QS Energy, Inc.
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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FY2024 · Filed Mar 28, 2025
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Item 11. Executive Compensation
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Pay vs. Performance
The following table sets forth compensation information for our chief executive officer, referred to below as our PEO(Title), and our other named executive officers, or NEOs, for purposes of comparing their compensation to the value of our shareholders’ investments and our net income, calculated in accordance with SEC regulations, for fiscal years 2024, 2023 and 2022.
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(4) | Net Income(5) |
|---|---|---|---|---|---|---|
| 2024 | $210,000 | $210,000 | $– | $– | $750 | $(1,934,000) |
| 2023 | $– | $– | $– | $– | $300 | $(1,224,000) |
| 2022 | $– | $– | $– | $– | $250 | $(1,548,000) |
| (1) | The dollar amounts reported are the amounts of total compensation reported for the Company’s CEO, Cecil Bond Kyte, in the Summary Compensation Table (“SCT”) for fiscal years 2024, 2023 and 2022. |
| (2) | The following table reflects the adjustments necessary, each of which is prescribed by SEC rule, to calculate the Compensation Actually Paid (“CAP”) from those total amounts reflected in the SCT. The SCT amounts and the CAP amounts do not reflect the actual amount of compensation earned by or paid to the Company’s executives during the applicable years, but rather are amounts determined in accordance with Item 402 of Regulation S-K under the Exchange Act. To determine CAP, the adjustments below were made to the Company’s executive officer’s total compensation. |
| 2024 · 2023 · 2022 | ||||||
|---|---|---|---|---|---|---|
| PEO’s | Other NEO’s | PEO | Other NEO’s | PEO | Other NEO’s | |
| SCT Amounts | $210,000 | $– | $– | $– | $– | $– |
| Adjustments Related to Defined Benefit and Actuarial Plans: | ||||||
| None (6) | – | – | – | – | – | – |
| Adjustments Related to Stock-Based Compensation: | ||||||
| Values reported in Stock Awards and Option Awards columns of the SCT | – | – | – | – | – | – |
| Year-end fair value of awards granted during the year that are outstanding and unvested at the end of the year | – | – | – | – | – | – |
| Decrease in fair value of awards granted in prior years that are outstanding and unvested at year-end | – | – | – | – | – | – |
| Fair value of awards granted and vested during the year | – | – | – | – | – | – |
| Decrease in fair value of awards granted in prior years that vested during the year | – | – | – | – | – | – |
| Decrease in fair value of awards granted in prior years that failed to meet vesting conditions during the year | – | – | – | – | – | – |
| Dividends and other earnings paid on awards before the vesting date | – | – | – | – | – | – |
| CAP Amounts | $210,000 | $– | $– | $– | $– | $– |
| (3) | The amounts presented reflect the total compensation set forth in the SCT for the Company’s Non-PEO NEOs. |
| (4) | The amounts presented reflect the value of a fixed investment of $100 on January 1st of the reporting period (i.e., January 1, 2022) based upon the closing market price of the Company’s common stock of $0.15, $0.06, $0.05, and $0.04 at December 31, 2024, December 31, 2023, December 31, 2022, and December 31, 2021, respectively, as traded on The Nasdaq Capital Market. |
| (5) | The amounts presented reflect the net loss as reported in the Company’s audited financial statements for the periods presented. |
| (6) | The Company had no Defined Benefit or Actuarial Plans during the periods presented. |
The following table sets forth certain information regarding the compensation earned during the last three fiscal years by the Named Executive Officers:
Summary Compensation Table
| Long-Term Compensation Awards | |||||||
|---|---|---|---|---|---|---|---|
| Name and Principal Position | Fiscal Year | Annual Compensation Salary ($) | Stock Awards ($) | Securities Underlying Options (#) | Full Value of Options ($) | All Other Compensation ($) | Total ($) |
| Cecil Bond Kyte (1) | 2024 | – | – | – | – | 210,000 | 210,000 |
| Chief Executive Officer | 2023 | – | – | – | – | – | – |
| 2022 | – | – | – | – | – | – | |
| (1) | Mr. Kyte was appointed Chief Executive Officer (“CEO”) effective April 15, 2021. |
OPTION GRANTS IN LAST FISCAL YEAR
During the year ended December 31, 2023, the Company granted no options to Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
No options were exercised by our Named Executive Officer, Cecil Bond Kyte, during the 2024 fiscal year. The following table sets forth the number of shares of our common stock subject to exercisable and unexercisable stock options which the Named Executive Officers held at the end of the 2024 fiscal year.
