UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
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November 26, 2014
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VIASPACE Inc.
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(Exact name of registrant as specified in its charter)
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Nevada
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333-110680
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76-0742386
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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382 N. Lemon Ave., Ste. 364, Walnut, California
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91789
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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626-768-3360
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Not Applicable
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Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On November 26, 2014, the Registrant entered into a nonbinding Letter of Intent (LOI) to acquire luxury cosmetics company, Elite Therapeutics. The Registrant and Elite Therapeutics have agreed to carefully examine the details and potential benefits of an all-stock acquisition with an anticipated closing in the first quarter of 2015.
VIASPACE Chairman, Dr. Kevin Schewe, is the founder and majority shareholder of Elite Therapeutics, a private company based in Arvada, Colorado. Elite Therapeutics was founded in 2007 as Bad Love Cosmetics Company, LLC and began doing business as Elite Therapeutics with high quality, results-driven, medical-grade cosmetics in late 2010. Elite Therapeutics has an active, full line of luxury products and associated inventory. Bad Love Cosmetics has a cutting edge line of products in development for launch in 2015 and beyond.
A copy of the Press Release announcing this is attached to this Form 8-K as Exhibit 99.1. A copy of the LOI is attached to this Form 8-K as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
99.1 Press Release dated December 1, 2014.
99.2 Letter of Intent dated November 26, 2014 between VIASPACE Inc. and Bad Love Cosmetics Company, LLC, DBA Elite Therapeutics.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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VIASPACE Inc.
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December 3, 2014
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By:
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Stephen J. Muzi
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Name: Stephen J. Muzi
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Title: Chief Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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99.1
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Press Release dated December 1, 2014
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99.2
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Letter of Intent dated November 26, 2014 between Registrant and Bad Love Cosmetics Company, LLC, DBA Elite Therapeutics
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Ex. 99.1
VIASPACE Signs Letter of Intent to Acquire Elite Therapeutics — Chairman Discusses Continuing
Evolution of Company’s Future
December 1, 2014 — Walnut, California — VIASPACE Inc. (OTC: VSPC) today announced that it has
signed a nonbinding Letter of Intent (LOI) to acquire luxury cosmetics company, Elite Therapeutics
(www.elitetherapeutics.com). VIASPACE and Elite Therapeutics have agreed to carefully
examine the details and potential benefits of an all-stock acquisition with an anticipated closing
in the first quarter of 2015.
VIASPACE Chairman, Dr. Kevin Schewe is the founder and majority shareholder of Elite Therapeutics
which is based in Denver, Colorado. Dr. Schewe discussed the concept and potential benefits of the
acquisition: “There are three primary motivating factors driving us to look at this potential
acquisition: accelerating VIASPACE’s revenues in 2015 and beyond, creating synergy and diversity
for greater long-term shareholder value and establishing an eventual succession plan for the
leadership of the company.”
“Elite Therapeutics was founded in 2007 as Bad Love Cosmetics Company, LLC and began doing business
as Elite Therapeutics with high quality, results-driven, medical-grade cosmetics in late 2010.
After four full years in retail and wholesale business, Elite Therapeutics is debt-free, has grown
steadily at 50% or more per year and management believes the business’ revenue trajectory will grow
further in 2015 and possibly become profitable as well. Elite Therapeutics has an active, full line
of luxury products and associated inventory. Bad Love Cosmetics has a cutting edge line of products
in development for launch in 2015 and beyond.”
Dr. Schewe continued, “VIASPACE wishes to explore ways to increase revenue and accelerate
shareholder value; and in addition, VIASPACE and its shareholders may benefit if it grows the size
of its shareholder base and shareholder audience. Combining revenues from Elite Therapeutics and
VIASPACE for 2015 and beyond has the potential of substantially increasing revenues. Combining the
global and diverse growth opportunities for both companies may help accelerate overall corporate
value.”
