QS Energy, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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FY2025 · Filed Mar 31, 2026
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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 2025, 2024 and 2023.
| 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) |
|---|---|---|---|---|---|---|
| 2025 | $1,537,000 | $1,537,000 | $– | $– | $750 | (15,305,000) |
| 2024 | $210,000 | $210,000 | $– | $– | $750 | $(1,934,000) |
| 2023 | $– | $– | $– | $– | $300 | $(1,224,000) |
| (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 2025, 2024, and 2023. |
| (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. |
| 2025 · 2024 · 2023 | ||||||
|---|---|---|---|---|---|---|
| PEO | NEO’s | PEO | Other NEO’s | PEO | Other NEO’s | |
| SCT Amounts | $1,537,000 | – | $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 | 1,537,000 | – | $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., market price of $0.02 on January 1, 2021) based upon the closing market price of the Company’s common stock of $0.15, $0.15, $0.06, and $0.05 at December 31, 2025, December 31, 2024, December 31, 2023, and December 31, 2022, respectively, as traded on The OTC Market (Pink Sheets). |
| (5) | The amounts presented reflect the net loss as reported in the Company’s audited financial statements for the periods presented. |
| (6) | The Company had no Defined Benefit or Actuarial Plans during the periods presented. |
The following table sets forth certain information regarding the compensation earned during the last three fiscal years by the Named Executive Officers:
Summary Compensation Table
| Long-Term Compensation Awards | |||||||
|---|---|---|---|---|---|---|---|
| Name and Principal Position | Fiscal Year | Annual Compensation Salary ($) | Stock Awards ($) | Securities Underlying Options (#) | Full Value of Options ($) | All Other Compensation ($) | Total ($) |
| Cecil Bond Kyte (1) | 2025 | 443,000 | – | 31,536,250 | 1,502,650 | 1,094,000 | 1,537,000 |
| Chief Executive Officer | 2024 | – | – | – | – | 210,000 | 210,000 |
| 2023 | – | – | – | – | – | – | |
| (1) | Mr. Kyte was appointed Chief Executive Officer (“CEO”) effective April 15, 2021. Effective January 1, 2025, the Company entered into an Employment Agreement with Mr. Kyte providing for, among other things, an annual salary of $420,000. In addition, his Annual Compensation Salary included a bonus in November and December 2025 of $23,000. All Other Compensation includes $1,038,000 paid in bonuses, health allowance of $1,500 per month, rent allowance of $1,000 per month, and auto allowance of $500 per month, as outlined in the Employment Agreement with Mr. Kyte. (See “Employment Agreement” below). In addition, his All Other Compensation included a bonus in April 2025 of $20,000. |
OPTION GRANTS IN LAST FISCAL YEAR
During the year ended December 31, 2025, the Company granted 31,536,250 options to Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
No options were exercised by our Named Executive Officer, Cecil Bond Kyte, during the 2025 fiscal year. The following table sets forth the number of shares of our common stock subject to exercisable and unexercisable stock options which the Named Executive Officers held at the end of the 2025 fiscal year.
