The accompanying notes are an integral part
of these financial statements.
The accompanying notes are an integral part
of these financial statements.
The accompanying notes are an integral part
of these financial statements.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
–
VIASPACE Inc. (“we”, “us”, “VIASPACE”, or the “Company”) was founded in July 1998.
Its business involves renewable energy and is based on biomass, in particular our license to a dedicated energy crop with the trademark
“Giant King
®
Grass” (“GKG”). Through a license for GKG we obtained from Guangzhou Inter-Pacific
Arts Corp., a Chinese wholly-owned foreign enterprise registered in Guangdong province ("IPA China") which is owned by
VIASPACE Green Energy Inc. (“VGE”), we are able to commercialize GKG throughout the world, except for the People’s
Republic of China (“China”) and the Republic of China (“Taiwan”).
GKG can be burned in 100% biomass power plants
to generate electricity; made into pellets that can be burned together with coal to reduce carbon emissions from existing power
plants; generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation,
biochemicals and bio plastics. Cellulosic ethanol, bio butanol and other liquid cellulosic biofuels, do not use corn or other food
sources as feedstock. GKG can also be used as animal feed. GKG and other plants absorb and store carbon dioxide from the atmosphere
as they grow. When they are burned, they release the carbon dioxide back into the atmosphere, but it is the same carbon dioxide
that was removed from the atmosphere, and so this process is carbon neutral. Small amounts of fossil fuel are used by the farm
equipment, transportation of GKG and fertilizer, so that the overall process of growing and burning GKG probably has some net carbon
dioxide emissions, but much lower emissions than burning coal or other fossil fuels directly to create the same amount of energy.
GKG has been independently tested by customers and been shown to have excellent energy content, high bio methane production, and
the cellulosic sugar content needed for biofuels and biochemicals.
Going Concern –
The Company
has incurred significant losses from operations, resulting in an accumulated deficit of $54,243,000. The Company expects such losses
to continue. However, on November 30, 2016, the Company entered in a Loan Agreement with Vice Chairman Haris Basit whereby he agreed
to fund the Company $100,000 over a two-year period. In addition, on February 23, 2017, the Company entered in a Loan Agreement
with CEO Kevin Schewe whereby he agreed to fund the Company $100,000 over a two-year period. In addition, on July 25, 2017, the
Company entered in a Loan Agreement with CTO Carl Kukkonen whereby he agreed to fund the Company $25,000 over a two-year period.
The Company expects loans from Mr. Basit, Dr. Schewe and Dr. Kukkonen and revenue generated from future contracts using the license
it has for Giant King Grass to fund operations for the foreseeable future. However, no assurance can be given that Mr. Basit, Dr.
Schewe or Dr. Kukkonen will continue to fund the Company or that sales contracts will be obtained in the future, or if they are
obtained, that they will be profitable. Accordingly, there continues to be substantial doubt as to the Company’s ability
to continue as a going concern. The financial statements do not include any other adjustments that might result from the outcome
of these uncertainties.
Basis of Presentation –
The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting
of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained
therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company
for the year ended December 31, 2016 and notes thereto included in the Company's annual report on Form 10-K. The Company follows
the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods
are not indicative of annual results.
Recent Accounting Standards
–
In May 2014, the FASB issued guidance regarding the accounting for revenue from contracts with customers. In April
2016, May 2016 and December 2016, the FASB issued additional guidance, addressed implementation issues and provided technical corrections.
The guidance may be applied retrospectively or using a modified retrospective approach to adjust retained earnings (deficit). The
guidance is effective for interim and annual periods beginning after December 15, 2017. We are currently evaluating the impact
of this guidance on our financial statements.
In August 2014, the FASB issued Accounting
Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties
about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management's responsibility
to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern as well as required disclosures.
ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should
evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going
concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include
consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are
issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt
will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective
for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted.
The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.
