has the potential to reduce or eliminate dependence on chemical additives with an elegant electromechanical system. The value proposition from both a logistics and economic standpoint for the customers is compelling. I look forward to helping advance the technology through full commercialization and anticipate rapid market uptake."
One of the key parameters for successful deployment is the resistivity of the oil. It governs the current draw for a given field strength and ultimately drives the plate spacing of the grid pack. Based on our laboratory data set we have optimized the grid spacing to increase the residence time compared to the last grid pack. Our field strength remains well above the tested minimum, but the additional space will allow for some additional room to implement other design improvements based on recent testing of the full size AOT.
From Gallagher :
“Our resolution of the final 20% of design criteria allows us to proceed with finalizing drawings and ordering full sized prototype parts. From there we will rebuild the AOT internals and the blind in preparation of a hydrostatic test.”
From Kyte :
“We are so pleased that the team is working well together, and I am proud of what we have accomplished. A hydrostatic full sized AOT test with a development partner’s oil is our next big milestone. I am confident that will be right around the
corner.”
Neither our vendors nor the manufacturers of the resins had crude oil immersion test data, therefore could not suggest alternatives for consideration. The manufacturer believed the material in the original build should have given the best performance. Since no immersion test data was available, we conducted immersion testing of our own to collect baseline data. We tested crude oil, an aliphatic fraction, and an aromatic fraction. We found the aromatic fraction of the oil is the fraction likely causing the swelling.
The crude oil showed a 10% change in mass and volume in about 30 days and would likely to have continued to slowly increase.
The aromatics showed over an 80% change in one day and plateaued at about 100% change in about a week. Based on this observation we were able to create an accelerated testing protocol. This new testing protocol was effective. Exposure testing is a function of time, and data is still being collected. However, we are confident we have identified three possible alternative materials that show 90% to 98% improvement based on retail samples of the material. Of the three, we have selected a final material for application in hydrostatic testing.
We will also change the mechanical and electrical connection designs contained in the insulating material to make it less susceptible to being affected should any movement occur with a new material.
We have shared our component testing data, AOT testing data, and lab data with our engineering firm. We have also provided them with our design criteria for review and comment. We completed the conceptual design review of the shared information and have received key component drawings. We are currently working on refining details and final assembly drawings. The new design will be less susceptible to failure resulting in changes in volume of the grid pack insulators so if swelling does occur it will be less likely to contribute to the problems we have encountered to date.
We continue to have discussions with our original development partner. We have shared our conceptual designs with them and will meet with them once again when we have a final design to share. Our developing plan will conclude in the next few weeks with manufacturing of prototype parts, fit testing, and electrical testing culminating in a final hydrostatic test in May.
Based on our preliminary meeting with our original development partner in February, we will be provided oil for component testing as well as a full sized AOT field test.
The design considerations based on the last year’s results are as follows :
1. Round the edges of all metal surfaces.
2. Eliminate perpendicular surface of insulators.
3. Ensure the gaps between adjacent grid plates are uniform.
4. Ensure there can be no interference from mating parts when making any
connections but most especially electrical connections.
5. Change grid plate’s shape eliminating all corners and fully insulate the perimeter of the grid plate.
6. Find new insulating material for supports and spacers.
7. Change blind mechanical and electrical designs to be less sensitive to physical changes in insulation.
Design considerations 6 and 7 have been the focus of much of our recent work.
Notable Accomplishments
1. We raised sufficient capital to restart operations.
2. We caught up on our SEC filings and have remained compliant.
3. We conducted a successful tear down and component testing program.
4. When controlling issues identified in component testing, we were able to
demonstrate that we could achieve full voltage without arcing.
5. We were able to achieve the highest voltage with the AOT to date whilst
controlling many of the issues identified in component testing (a new design is
required to control all issues).
6. We identified an unknown issue with our insulation leading to a design change
that lessens the impact and are well on our way to sourcing a new material
that should show 90% improvement.
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