QS Energy, Inc. (OTCPK:QSEP) announced a private placement of convertible promissory notes for gross proceeds of $868,745 on January 1, 2016. The transaction will include participation from accredited investors and non United States investors. The notes do not bear interest and were issued in the face amount equal to 110% of the investor's commitments and would mature after 12 months from their respective issuance.

The notes are convertible into common shares of the company at a fixed conversion price of $0.10 per share. If the notes are not paid in full by the maturity date, the balance remaining on the maturity date shall be increased by 10% and the company shall be required to pay interest at a rate of 10% per annum thereon until all sums there under are paid in full. The company will also issue 4,343,725 warrants to purchase common shares.

The Warrants are exercisable into shares of the company's common stock for a term of one year at an exercise price of $0.10 per share.