“Elite Therapeutics has a large, loyal and growing customer base, and many of these clients and
interested parties may welcome the opportunity to be able to invest in Elite Therapeutics as part
of a larger publicly traded company. This new, potential investor audience would have the
opportunity to invest in Elite Therapeutics, and in doing so, would receive a VIASPACE stock share
(VSPC) that also includes a leading-edge global company focused on green, renewable bioenergy,
biofuels, biomass materials and animal feed.”
“The cosmetics industry has a global sales volume of $300 billion per year and is growing at 4.5%
per year. Europe and the US represent the bulk of sales, but the fastest growth is in Japan,
China, Southeast Asia and India. When I started Elite Therapeutics, my goal was to create and grow
a physician-driven, luxury-niche cosmetics company with a value in the $100-$400 million range in
10-12 years. When I became Chairman of the Board of Directors of VIASPACE, my goal for VIASPACE was
to grow it into a global biomass, bioenergy and animal feed company with an ultimate value in the
$500 million range. I see synergy and security in a combined company dedicated to grow stronger,
faster and to create revenues, cash flow and shareholder value. Our combined product lines of
bioenergy and cosmetics are both global in reach.”
Elite Therapeutics CEO, Mr. Christopher Turner, commented, “I have worked for Elite Therapeutics
since 2009 and am a long-term VIASPACE shareholder. I fully support examining the overall potential
of combining these two companies. We use plastic containers for nearly all our products and I could
see having a plastic container manufacturing site powered by Giant King Grass generated electricity
and creating plastic containers derived from GKG plant-based plastics. I spend nearly half my time
in California and am willing to assist Dr. Kukkonen in responding to potential new VIASPACE clients
as we seek to grow a combined company. I see many possible financial and business outreach
advantages to both companies if they chose to combine forces.”
Dr. Schewe continued, “I now look at both VIASPACE and Elite Therapeutics as an eventual ‘exit
strategy’ from my daily, clinical practice of radiation oncology. I am now 58 years old and I look
forward in the future to joining the combined company full-time. Dr. Kukkonen is 69 years old.
There needs to be a succession plan in place for Dr. Kukkonen’s eventual retirement. Dr. Kukkonen
and I recently met to discuss this topic in detail and our timelines coincide very nicely. I
believe that I am fully capable of leading a combined company when the time is right. There are no
imminent plans for a leadership change. Dr. Kukkonen will continue to serve as CEO and I will
continue to serve as Chairman of the Board for now, but we agree on the principles and timing of
a succession plan.”
VIASPACE CEO, Dr. Carl Kukkonen, added, “Dr. Schewe’s business and financial leadership has been
crucial for VIASPACE. He is as committed as I am to making our Giant King Grass bioenergy and
animal feed business lines a resounding, global success. I believe that our power plant project in
Nicaragua will soon set us on a course for unprecedented success in green, renewable electricity
production. We want to reward our long-term shareholders for staying with us and we want to
significantly enlarge our overall shareholder base. I believe it will be worthwhile to examine and
explore how a combined company would help us to accomplish all our goals expeditiously.”
Dr. Schewe concluded, “The goal here is to significantly increase VIASPACE’s revenues by succeeding
in two, large growth industries. There is a lot of meaning in a company name. Elite Therapeutics
strives to produce and sell the ‘best of the best’ in luxury and medical-grade cosmetics. I
encourage all interested investors to explore the Elite Therapeutics website
(www.elitetherapeutics.com) and read the product press reviews and client testimonials. I
also love the name of our company ‘VIASPACE’. While we have our feet solidly on the ground in
‘growing our electricity’ with Giant King Grass, we are ‘reaching for the stars’ in the green,
renewable biomass, bioenergy and animal feed industries. We will carefully and deliberately examine
all the potential benefits of VIASPACE acquiring Elite Therapeutics with the overarching, singular
focus to grow the value of our company and reward all of our shareholders in return.”
About VIASPACE Inc.
