unless otherwise expressly indicated , the information set forth in this form 10-k is as of december 31 , 2019 , and we undertake no duty to update this information . 25 overview the company has not generated significant revenues since its inception in february 1998. we continue to devote the bulk of our efforts to the promotion , design , testing and the commercial manufacturing and operations of our crude oil pipeline products in the upstream and midstream energy sector . we anticipate that these efforts will continue during 2020. our expenses to date have been funded primarily through the sale of shares of common stock and convertible debt , as well as proceeds from the exercise of stock purchase warrants and options . we raised capital in 2019 and also need to raise substantial additional capital in 2020 , and possibly beyond , to fund our sales and marketing efforts , continuing research and development , and certain other expenses , until our revenue base grows sufficiently . results of operation qs energy , inc. consolidated statements of operations replace_table_token_1_th revenue comparison , 2019 and 2018 the company recognized no revenues during the twelve-month periods ended december 31 , 2018 and december 31 , 2019. operating expense comparison , 2019 and 2018 operating expenses were $ 2,159,000 for the fiscal year ended december 31 , 2019 , compared to $ 1,853,000 for the fiscal year ended december 31 , 2018 , an increase of $ 306,000. this increase was attributable to a decrease in non-cash expenses of $ 12,000 and an increase in cash expenses of $ 318,000. specifically , the decrease in non-cash expenses is attributable to a decrease in depreciation expense of $ 16,000 offset by an increase in stock-based compensation related to warrants and options issued to employees , directors and consultants of $ 4,000. the increase in cash expenses is attributable to increases in consulting fees of $ 83,000 , mail and freight of $ 7,000 , insurance of $ 59,000 , office expenses of $ 29,000 , public and investor relations of $ 116,000 , patent maintenance expenses of 39,000 , rent and utilities of $ 32,000 , travel expenses of $ 24,000 , property tax expenses of $ 9,000 , and other expenses of $ 3,000 , offset by decreases in corporate expenses of $ 29,000 , legal and accounting fees of $ 23,000 , and salaries and benefits of $ 31,000 . 26 research and development expenses were $ 891,000 for the fiscal year ended december 31 , 2019 , compared to $ 208,000 for the fiscal year ended december 31 , 2018 , an increase of $ 683,000. this increase is attributable to increases in aot prototype and demonstration project development costs of $ 683,000. interest expenses were $ 2,571,000 for the fiscal year ended december 31 , 2019 , compared to $ 998,000 for the fiscal year ended december 31 , 2018 , an increase of $ 1,573,000. this increase is attributable to an increase in interest and financing expense of $ 1,559,000 to account the fair value of the warrants issued with our convertible notes and the notes ' beneficial conversion feature , and a decrease in other non-cash interest expenses of $ 14,000. we had a net loss of $ 5,621,000 or $ 0.02 loss per share for the fiscal year ended december 31 , 2019 compared to a net loss of $ 3,059,000 or $ 0.01 loss per share for the fiscal year ended december 31 , 2018. story_separator_special_tag 10pt times new roman , times , serif ; margin : 0pt 0 ; text-align : justify ; text-indent : 0.5in `` > estimates the preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period . certain significant estimates were made in connection with preparing our consolidated financial statements as described in note 2 to notes to consolidated financial statements . actual results could differ from those estimates . 28 stock-based compensation the company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs . the company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the financial accounting standards board whereas the value of the award is measured on the date of grant and recognized over the vesting period . from prior periods until december 31 , 2018 , the company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of fasb asc 505-50 , equity - based payments to non-employees . measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable : ( a ) the goods or services received or ( b ) the equity instruments issued . the final fair value of the share-based payment transaction is determined at the performance completion date . in june 2018 , the fasb issued asu no . 2018-07 , compensation - stock compensation ( topic 718 ) : improvements to nonemployee share-based payment accounting ( “ asu 2018-07 ” ) . the guidance was issued to simplify the accounting for share-based transactions by expanding the scope of asu 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees . as a result , nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date , taking into consideration the probability of satisfying performance conditions . we adopted asu 2018-07 on january 1 , 2019. the adoption of the standard did not have a material impact on our financial story_separator_special_tag unless otherwise expressly indicated , the information set forth in this form 10-k is as of december 31 , 2019 , and we undertake no duty to update this information . 