NOTE 2 – PREPAID EXPENSES
The Company has entered into agreements with
certain of its consultants and vendors whereby the Company issued unregistered shares of common stock in exchange for services
to be provided to the Company. The Company has engaged a third-party provider to pay certain expenses of the Company on behalf
of the Company. As compensation for the payment of these expenses on behalf of the Company, the Company pays the provider in shares
of common stock equivalent to the expense paid plus a fee equal to 15% of the expense paid. During 2017, the third-party provider
cleared 50,000,000 shares of the Company’s common stock for future services valued at $75,000. As of September 30, 2017 and
December 31, 2016, included in prepaid expenses for this third-party provider is $38,000 and $13,000, respectively, for shares
of stock issued to the provider in excess of amounts paid on the Company’s behalf.
Other prepaid expenses (non-stock related)
were $0 and $1,000 at September 30, 2017 and December 31, 2016, respectively.
Note 3 – Investment
in Almaden Energy Group
The investment in Almaden Energy Group, LLC
(“AEG”) represents an 18.75% interest in that company’s outstanding membership interest units which became effective
April 15, 2015. The Company originally accounted for this investment by the cost method because the membership interest units of
AEG are unlisted and the criteria for using the equity method of accounting are not satisfied as the Company is not able to exercise
significant influence over AEG. However, upon the Company hiring the CEO of AEG as its CEO in July 2015, the Company changed the
method of its investment in AEG to the equity method. Dividends are recognized in income when declared and totaled $0 for 2017
and 2016. The carrying value of the investment is $6,000 and $14,000 as of September 30, 2017 and December 31, 2016, respectively.
We recorded other expense of approximately $8,000 in the Company’s Statements of Operation during the nine months ended September
30, 2017, related to a loss on investment in AEG. See Note 8 for additional related party transactions with AEG.
NOTE 4 – STOCK OPTIONS AND ISSUED
STOCK
The fair value of each stock option granted
is estimated on the date of the grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model has
assumptions for risk free interest rates, dividends, stock volatility and expected life of an option grant. The risk free interest
rate is based upon market yields for United States Treasury debt securities at a maturity near the term remaining on the option.
Dividend rates are based on the Company’s dividend history. The stock volatility factor is based on the historical volatility
of the Company’s stock price. The expected life of an option grant is based on management’s estimate as no options
have been exercised in the Plan to date. The Company calculated a forfeiture rate for employees and directors based on historical
information. A forfeiture rate of 0% is used for options granted to consultants. The fair value of each option grant to employees,
directors and consultants is calculated by the Black-Scholes method and is recognized as compensation expense on a straight-line
basis over the vesting period of each stock option award. The risk-free interest rate for the period within the contractual life
of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.
|
|
2017
|
|
Dividends
|
|
|
0%
|
|
Volatility factor
|
|
|
140.17%-140.25%
|
|
Expected life
|
|
|
8.53 years
|
|
Annual forfeiture rate
|
|
|
0%
|
|
|
|
|
|
|
The following is a summary of the Company’s stock option activity
for the nine months ended at September 30, 2017:
|
|
Number of
Shares
|
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
|
Weighted-
Average
Remaining
Contractual
Term In Years
|
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding at December 31, 2016
|
|
|
380,730,000
|
|
|
$
|
0.0028
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
68,750,000
|
|
|
|
0.0016
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
Cancelled and forfeited
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2017
|
|
|
449,480,000
|
|
|
$
|
0.0026
|
|
|
|
8.53
|
|
|
$
|
–
|
|
Exercisable at September 30, 2017
|
|
|
418,855,000
|
|
|
$
|
0.0027
|
|
|
|
8.48
|
|
|
$
|
–
|
|
Stock options totaling 68,750,000 were granted
during the nine months ended September 30, 2017. The Plan recorded $317,000 of compensation expense for employees and director
stock options in 2017. At September 30, 2017, there was $49,000 of unrecognized compensation costs related to non-vested share-based
compensation arrangements under the Plan that is expected to be recognized over a weighted average period of approximately nine
months. There were no options exercised during the nine months ended September 30, 2017.