| Shares Acquired on Exercise · Value Realized · Number of Securities Underlying Unexercised Options at Fiscal Year-End (#) · Value of Unexercised In-the-Money Options ($)(1) | ||||||
|---|---|---|---|---|---|---|
| Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable |
| Cecil Bond Kyte | – | – | 31,536,250 | – | 3,227,788 | – |
| (1) | Market value of our common stock at fiscal year-end minus the exercise price. The closing price of our common stock on December 31, 2025 the last trading day of the year was $0.15 per share. |
Director Compensation Policy
The Company’s Director Compensation Policy (“Director Compensation Policy”) was suspended on April 15, 2021, and reinstated on February 14, 2025. The reinstated Director Compensation Policy provides the following terms and conditions:
| (i) | Board Options: On January 1, 2016, and thereafter, January 1st of each succeeding year, each member of the Board shall receive a grant of unqualified Options to purchase Shares of the Company's common stock. The number of underlying Shares of the Option shall be equal to the quotient of $50,000 divided by the market value of the Company's shares, on the day of the grant, as reported on the OTCBB or, if applicable, NASDAQ. One-twelfth (1/12) of the number of options granted shall vest on the last day of each calendar month for 12 months, beginning January 31st in the year of grant ("First Vesting Date"), and for each successive month through December 31st in the year of grant ("Final Vesting Date"). Options shall expire ten (10) years after the day of grant. All unvested Options shall be cancelled in the event a member of the Board ceases to be a member of the Board for any reason prior to Final Vesting Date of the Option. |
| (ii) | Audit Committee Chairman Options: On January 1, 2016, and thereafter, on January 1st of each succeeding year, the Chairman of the Audit Committee, or the equivalent thereof, shall receive a grant of unqualified Options to purchase Shares of the Company's common stock. The number of underlying Shares of the Option shall be equal to the quotient of $25,000 divided by the market value of the Company's shares, on the day of the grant, as reported on the OTCBB or, if applicable, NASDAQ. One-twelfth (1/12) of the number of options granted shall vest on the last day of each calendar month for 12 months, beginning January 31st in the year of grant ("First Vesting Date"), and for each successive month through December 31st in the year of grant ("Final Vesting Date"). Options shall expire ten (10) years after the day of grant. All unvested Options shall be cancelled in the event the Board member ceases to be Chairman of the Audit Committee for any reason prior to Final Vesting Date of the Option. |
| (iii) | Options Issued upon Appointment to the Board of Directors: Upon appointment to the Board of Directors the appointed Director shall receive a grant of unqualified Options to purchase Shares of the Company's common stock. The number of underlying Shares of the Option shall be equal to the quotient of $50,000 divided by the market value of the Company's shares, on the day of the grant, as reported on the OTCBB or, if applicable, NASDAQ. One-twelfth (1/12) of the number of options granted shall vest on the day preceding the one-month anniversary of the date of grant ("First Vesting Date"), and for each successive month through the day preceding the one-year anniversary of the date of grant ("Final Vesting Date"). Options shall expire ten (10) years after the day of grant. All unvested Options shall be cancelled in the event a member of the Board ceases to be a member of the Board for any reason prior to Final Vesting Date of the Option. |
| (iv) | Options Issued to the Board member who oversees financial audit functions. Upon appointment the Board member who oversees financial audit functions shall receive a grant of unqualified Options to purchase Shares of the Company's common stock. The number of underlying Shares of the Option shall be equal to the quotient of $25,000 divided by the market value of the Company's shares, on the day of the grant, as reported on the OTCBB or, if applicable, NASDAQ. One-twelfth (1/12) of the number of options granted shall vest on the day preceding the one-month anniversary of the date of grant ("First Vesting Date"), and for each successive month through the day preceding the one-year anniversary of the date of grant ("Final Vesting Date"). Options shall expire ten (10) years after the day of grant. All unvested Options shall be cancelled in the event the Director ceases to be Chairman of the Audit Committee for any reason prior to Final Vesting Date of the Option. |
| (v) | Committee Member Compensation: Each member of a committee of the Board shall receive monthly compensation of $500.00, plus reimbursement of reasonable travel and lodging expenses. |
The Board has not established policies and practices (whether written or otherwise) regarding the timing of option grants or other awards in relation to the release of material nonpublic information (“MNPI”) and do not take MNPI into account when determining the timing and terms of stock option or other equity awards to executive officers. The Company does not time the disclosure of MNPI, whether positive or negative, for the purpose of affecting the value of executive compensation.
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 and paid to Mr. Kyte as follows: $1,750 in January 2025 in anticipation of the execution of the Agreement, $480,000 in February 2025, $30,000 in March 2025 and $7,417 in May 2025; the second installment of $519,617 was 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 paid to Mr. Kyte as follows: $51,917 in May 2025 in anticipation of the execution of a customer contract with VIPS Petroleum, $400,000 in June 2025 and $67,250 in July 2025; 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 $6,000 in Board compensation paid to our Directors for calendar year 2025. See our Director Compensation Policy, above.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.