VIASPACE grows renewable Giant KingTM Grass as a low-carbon fuel for clean electricity
generation; for environmentally friendly energy pellets; and as a feedstock for bio-methane
production and for green cellulosic biofuels, biochemicals and biomaterials. Giant King Grass is a
proprietary, high yield, dedicated biomass energy crop. Giant King Grass when it is cut frequently
at 4 to 9 feet tall is also excellent animal feed. The USDA granted approval for planting Giant
King Grass throughout the US and cooperates in exporting by performing the required inspections and
issuing the phytosanitary certificate needed for import into foreign countries. Giant King Grass is
being grown in California, Hawaii, St. Croix Virgin Islands, Nicaragua, South Africa, China,
Myanmar, Pakistan, Guyana, Jamaica and Philippines. For more information, please go to
www.VIASPACE.com or contact Dr. Jan Vandersande, Director of Communications, at
800-517-8050 or IR@VIASPACE.com.
Safe Harbor Statement
Information in this news release includes forward-looking statements. These forward-looking
statements relate to future events or future performance and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from those expressed or implied by these forward-looking
statements. Such factors include, without limitation, risks that the Elite Therapeutics acquisition
may never occur, or that even if consummated, the acquisition would not have the synergistic or
other benefits mentioned in this press release. Such factors also include, without limitation,
risks outlined in our periodic filings with the U.S. Securities and Exchange Commission, including
the Annual Report on Form 10-K for the year ended December 31, 2013 and quarterly and current
reports filed since such Annual Report, and other factors over which VIASPACE has little or no
control.
Ex. 99.2
VIASPACE, INC.
382 N. Lemon Ave., Suite 364
Walnut, CA 91789
December 1, 2014
Kevin L. Schewe, MD, FACRO
President
Bad Love Cosmetics Company, LLC
5195 Marshall Street
Arvada, Colorado 80002
RE: Elite Therapeutics
Dear Kevin:
VIASPACE, Inc. (“VIASPACE” or the “Purchaser”) is pleased to submit this Letter of Intent
(“LOI”) regarding the acquisition (the “Transaction”) of 100% of the outstanding membership
interests of Bad Love Cosmetics Company, LLC DBA Elite Therapeutics (“Elite” or the “Company”).
The Purchaser will pay a total consideration to be negotiated and discussed by the parties
(the “Purchase Price”) made payable in newly-issued shares of VIASPACE common stock, valued at the
average trading price during the 12 months prior to execution of the Definitive Agreement (as
defined below), subject to adjustments as set forth in this Letter of Intent, the satisfactory
completion of due diligence and to the terms and conditions of a definitive agreement (“Definitive
Agreement”). This Letter of Intent will serve to outline the mutual intentions and obligations of
the Purchaser and the Company and its major shareholders (collectively the “Sellers”) prior to
execution and delivery of the Definitive Agreement.
Except for Section 4 (which is intended to be legally binding), this Letter of Intent is a
statement of mutual intention and not legally binding and does not constitute a binding contractual
commitment with respect to any Transaction
The Transaction would entail the acquisition by stock purchase, merger, recapitalization or
other means of 100% of the outstanding membership interests of the Company on a debt free, cash
free basis; free and clear of any liens, claims or other encumbrances and as detailed in the
portion of this letter detailing the requisite closing conditions. The exact structure of the
Transaction will be determined after an analysis of tax and other considerations.
The Purchaser is prepared, subject to satisfactory completion of due diligence, to purchase
100% of the outstanding membership interests of the Company with shares of VIASPACE, Inc. Common
Stock. The exact number of shares shall be determined by the parties at a later time following
review of the due diligence by each party.
The parties to this Letter of Intent will endeavor to finalize a Definitive Agreement defining
the Transaction with such provisions as may be mutually agreed upon within one hundred and twenty
(120) days of the execution of this Letter of Intent. The Purchaser believes that a simultaneous
signing and closing is the most efficient manner in which to close the Transaction.
