INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement (“IP Security Agreement”), is entered into this 8th day of June, 2016 (the “IP Security Agreement”) by and between QUANTUMSPHERE, INC., a Nevada corporation with its address at 2905 Tech Center Dr., Santa Ana, CA 92705 (the “Borrower”) and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability company, with its address at 1040 First Avenue, Suite 190, New York, NY 10022 (“Collateral Agent”), on behalf of each of the secured parties listed on the signature page hereto (collectively, the “Secured Parties”).

RECITALS

WHEREAS, this IP Security Agreement is a supplement to that certain Security Agreement and Intercreditor and Collateral Agent Agreement, dated as of even date herewith, by and between the Borrower and the Secured Parties (collectively, the “Agreement”);

WHEREAS, all capitalized terms not defined herein shall have the definitions ascribed to them in the Agreement, and are incorporated herein by reference. If there is a conflict between the definitions, terms or provisions of this IP Security Agreement and the Agreement, the definitions, terms or provisions of the Agreement shall control; and

WHEREAS, this IP Security Agreement is executed for the purpose of filing a short form security agreement in the United States Patent and Trademark Office (the “USPTO”), which sets forth the Borrower’s pledge of its intellectual property as security for the indebtedness, represented by the Secured Promissory Notes (collectively, “Notes”), issued by Borrower in favor of the Secured Parties.

The Borrower hereby grants to the Lender a security interest in and lien on all of the intellectual property assets owned by the Borrower, including without limitation all patents and trademarks set forth in Exhibit A, attached hereto and incorporated herein by reference, wherever located and whether now owned or hereafter acquired, all goodwill of the business of the Borrower connected with the use of, or otherwise symbolized by, such intellectual property, all rights to sue for infringement of such intellectual property, and all parts, replacements, substitutions, profits, products, amendments, updates and cash and non-cash proceeds of any of the foregoing (including insurance proceeds, of any kind, including those payable by reason of loss or damage thereto) in any form and wherever located, and all written or electronically recorded books and records relating to any such assets and other rights relating thereto, wherever located and whether now owned or hereafter acquired (collectively the “IP Collateral”).

All other terms, conditions, agreements, obligations, representations, warranties, covenants, definitions, exhibits and miscellaneous terms, conditions, agreements and obligations set forth in the Agreement are restated and incorporated herein by reference.

[Signatures appear on the following page]

IN WITNESS WHEREOF, the parties hereto have caused this Intellectual Property Security Agreement to be duly executed as of the day and year first above written.

EXHIBIT A

QUANTUMSPHERE, INC. - IP PORTFOLIO