QS Energy Inc (OTC: QSEP) is an oil and gas technology development company that is developing the Applied Oil Technology (AOT) system, a device designed to increase crude oil pipeline throughput by reducing viscosity, friction losses, and the need for diluents. The company has generated no revenue since 2014 and has incurred net losses every year since its founding in February 1998, including net losses of $15,305,000 and $1,934,000 for fiscal years ended December 31, 2025 and 2024, respectively. QSEP is a pre-commercial stage company with two employees as of December 31, 2025, funded entirely through external capital raises via convertible notes and equity issuances. The auditor issued a going-concern opinion as of the fiscal year ended December 31, 2025, citing recurring operating losses, negative operating cash flows since inception, a stockholders' deficit, and $1,116,000 in past-due notes payable. Cash on hand was $6,000 at December 31, 2025, with monthly cash burn of approximately $334,000 during fiscal 2025.

Revenue model

No revenue has been generated since 2014. The intended revenue model is technology licensing or equipment sales of the AOT system to pipeline operators, with a potential ancillary service offering of on-demand electronic diluent as a fee-based service. Operations are funded entirely through best-efforts third-party financing via convertible notes and equity issuances.

Products and services

Applied Oil Technology (AOT): an electromagnetic device designed to enhance crude oil pipeline throughput, reduce operating pressure, lower friction losses, and reduce diluent usage for midstream and upstream pipeline operators. A second product, Joule Heat, which reduces oil viscosity through electrical heating for upstream crude transport, was placed in suspended development as of December 2015. An AOT demonstration project installed with a major U.S. pipeline operator experienced multiple failures and was removed from the demonstration site, as disclosed in the 10-K filed March 31, 2026.

Customers and end markets

Target customers are midstream pipeline transport operators and upstream crude oil transporters, including truck, rail, and marine carriers of heavy crude oil. The company has one disclosed demonstration partnership with an unnamed major U.S. pipeline operator. No paying customers are identified in the filing.

Value-chain role

Technology developer and equipment supplier positioned between crude oil producers and pipeline infrastructure operators. The AOT system targets the transportation bottleneck in moving heavy crude from wellhead to refinery, aiming to increase pipeline capacity and reduce per-barrel transport costs.

Geographic exposure

Target markets described as U.S., Canada, South and Central America, and other global regions with pipeline infrastructure imbalances, per the 10-K filed March 31, 2026. No revenue-generating operations in any geography as of December 31, 2025.

Source: SEC 10-K, filed 2026-03-31

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