QS Energy, Inc.

What they do

QS Energy develops and seeks to commercialize energy efficiency technologies for oil transport. Its only technology is Applied Oil Technology (AOT), a 100% solid-state system that applies a high-intensity electrical field to crude oil in transit to reduce viscosity and pipeline pressure loss. A substantial portion of its patent portfolio is exclusively licensed from Temple University. The AOT product remains in development and testing; commercial acceptance and adoption have not been achieved.

Revenue drivers

• Applied Oil Technology (AOT) — The company's only product line, a crude oil pipeline flow-assurance system intended to reduce viscosity and shippers' reliance on diluents and drag reducing agents. It has generated no revenue.
• AOT license/patent portfolio — Domestic and international patents, a substantial portion exclusively licensed from Temple University. No licensing revenue has been reported.
• QS Energy Pool, Inc. — A wholly owned subsidiary formed in 2015 to explore acquisitions; it has never entered into an acquisition transaction and the company is considering dissolving it.

Recent performance

Revenue was $0 in fiscal years 2024 and 2025 and $0 in each quarter reported through June 30, 2026. Net loss was $15,305,000 in 2025 versus $1,934,000 in 2024, with the increase driven by non-cash compensation of $9,317,000 and other expenses of $2,610,000. Operating expenses rose to $13,312,000 from $1,385,000, and research and development rose to $1,611,000 from $191,000 on AOT prototype and demonstration costs. Operating cash flow was negative $4,008,000 in 2025. As of June 30, 2026, cash was $120,000 against $5.7 million of liabilities and negative shareholder equity of $5.5 million.

Strategy

Management states it continues to devote the bulk of its efforts to promotion, design, testing and commercial manufacturing of the AOT pipeline product. The company says it will continue commercialization efforts in 2026 only if it can raise sufficient capital, primarily through sales of common stock and convertible debt. In 2025 it funded operations through cash reserves, warrant exercises and convertible notes. It is also considering dissolving QS Energy Pool to reduce costs.

Risks

• Going concern / no revenue — The company has incurred negative operating cash flow since 1998, has never generated significant revenue, and management and its auditors concluded there is substantial doubt about its ability to continue as a going concern.
• Liquidity and past-due obligations — As of December 31, 2025, 51 notes payable with an aggregate balance of $1,116,000 and an obligation to a former officer were past due, and the company had $6,000 of cash.
• Technology adoption risk — AOT is still in development and testing, and commercial acceptance and adoption by the upstream and midstream pipeline marketplace have not been achieved.
• Dilution from financing — Operations have been funded primarily through sales of common stock and convertible debt, and the company says it needs to raise substantial additional capital in 2026.

Outlook

Management says efforts to commercialize AOT during 2026 depend on raising sufficient capital, and it can give no assurance that capital will be available on acceptable terms. It also can give no assurance the pipeline industry will accept and deploy the technology. No revenue guidance or signed commercial deployments are disclosed.