Replies to post #52635 on QS Energy Inc (QSEP)

[zerosnoop]

Based on the confirmation of these most recent and positive results using the fully assembled AOT, a medium gravity pipeline spec oil (API 23) was procured and pumped into the AOT. We ran the AOT with the reworked original grid pack for an hour at 10 kV and saw no anomalies and no short circuits, confirming our belief that the short condition was a result of failed insulation. We were then able to apply 20 kV to the oil despite utilizing a reworked original grid pack. This high voltage result seems to demonstrate that we have solved the problems reported in June of 2020. Subsequent testing in the laboratory showed the oil (API 23) would support a voltage of 40 kV. Between the laboratory data and issues found during recent component testing we are in the process of confirming the final design criteria for a new grid pack which represents the remaining 20% necessary for full treatment effect.

[zerosnoop]

NOT TRUE according to the GEMS & FACTS from the latest 10Q filing

We have also validated that a new design concept for the grid pack will reduce arcing and allowed us to apply full voltage during a recent test. A 3rd party engineering firm with proper experience and three-dimensional modeling software was engaged.

In August 2022 we completed the testing of the stack assembly. The stack assembly did not suffer the arcing problems we saw when testing a stack assembly made from parts of the full size AOT. It appears that we have accomplished the goal of eliminating the sources of arcing that prevented us from achieving treatment voltages with this new design.

The power supply did not shut down due to arcing nor any other issues and we were able to test the stack assembly up to 40 kV in oil; the maximum output of the power supply. While we do not expect to see free water in pipeline quality crude oil, we wanted to see the effect of free water on the stack assembly. We added sufficient water to disrupt normal operation, but we were able to slowly increase voltage to treatment voltage over a time. This gives us confidence that if water were to enter the system, we would be able to return a full size AOT to normal operating conditions.

we would also consider designing, testing and commercializing a smaller scale AOT unit targeting upstream, trucking and rail applications. This strategy could reduce development time and costs, with the intention of moving back into the midstream crude oil pipeline market subsequent to successful commercial operations at a smaller scale.

[zerosnoop]

UPDATED. More "INSIDER BUYING". Below is a recap of all the RECENT "INSIDER BUYING" by QS directors. This includes the RECENT $275,000 investment by the uncompensated ceo Kyte. The list CONTINUES to grow & grow

https://ir.qsenergy.com/all-sec-filings/content/0001683168-22-005510/ownership.html

https://ir.qsenergy.com/all-sec-filings/content/0001683168-21-003139/ownership.html

https://ir.qsenergy.com/all-sec-filings/content/0001683168-21-003137/ownership.html

https://ir.qsenergy.com/all-sec-filings/content/0001683168-20-002014/ownership.html

https://ir.qsenergy.com/all-sec-filings/content/0001683168-20-002016/ownership.html


(1) On 8/5/2016 Don Dickson invests $70,000 in a Private Placement offering of convertible notes and warrants.

(2) On 10/13/2016 Don Dickson converts his note into common stock.

(3) On 4/17/2017 Dr. Eric Bunting invests $50,000 in a Private Placement offering of convertible notes and warrants.

(4) On 5/15/17 Richard Munn invests $10,000 in a Private Placement offering of convertible notes and warrants. He immediately converts the notes to common stock.

(5) On 5/15/2017 Richard Munn buys 42,000 shares of common stock in the open market at $0.24 per share.

(6) On 5/31/2017 Thomas Bundros invests $100,000 in a private Placement of convertible notes and warrants. He immediately converts the notes to common stock.

(7) On 7/19/2017 Dr. Eric Bunting invests an additional $40,000 to convert his warrants and stock options into common stock well before their expiration dates.

(8) On 7/30/2017 Don Dickson invests an additional $38,500 to convert warrants into common stock.

(9) On 8/2/2017 Gary Buchler invests $50,000 to buy common stock at market prices and convert all of his vested stock options.

(10) On 10/2/2017 Dr. Eric Bunting invests an additional $33,875 to buy 125,000 shares of common stock in the open market at $.271 per share. He also converts 178,002 of his newly vested stock options into common stock at an out of pocket cost of $12,460. This brings his total common stock holdings to 6,735,430 shares worth approx. $1.8 million at today's price.

(11) On 2/6/2018 Dr. Eric Bunting converts 179,710 of his newly vested stock options into common stock, well before their expiration date, at an out of pocket cost of $12,580.