25 overview the company has not generated significant revenues since its inception in february 1998. we continue to devote the bulk of our efforts to the promotion , design , testing and the commercial manufacturing and operations of our crude oil pipeline products in the upstream and midstream energy sector . we anticipate that these efforts will continue during 2020. our expenses to date have been funded primarily through the sale of shares of common stock and convertible debt , as well as proceeds from the exercise of stock purchase warrants and options . we raised capital in 2019 and also need to raise substantial additional capital in 2020 , and possibly beyond , to fund our sales and marketing efforts , continuing research and development , and certain other expenses , until our revenue base grows sufficiently . results of operation qs energy , inc. consolidated statements of operations replace_table_token_1_th revenue comparison , 2019 and 2018 the company recognized no revenues during the twelve-month periods ended december 31 , 2018 and december 31 , 2019. operating expense comparison , 2019 and 2018 operating expenses were $ 2,159,000 for the fiscal year ended december 31 , 2019 , compared to $ 1,853,000 for the fiscal year ended december 31 , 2018 , an increase of $ 306,000. this increase was attributable to a decrease in non-cash expenses of $ 12,000 and an increase in cash expenses of $ 318,000. specifically , the decrease in non-cash expenses is attributable to a decrease in depreciation expense of $ 16,000 offset by an increase in stock-based compensation related to warrants and options issued to employees , directors and consultants of $ 4,000. the increase in cash expenses is attributable to increases in consulting fees of $ 83,000 , mail and freight of $ 7,000 , insurance of $ 59,000 , office expenses of $ 29,000 , public and investor relations of $ 116,000 , patent maintenance expenses of 39,000 , rent and utilities of $ 32,000 , travel expenses of $ 24,000 , property tax expenses of $ 9,000 , and other expenses of $ 3,000 , offset by decreases in corporate expenses of $ 29,000 , legal and accounting fees of $ 23,000 , and salaries and benefits of $ 31,000 . 26 research and development expenses were $ 891,000 for the fiscal year ended december 31 , 2019 , compared to $ 208,000 for the fiscal year ended december 31 , 2018 , an increase of $ 683,000. this increase is attributable to increases in aot prototype and demonstration project development costs of $ 683,000. interest expenses were $ 2,571,000 for the fiscal year ended december 31 , 2019 , compared to $ 998,000 for the fiscal year ended december 31 , 2018 , an increase of $ 1,573,000. this increase is attributable to an increase in interest and financing expense of $ 1,559,000 to account the fair value of the warrants issued with our convertible notes and the notes ' beneficial conversion feature , and a decrease in other non-cash interest expenses of $ 14,000. we had a net loss of $ 5,621,000 or $ 0.02 loss per share for the fiscal year ended december 31 , 2019 compared to a net loss of $ 3,059,000 or $ 0.01 loss per share for the fiscal year ended december 31 , 2018. story_separator_special_tag 10pt times new roman , times , serif ; margin : 0pt 0 ; text-align : justify ; text-indent : 0.5in `` > estimates the preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period . certain significant estimates were made in connection with preparing our consolidated financial statements as described in note 2 to notes to consolidated financial statements . actual results could differ from those estimates . 28 stock-based compensation the company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs . the company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the financial accounting standards board whereas the value of the award is measured on the date of grant and recognized over the vesting period . from prior periods until december 31 , 2018 , the company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of fasb asc 505-50 , equity - based payments to non-employees . measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable : ( a ) the goods or services received or ( b ) the equity instruments issued . the final fair value of the share-based payment transaction is determined at the performance completion date . in june 2018 , the fasb issued asu no . 2018-07 , compensation - stock compensation ( topic 718 ) : improvements to nonemployee share-based payment accounting ( “ asu 2018-07 ” ) . the guidance was issued to simplify the accounting for share-based transactions by expanding the scope of asu 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees . as a result , nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date , taking into consideration the probability of satisfying performance conditions . we adopted asu 2018-07 on january 1 , 2019. the adoption of the standard did not have a material impact on our financial

liquidity and capital resources general we have incurred negative cash flow from operations since our inception in 1998. as of december 31 , 2019 , we had cash of $ 479,000 and a stockholders ' deficit of $ 2,269,000. our operating cash flow in 2019 was funded primarily through cash reserves , the exercise of stock purchase warrants and options for cash , and the issuance of convertible notes for cash . the accompanying consolidated financial statements have been prepared on a going concern basis , which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business . as reflected in the accompanying consolidated financial statements , the company had a net loss of $ 5,621,000 and used cash in operations of $ 2,678,000 for the year ended december 31 , 2019. these factors raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued . our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our business plan . the consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources general we have incurred negative cash flow from operations since our inception in 1998. as of december 31 , 2019 , we had cash of $ 479,000 and a stockholders ' deficit of $ 2,269,000. our operating cash flow in 2019 was funded primarily through cash reserves , the exercise of stock purchase warrants and options for cash , and the issuance of convertible notes for cash . the accompanying consolidated financial statements have been prepared on a going concern basis , which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business . as reflected in the accompanying consolidated financial statements , the company had a net loss of $ 5,621,000 and used cash in operations of $ 2,678,000 for the year ended december 31 , 2019. these factors raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued . our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our business plan . the consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern .
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 Suspicious Activity Report : unless otherwise expressly indicated , the information set forth in this form 10-k is as of december 31 , 2019 , and we undertake no duty to update this information . 25 overview the company has not generated significant revenues since its inception in february 1998. we continue to devote the bulk of our efforts to the promotion , design , testing and the commercial manufacturing and operations of our crude oil pipeline products in the upstream and midstream energy sector . we anticipate that these efforts will continue during 2020. our expenses to date have been funded primarily through the sale of shares of common stock and convertible debt , as well as proceeds from the exercise of stock purchase warrants and options . we raised capital in 2019 and also need to raise substantial additional capital in 2020 , and possibly beyond , to fund our sales and marketing efforts , continuing research and development , and certain other expenses , until our revenue base grows sufficiently . results of operation qs energy , inc. consolidated statements of operations replace_table_token_1_th revenue comparison , 2019 and 2018 the company recognized no revenues during the twelve-month periods ended december 31 , 2018 and december 31 , 2019. operating expense comparison , 2019 and 2018 operating expenses were $ 2,159,000 for the fiscal year ended december 31 , 2019 , compared to $ 1,853,000 for the fiscal year ended december 31 , 2018 , an increase of $ 306,000. this increase was attributable to a decrease in non-cash expenses of $ 12,000 and an increase in cash expenses of $ 318,000. specifically , the decrease in non-cash expenses is attributable to a decrease in depreciation expense of $ 16,000 offset by an increase in stock-based compensation related to warrants and options issued to employees , directors and consultants of $ 4,000. the increase in cash expenses is attributable to increases in consulting fees of $ 83,000 , mail and freight of $ 7,000 , insurance of $ 59,000 , office expenses of $ 29,000 , public and investor relations of $ 116,000 , patent maintenance expenses of 39,000 , rent and utilities of $ 32,000 , travel expenses of $ 24,000 , property tax expenses of $ 9,000 , and other expenses of $ 3,000 , offset by decreases in corporate expenses of $ 29,000 , legal and accounting fees of $ 23,000 , and salaries and benefits of $ 31,000 . 26 research and development expenses were $ 891,000 for the fiscal year ended december 31 , 2019 , compared to $ 208,000 for the fiscal year ended december 31 , 2018 , an increase of $ 683,000. this increase is attributable to increases in aot prototype and demonstration project development costs of $ 683,000. interest expenses were $ 2,571,000 for the fiscal year ended december 31 , 2019 , compared to $ 998,000 for the fiscal year ended december 31 , 2018 , an increase of $ 1,573,000. this increase is attributable to an increase in interest and financing expense of $ 1,559,000 to account the fair value of the warrants issued with our convertible notes and the notes ' beneficial conversion feature , and a decrease in other non-cash interest expenses of $ 14,000. we had a net loss of $ 5,621,000 or $ 0.02 loss per share for the fiscal year ended december 31 , 2019 compared to a net loss of $ 3,059,000 or $ 0.01 loss per share for the fiscal year ended december 31 , 2018. story_separator_special_tag 10pt times new roman , times , serif ; margin : 0pt 0 ; text-align : justify ; text-indent : 0.5in `` > estimates the preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period . certain significant estimates were made in connection with preparing our consolidated financial statements as described in note 2 to notes to consolidated financial statements . actual results could differ from those estimates . 28 stock-based compensation the company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs . the company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the financial accounting standards board whereas the value of the award is measured on the date of grant and recognized over the vesting period . from prior periods until december 31 , 2018 , the company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of fasb asc 505-50 , equity - based payments to non-employees . measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable : ( a ) the goods or services received or ( b ) the equity instruments issued . the final fair value of the share-based payment transaction is determined at the performance completion date . in june 2018 , the fasb issued asu no . 2018-07 , compensation - stock compensation ( topic 718 ) : improvements to nonemployee share-based payment accounting ( “ asu 2018-07 ” ) . the guidance was issued to simplify the accounting for share-based transactions by expanding the scope of asu 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees . as a result , nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date , taking into consideration the probability of satisfying performance conditions . we adopted asu 2018-07 on january 1 , 2019. the adoption of the standard did not have a material impact on our financial story_separator_special_tag unless otherwise expressly indicated , the information set forth in this form 10-k is as of december 31 , 2019 , and we undertake no duty to update this information . 