NOTE 5 – CONVERTIBLE NOTES PAYABLE
TO RELATED PARTIES
Loan Agreement with Haris Basit
Effective November 30, 2016, the Company entered
into a Loan Agreement with Director Haris Basit whereby Mr. Basit agreed to loan up to $100,000 to the Company over a two-year
period based on requests from the Company. Each individual loan will accrue interest at 8% per annum. Each note would mature on
the first anniversary of the issuance date of such note. Each note is convertible at Mr. Basit’s request, into a fixed number
of shares of the Company’s common stock based on the closing price of the Company’s common stock for the twenty trading
days prior to the issuance of the loan, less an 80% discount. The Loan Agreement states that Mr. Basit will not convert any loan
into a number of shares that would exceed the number of available authorized common shares calculated as of the date of the conversion.
As a result, the conversion feature is not deemed to be a derivative instrument subject to bifurcation.
During the nine months ended September 30,
2017, Mr. Basit made loans of $47,500 to the Company. The Company recorded a discount on the loans of $47,500 as a result of a
beneficial conversion feature, which will be amortized over the term of the note on a straight-line basis, which approximates the
effective interest method. During 2017, Mr. Basit converted loans totaling $47,500 into 140,958,681 common shares of the Company.
At the time of the conversions, the company recorded the discount as additional interest expense. There are $0 loans outstanding
at September 30, 2017. As of September 30, 2017, the Company had remaining availability under the note of $27,500.
Loan Agreement with Kevin Schewe
Effective February 23, 2017, the Company entered
into a Loan Agreement with CEO Kevin Schewe whereby Dr. Schewe agreed to loan up to $100,000 to the Company over a two-year period
based on requests from the Company. Each individual loan will accrue interest at 8% per annum. Each note would mature on the first
anniversary of the issuance date of such note. Each note is convertible at Dr. Schewe’s request, into a fixed number of shares
of the Company’s common stock based on the closing price of the Company’s common stock for the twenty trading days
prior to the issuance of the loan, less an 80% discount. The Loan Agreement states that Dr. Schewe will not convert any loan into
a number of shares that would exceed the number of available authorized common shares calculated as of the date of the conversion.
As a result, the conversion feature is not deemed to be a derivative instrument subject to bifurcation.
During the nine months ended September 30,
2017, Dr. Schewe made loans of $80,000 to the Company. The Company recorded a discount on the loans of $80,000 as a result of a
beneficial conversion feature, which will be amortized over the term of the note on a straight-line basis, which approximates the
effective interest method. During 2017, Dr. Schewe converted loans totaling $80,000 into 242,278,404 common shares of the Company.
At the time of the conversions, the company recorded the discount as additional interest expense. There are $0 loans outstanding
at September 30, 2017. As of September 30, 2017, the Company had remaining availability under the note of $20,000.
Loan Agreement with Carl Kukkonen
Effective July 25, 2017, the Company entered
into a Loan Agreement with CTO Carl Kukkonen whereby Dr. Kukkonen agreed to loan up to $25,000 to the Company over a two-year period
based on requests from the Company. Each individual loan will accrue interest at 8% per annum. Each note would mature on the first
anniversary of the issuance date of such note. Each note is convertible at Dr. Kukkonen’s request, into a fixed number of
shares of the Company’s common stock based on the closing price of the Company’s common stock for the twenty trading
days prior to the issuance of the loan, less an 80% discount. The Loan Agreement states that Dr. Kukkonen will not convert any
loan into a number of shares that would exceed the number of available authorized common shares calculated as of the date of the
conversion. As a result, the conversion feature is not deemed to be a derivative instrument subject to bifurcation.
During the nine months ended September 30,
2017, Dr. Kukkonen made loans of $11,500 to the Company. The Company recorded a discount on the loans of $11,500 as a result of
a beneficial conversion feature, which will be amortized over the term of the note on a straight-line basis, which approximates
the effective interest method. During 2017, Dr. Kukkonen converted loans totaling $11,500 into 41,218,638 common shares of the
Company. At the time of the conversions, the company recorded the discount as additional interest expense. There are $0 loans outstanding
at September 30, 2017. As of September 30, 2017, the Company had remaining availability under the note of $13,500.