Prior to the execution of the Definitive Agreement and Closing, the following conditions shall be
satisfied:
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Satisfactory completion of financial, operational and legal due diligence by
the Purchaser. |
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b) |
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Securing of a satisfactory transition agreement with the Company’s current
President including a one (1) year employment agreement. |
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Execution of acceptable employment agreements with key members of the Company’s
current management team. |
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The Company and Sellers shall have complied with customary pre-closing
covenants including the operation of the Company only in the ordinary course. |
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There shall have been no material adverse change in the business, assets,
operations or prospects of the Company since the last balance sheet, relative to the
state of the Company as of the date of this Letter of Intent. The Sellers shall notify
the Purchaser of any such material changes. |
The Definitive Agreement will contain the following basic terms, without limitation:
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a) |
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Representations and Warranties |
The Purchaser requires that the Sellers provide customary representations and warranties,
including corporate existence; corporate authority; governmental approvals and consents; financial
statements; absence of liabilities; real and personal properties; accounts receivable; accounts and
notes payable; warranties of products; product liability; inventory; customers and suppliers;
contracts; litigation; agencies; intellectual property rights; insurance; tax matters; labor,
employment and benefits; contracts; compliance with laws and regulations; affiliate transactions;
certain practices; finders, brokers; environmental and safety matters; and full disclosure.
The Sellers shall indemnify the Purchaser against any excluded liabilities or breach of
representations or warranties.
Closing of the Transaction is targeted to close within one hundred and twenty (120) days of
the signing of this Letter of Intent. The Closing may not occur after one hundred and twenty (120)
days from the signing of this Letter of Intent (the “Expiration Date”) without the mutual consent
of the Purchaser and the Sellers.
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Binding Terms of this Letter of Intent |
To the extent reasonably required for the purpose of the Letter of Intent, and subject to the
provisions of, and Purchaser’s compliance any Confidentiality Agreement previously executed, each
party will cause the other party, its counsel, accountants, certain insurance brokers, lenders, and
all other reasonable representatives of the other party (“Representatives”) to have access, during
normal business hours, prior to the Expiration Date, to all of the properties, books, contracts,
and records of the first party, and will cause to be furnished to the other party and its
Representatives all such information concerning the affairs of the first party or such
Representatives may reasonably request. Each of the Representatives shall be bound by the
Confidentiality Agreement between Purchaser and the Company.
At all reasonable times during normal business hours, each party, and its Representatives
shall have access, prior to the Expiration Date, to discuss the affairs of the other party with the
management of the other party and with the designated advisors.
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Operation of Business in Ordinary Course |
The Sellers (i) shall operate the Company only in the ordinary course of business consistent
with past practice, to retain the goodwill of the Company’s suppliers, customers, distributors, and
employees and to maintain its property in good repair, order and condition; (ii) except in ordinary
course of business, will not enter into any material contract or materially amend any material
contract with respect to the Company or make any material increase in the compensation arrangements
for any of the Company’s officers or employees; and (iii) will maintain the Company’s books,
accounts and records in the usual, regular and ordinary manner and on a basis consistent with past
practices.
This letter may be executed in one or more counterparts which when taken together shall
constitute but a single instrument.
No party will make any disclosure of the existence of this Letter of Intent or any terms of
this Letter of Intent without the consent of the other party, unless required by law.
This Letter of Intent is intended to be a statement of the mutual interest of the parties with
respect to a possible Transaction and is subject to execution and delivery of a mutually
satisfactory Definitive Agreement. Nothing herein shall constitute a binding commitment of either
party except for the agreements in this Section 4. The parties will become legally obligated with
respect to the Transaction (other than this Section 4) only in accordance with the terms contained
in the Definitive Agreement relating thereto if, as and when such document has been executed and
delivered by the parties. Each party agrees that this letter shall be governed by the laws of the
State of California, without giving effect to conflicts of laws principles.
Each party agrees to pay its own expenses in conjunction with this Agreement.
To indicate your acceptance to this Letter of Intent please sign and date below, and return signed
copy to above contact prior to 5:00 pm Pacific Time, November 26, 2014.
Sincerely,
By: /S/ CARL KUKKONEN
Dr. Carl Kukkonen
CEO
VIASPACE, Inc.
Accepted this 26 day of November, 2014
By: /S/ KEVIN L. SCHEWE—Kevin L. Schewe, MD, FACRO
as President and major Shareholder of
Bad Love Cosmetics Company, LLC
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