| Shares Acquired on Exercise · Value Realized · Number of Securities Underlying Unexercised Options at Fiscal Year-End (#) · Value of Unexercised In-the-Money Options ($)(1) | ||||||
|---|---|---|---|---|---|---|
| Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable |
| Cecil Bond Kyte | – | – | – | – | – | – |
| (1) | Market value of our common stock at fiscal year-end minus the exercise price. The closing price of our common stock on December 30, 2024 the last trading day of the year was $0.15 per share. |
EMPLOYMENT AGREEMENT
On February 19, 2025, QS Energy, Inc. (the “Company”) entered into an Employment Agreement (“Agreement”) with Cecil Bond Kyte, the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). The term (“Term”) of the Agreement is one (1) year and will automatically renew for successive one (1) year periods unless either Mr. Kyte or the Company provides notice, no later than December 1 of the then-current year of the Term, that the Agreement shall not be renewed.
The effective date of the Agreement is January 1, 2025 (“Effective Date”), and provides for Mr. Kyte to continue to serve as the Company’s CEO and CFO for a base salary of $35,000 per month. The Agreement also provides Mr. Kyte with a retention bonus of $1,557,500, payable in three (3) equal installments of $519,617. The Agreement provides that payment of each of the installments is subject to the Company’s financial condition, including the Company maintaining sufficient funds to pay, as due, its operating expenses and establishing a reasonable reserve therefor. Subject to the foregoing condition, the first installment of $519,167 was due on execution of the Agreement; the second installment of $519,617 will be due on the execution, delivery, and effective date of a customer contract for the purchase or lease and installation of the Company’s AOT product; and the third installment of $519,617 will be due on the execution, closing, and effective date of debt or equity financing in favor of the Company in an amount of no less than $5,000,000.
The Agreement also provides a further inducement to Mr. Kyte to continue his employment as CEO and CFO of the Company in the form of stock options. Upon execution of the Agreement, the Company issued to Mr. Kyte an option (“Option”) to purchase 20,817,500 shares of restricted common stock of the Company, at an exercise price of $0.03 per share. The Option immediately vested on the issuance thereof and expires 10 years from the Effective Date.
Upon execution of the Agreement, the Company also issued to Mr. Kyte an additional option (“Additional Option”) to purchase 3,500,000 shares of restricted common stock of the Company, at an exercise price equal to the price quoted in the OTC pink sheets for the Company’s publicly traded shares as of the Effective Date. The Additional Option immediately vested on the issuance thereof, and expires 10 years from the Effective Date.
In addition to the Option and Additional Option described above, the Agreement provides that Mr. Kyte will receive an option to purchase an additional 3,500,000 shares of restricted common stock of the Company on each annual renewal of the Agreement (“Renewal Option”), at a price equal to the price quoted in the OTC pink sheets for the Company’s publicly traded shares on the date of renewal of the Agreement. The Renewal Option will vest at the rate of one-twelfth (1/12th) per month on the last calendar day of each month, provided the Agreement is not terminated and Mr. Kyte continues to serve as the Company’s CEO and CFO on the date of vesting. The Renewal Option will expire 10 years from its issuance date.
The Agreement also contains other terms and conditions usual and customary in employment agreements.
The above description of material terms and conditions of the Agreement is qualified in its entirety by reference to the Agreement, a copy of which is attached to our Form 8-K, filed with the Securities and Exchange Commission on February 21, 2025.
DIRECTORS COMPENSATION
There was no Board compensation paid to our Directors for calendar year 2024. See our Director Compensation Policy, above.
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