NOTE 6 – STOCKHOLDERS’ EQUITY
Preferred Stock
At September 30, 2017 and December 31, 2016,
the number of authorized shares of the Company’s preferred stock was 10,000,000. The par value of the preferred stock is
$0.0001.
At September 30, 2017 and December 31, 2016,
there is one share of Series A Preferred Stock outstanding.
Common Stock
As of January 1, 2017, the number of authorized
shares of the Company’s common stock was 3,900,000,000. The par value of the common stock is $0.0001.
During 2017, the Company issued 50,000,000
unregistered restricted shares of common stock respectively to a funding source so that the funding source can pay for future expenses
on behalf of the Company. The shares are issued to the funding source to cover the amount of future expenses plus a fee of 15%
of such future expenses. At the time of the future payment of the expenses incurred by the Company, the common stock and additional
paid in capital are credited for the amount of the future payment plus 15%. During the period ending September 30, 2017, there
is no accounting impact from this transaction because the shares remain in the Company's possession.
On January 9, 2017, the Company entered into
Subscription Agreement with a non-related party to purchase 5,586,592 shares of common stock at a purchase price of $0.000895 per
share for $5,000. The purchase price per share was equal to 50% of the average closing price of the Company's common stock for
the 20 trading days immediately preceding the date of the investment. The Company issued such common stock on the date of such
Subscription Agreement.
During 2017, the Company issued 1,080,000 shares
of common stock to a consultant of the Company. The shares were issued at fair market value of approximately $1,920 on the date
of the issuance.
During 2017, the Company issued 242,278,404
shares of common stock to CEO Kevin Schewe as he converted loans into shares of common stock as allowed under an agreement he has
with the Company as discussed in Note 5. During 2017, the Company issued 140,958,681 shares of common stock to Director Haris Basit
as he converted loans into shares of common stock as allowed under an agreement he has with the Company as discussed in Note 5.
During 2017, the Company issued 41,218,638 shares of common stock to CTO Carl Kukkonen as he converted loans into shares of common
stock as allowed under an agreement he has with the Company as discussed in Note 5.
As of September 30, 2017, there were 3,300,594,447
shares of common stock outstanding.
NOTE 7 – NET LOSS PER SHARE
The Company computes net loss per share in
accordance with FASB ASC Topic 260. Under its provisions, basic loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the periods presented. Diluted earnings would customarily include,
if dilutive, potential shares of common stock issuable upon the exercise of stock options and warrants. The dilutive effect of
outstanding stock options and warrants is reflected in earnings per share in accordance with FASB ASC Topic 260 by application
of the treasury stock method. For the periods presented, the computation of diluted loss per share equaled basic loss per share
as the inclusion of any dilutive instruments would have had an antidilutive effect on the earnings per share calculation in the
periods presented.