(12) On 3/30/2018 Dr. Eric Bunting invests another $40,000 in a private Placement of convertible notes and warrants. He immediately converts the notes to common stock.

(13) On 3/30/2018 Dr. Eric Bunting invests an additional $18,000 to convert warrants into common stock, well before their expiration date.

(14) On 05/14/2018 Richard Munn invests an additional $5,500 to convert his 110,000 warrants into common stock.

(15) On 11/26/2018 Dr Eric Bunting invests another $25,000 in a private Placement of convertible notes and warrants.

(16) On 11/26/2018 Don Dickson invests another $25,000 in a private Placement of convertible notes and warrants.

(17) On 02/21/2019 ceo Jason Lane invests $25,000 in a private Placement of convertible notes and warrants.

(18) On 02/25/2019 Thomas Bundros invests $15,000 in a private Placement of convertible notes and warrants.

(19) On 02/25/2019 Richard Munn invests $10,000 in a private Placement of convertible notes and warrants.

(20) On 3/21/2019 Dr. Eric Bunting invests an additional $50,000 to convert warrants into common stock, well before their expiration date.

(21) On 04/03/2019 Thomas Bundros invests an additional $8,250 to convert warrants into common stock, well before their expiration date.

(22) On 02/25/2019 Richard Munn invests an additional $11,000 to convert warrants into common stock, well before their expiration date.

(23) On 06/04/2019 Dr Eric Bunting invests another $100,000 in a private Placement of convertible notes and warrants.

(24) On 09/23/2019 Dr Eric Bunting invests another $200,000 in a private Placement of convertible notes and warrants.

(25) On 03/23/2020 Dr Eric Bunting invests another $30,000 in a private Placement of convertible notes and warrants.

(26) On 03/18/2020 chairman Jason Lane invests another $20,000 in a private Placement of convertible notes and warrants.

(27) On 06/12/2020 ceo Don Dickson invests another $10,000 in a private placement of convertible notes and warrants.

(28) On 06/19/2020 cfo Michael McMullen invests $6,600 in a private placement of convertible notes and warrants.

(29) On 06/19/2020 Richard Munn invests another $10,000 in a private placement of convertible notes and warrants.

(30) On 06/19/2020 Dr Eric Bunting invests another $30,000 in a private placement of convertible notes and warrants.

(31) 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.

(32) On 08/10/2022 Dr Eric Bunting invests an additional $20,000 to convert warrants into common stock, well before their expiration date in 2029.

All of the individuals named above are part of QSEP's Board of Directors. All of them are investing their own money in QSEP. While NDA's may prevent them from talking about the specifics of any particular corporate relationships, this is a powerful alternative way to express just how confident they are in QSEP's immediate future.

I've emphasized the word immediate because I think the motivation for early conversion of 10 year stock options is based on a strong belief that the stock will be going substantially higher in the near term. This early conversion will reduce the future tax burden substantially if that were to occur (long term capital gain instead of ordinary income).

The "bargain element" of a stock option is taxed as ordinary income while the remaining gain is taxed at the lower capital gains rate. Exercise of a stock option while the underlying security price is low insures that the "bargain element" will also be low allowing for the best tax outcome (the bargain element is the difference between the price at the time of exercise and the grant price). For the owner of a QSEP stock option it requires a very powerful incentive to give up a 10 year "free look". A savvy investor would hold onto a stock option as long as possible, exercising and putting up money only at a time when the outlook was so positive that it is likely to move the stock substantially higher. Anybody exercising their stock options today must feel now is that time.

[zerosnoop]

INCORRECT according to the FACTS from the latest shareholders update below

https://s3.amazonaws.com/content.stockpr.com/qsenergy/files/news/2022/Component_Testing_August_9_2022.pdf

Increasing Confidence

As stated in our previous “July Upcoming Component Testing” update, we anticipated that by August we would be conducting the component testing. As of August 8, 2022, we completed a successful component test. All parts arrived from our vendors last week and we built the stack assembly. All the parts fit as designed with no surprises.

The stack assembly performed as expected. We were able to apply the maximum voltage of the power supply to the stack assembly when submerged in oil. With this updated design, the power supply did NOT shut down due to arcing nor shorting which occurred with the previous design during various testing regimes. We achieved exactly what we hoped to and will now proceed to the hydrostatic test.

Cecil Bond Kyte said “I could not be happier with the results. We have validated the design changes which addressed the problems identified in the component testing of the prior design and I am looking forward to a positive hydrostatic test. We did what we said we would do and will continue to do so.”