25 overview the company has not generated significant revenues since its inception in february 1998. we continue to devote the bulk of our efforts to the promotion , design , testing and the commercial manufacturing and operations of our crude oil pipeline products in the upstream and midstream energy sector . we anticipate that these efforts will continue during 2020. our expenses to date have been funded primarily through the sale of shares of common stock and convertible debt , as well as proceeds from the exercise of stock purchase warrants and options . we raised capital in 2019 and also need to raise substantial additional capital in 2020 , and possibly beyond , to fund our sales and marketing efforts , continuing research and development , and certain other expenses , until our revenue base grows sufficiently . results of operation qs energy , inc. consolidated statements of operations replace_table_token_1_th revenue comparison , 2019 and 2018 the company recognized no revenues during the twelve-month periods ended december 31 , 2018 and december 31 , 2019. operating expense comparison , 2019 and 2018 operating expenses were $ 2,159,000 for the fiscal year ended december 31 , 2019 , compared to $ 1,853,000 for the fiscal year ended december 31 , 2018 , an increase of $ 306,000. this increase was attributable to a decrease in non-cash expenses of $ 12,000 and an increase in cash expenses of $ 318,000. specifically , the decrease in non-cash expenses is attributable to a decrease in depreciation expense of $ 16,000 offset by an increase in stock-based compensation related to warrants and options issued to employees , directors and consultants of $ 4,000. the increase in cash expenses is attributable to increases in consulting fees of $ 83,000 , mail and freight of $ 7,000 , insurance of $ 59,000 , office expenses of $ 29,000 , public and investor relations of $ 116,000 , patent maintenance expenses of 39,000 , rent and utilities of $ 32,000 , travel expenses of $ 24,000 , property tax expenses of $ 9,000 , and other expenses of $ 3,000 , offset by decreases in corporate expenses of $ 29,000 , legal and accounting fees of $ 23,000 , and salaries and benefits of $ 31,000 . 26 research and development expenses were $ 891,000 for the fiscal year ended december 31 , 2019 , compared to $ 208,000 for the fiscal year ended december 31 , 2018 , an increase of $ 683,000. this increase is attributable to increases in aot prototype and demonstration project development costs of $ 683,000. interest expenses were $ 2,571,000 for the fiscal year ended december 31 , 2019 , compared to $ 998,000 for the fiscal year ended december 31 , 2018 , an increase of $ 1,573,000. this increase is attributable to an increase in interest and financing expense of $ 1,559,000 to account the fair value of the warrants issued with our convertible notes and the notes ' beneficial conversion feature , and a decrease in other non-cash interest expenses of $ 14,000. we had a net loss of $ 5,621,000 or $ 0.02 loss per share for the fiscal year ended december 31 , 2019 compared to a net loss of $ 3,059,000 or $ 0.01 loss per share for the fiscal year ended december 31 , 2018. story_separator_special_tag 10pt times new roman , times , serif ; margin : 0pt 0 ; text-align : justify ; text-indent : 0.5in `` > estimates the preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period . certain significant estimates were made in connection with preparing our consolidated financial statements as described in note 2 to notes to consolidated financial statements . actual results could differ from those estimates . 28 stock-based compensation the company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs . the company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the financial accounting standards board whereas the value of the award is measured on the date of grant and recognized over the vesting period . from prior periods until december 31 , 2018 , the company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of fasb asc 505-50 , equity - based payments to non-employees . measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable : ( a ) the goods or services received or ( b ) the equity instruments issued . the final fair value of the share-based payment transaction is determined at the performance completion date . in june 2018 , the fasb issued asu no . 2018-07 , compensation - stock compensation ( topic 718 ) : improvements to nonemployee share-based payment accounting ( “ asu 2018-07 ” ) . the guidance was issued to simplify the accounting for share-based transactions by expanding the scope of asu 2018-07 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees . as a result , nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date , taking into consideration the probability of satisfying performance conditions . we adopted asu 2018-07 on january 1 , 2019. the adoption of the standard did not have a material impact on our financial