The following table sets forth common stock
equivalents (potential common stock) at September 30, 2017 and 2016 that are not included in the loss per share calculation since
their effect would be anti-dilutive for the periods indicated:
|
|
2017
|
|
|
2016
|
|
Stock Options
|
|
|
418,855,000
|
|
|
|
239,480,000
|
|
The following table sets forth the computation
of basic and diluted net loss per share for 2017 and 2016, respectively:
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stock
|
|
$
|
(294,000
|
)
|
|
$
|
(285,000
|
)
|
|
$
|
(796,000
|
)
|
|
$
|
(1,019,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock outstanding
|
|
|
3,237,284,099
|
|
|
|
2,509,093,098
|
|
|
|
3,051,228,069
|
|
|
|
2,310,258,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share of common stock, basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
NOTE 8 – RELATED PARTY TRANSACTIONS
Included in the Company’s balance sheets
at September 30, 2017 and December 31, 2016 are Related Party Payables of $749,000 and $640,000, respectively. The Company has
a payable of $689,000 and $640,000, at September 30, 2017 and December 31, 2016 owed to Dr. Carl Kukkonen, CTO. Of the amount owed
to Dr. Kukkonen, there is a cash component totaling $185,000 and a common stock component totaling $504,000. Dr. Kukkonen deferred
a portion of his 2009, 2010 and 2011 stock awards and is entitled to the following unregistered shares of Company common stock
at September 30, 2017: 11,195,707 shares for deferred 2009 compensation; 8,467,939 shares for deferred 2010 compensation; and 24,730,678
shares for deferred 2011 compensation. The Company also owes Director Haris Basit $60,000 at September 30, 2017, representing salary
earned but not paid. Mr. Basit has also been granted 56,250,000 options at September 30, 2017
The Company has a loan agreement with CEO Dr. Kevin Schewe, Director
Haris Basit and CTO Carl Kukkonen which is described in Note 5.
On April 13, 2015, the Company entered into
a Giant King Grass supply contract with Almaden Energy Group, LLC. (“AEG”). AEG is developing an animal feed project
in the United States for the domestic and global market. The Company granted AEG a license to grow Giant King Grass only for animal
feed, nursery and research purposes anywhere within the 48 contiguous United States. AEG is permitted to sell Giant King Grass
anywhere in the world with the exception of the State of Hawaii. The CEO of AEG is also the former CEO and current member of the
Board of Directors of the Company. For the nine months ended September 30, 2017 and 2016, the Company recorded $0 and $12,000,
respectively, in revenues from AEG. At September 30, 2017, the Company has an 18.75% equity ownership in AEG and one designated
board seat provided that the Company maintains an equity ownership position greater than 5%. At September 30, 2017, the Company
recorded $6,000 as an Investment in AEG on its Balance Sheet under equity method of accounting (see Note 3).
On June 1, 2017, the Company acquired a 2.91%
interest in Clean Energy Solutions, LLC’s (“CES”) outstanding membership interest units. The Company has accounted
for this investment by the cost method because the membership interest units of that company are unlisted and the criteria for
using the equity method of accounting are not satisfied as the Company is not able to exercise significant influence over CES.
CES is a customer of the Company who is in discussion for future GKG contracts. At September 30, 2017, the Company’s interest
in CES is recorded at $0.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Leases
The Company currently has no long term office
lease. The Company leases land in San Diego County, California where it grows Giant King Grass. Rent and utility expense charged
to operations for the three months ended September 30, 2017 and 2016, was $4,000 and $7,000, respectively. Rent and utility expense
charged to operations for the nine months ended September 30, 2017 and 2016 was $9,000 and $13,000, respectively.
On August 31, 2017, the Company notified the
landlord of the land being leased in San Diego to cancel the lease.
Collaborative Agreements
We are a party to certain collaborative agreements
with various entities for the joint operation of test plots to establish that GKG grows well in the area and optimal agronomic
practices are developed. These agreements are in the form of development collaborations and licensing agreements. Under these agreements,
we have granted rights to grow and use of GKG. In return, we are entitled to receive certain payments for the operations of the
test plots and license fees on the harvesting of GKG should it ultimately be commercialized.
All of our collaborative agreements are subject
to termination by either party, without significant financial penalty. Under the terms of these agreements, upon a termination
we are entitled to reacquire all rights in our technology at no cost and are free to re-license the technology to other collaborative
partners.
Revenue earned from collaborative agreements
is comprised of negotiated payments for the establishment, evaluation and operations of GKG test plots. Deferred revenue represents
customer payments received which are related to future performance. Generally, for collaborative agreements establishing test plots,
the Company recognizes revenue only after the Giant King Grass is planted in the customer’s location. Until that time any
money received is recorded as deferred revenue. During the three months ended September 30, 2017 and 2016, the Company received
$0 and $25,000, respectively, in payments under these collaborative agreements. During the nine months ended September 30, 2017
and 2016, the Company received $0 and $80,000, respectively, in payments under these collaborative agreements. The Company recognized
revenue from these collaborative agreements of $0 and $36,000 for the three months ended September 30, 2017 and 2016, respectively.
The Company recognized revenue from these collaborative agreements of $101,000 and $92,000 for the nine months ended September
30, 2017 and 2016, respectively.
Global Supply, License, and Commercialization
Agreement
Executed on April 4, 2016 and effective as
of March 28, 2016, the Company, VGE and Guangzhou Inter-Pacific Arts Corp., a Chinese wholly-owned foreign enterprise registered
in Guangdong province ("IPA") owned by VGE, entered into the Global Supply, License, and Commercialization Agreement
(the "New Agreement").
Prior to the New Agreement, IPA and VGE had
entered into a certain Supply and Commercialization Agreement dated September 30, 2012 regarding a license and supply arrangement
between IPA and VGE regarding Giant King Grass ("IPA-VGE Agreement"). In turn, VGE and the Company also entered into
a certain Supply and Commercialization Agreement dated September 30, 2012 regarding a license and supply arrangement between VGE
and the Company regarding Giant King Grass ("VGE-VIASPACE Agreement").
Under the New Agreement, VGE and the Company
terminated the VGE-VIASPACE Agreement and IPA directly granted the Company an exclusive, perpetual license to commercialize its
intellectual property rights to three (3) types of high yield, non-genetically modified grasses ("Three GK Grasses")
throughout the world except Cambodia, People’s Republic of China, Taiwan, Thailand, Myanmar, Malaysia, Laos, Vietnam and
Singapore ("VIASPACE Territory"). It and VGE agreed to subordinate the terms of the IPA-VGE Agreement to the terms of
the New Agreement. IPA also granted the right to use and market the name "Giant King Grass" and other related names.
The Company would owe royalty payments on the
Net Sales of the Three GK Grasses. This license would be sublicenseable in the VIASPACE Territory. IPA held all rights of ownership
to the Three GK Grasses. The Company would own any grasses resulting from any modifications or improvements to the Three GK Grasses.
IPA would use commercially reasonable efforts to maintain its intellectual property rights. The Company would use commercially
reasonable efforts to commercialize the Three GK Grasses throughout the VIASPACE Territory.
Employment Agreements
On July 25, 2017, the Company announced that
effective July 31, 2017, Haris Basit resigned as CEO of the Company to move to a position leading a Silicon Valley based technologycompany.
Mr. Basit became Vice-Chairman of the Company’s Board of Directors and thus continue to be involved in the overall strategic
direction of the Company. During this transition of leadership, Dr. Kevin Schewe, who is the largest shareholder of the Company
and Board Chairman, becomes the acting CEO.
Effective October 1, 2016, the Company entered
into one-year employment agreements with Carl Kukkonen and Stephen Muzi. Dr. Kukkonen serves as Chief Technology Officer of the
Company and Mr. Muzi serves as Chief Financial Officer, Treasurer and Secretary. Dr. Kukkonen will receive a salary of $84,000
per annum and Mr. Muzi would receive $64,000 per annum. Each of them would also be entitled to customary insurance and health
benefits, and reimbursement for out-of-pocket expenses in the course of his employment. Dr. Kukkonen is to receive 20 business
days paid leave per year and Mr. Muzi is to receive 10 business days paid leave. Additionally, Dr. Kukkonen will be awarded a
bonus of 10% of the gross revenue generated by the Company up to a maximum of $100,000. Mr. Muzi has since resigned as CFO, Treasurer
and Secretary effective as of September 30, 2017. Dr. Schewe is acting CFO.
Litigation
The Company is not party to any material legal
proceedings at the present time.
NOTE 10 – SUBSEQUENT EVENTS
On October 20, 2017,
the Company issued 1,920,000 shares of common stock to a consultant of the Company. The shares were issued at fair market
value of approximately $1,920 on the date of the issuance.