VIASPACE (VSPC) 10-Q 19 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 19, 2015
Document And Entity Information
Entity Registrant Name	VIASPACE Inc.
Entity Central Index Key	1,270,200
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,697,263,863
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and equivalents	$ 25,000	$ 13,000
Prepaid expenses	288,000	250,000
TOTAL CURRENT ASSETS	313,000	263,000
OTHER ASSETS:
Investment in Almaden Energy Group	84,000	0
Other assets	1,000	1,000
TOTAL OTHER ASSETS	85,000	1,000
TOTAL ASSETS	398,000	264,000
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	44,000	58,000
Accrued expenses	32,000	65,000
Unearned revenue	100,000	65,000
Related party payables	640,000	640,000
TOTAL CURRENT LIABILITIES	816,000	828,000
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, one share of Series A preferred stock issued and outstanding in 2015 and 2014, respectively	0	0
Common stock, $0.001 par value, 1,800,000,000 shares authorized, 1,659,339,307 and 1,562,431,607 shares issued and outstanding in 2015 and 2014, respectively	1,659,000	1,562,000
Additional paid in capital	48,686,000	48,115,000
Accumulated deficit	(50,763,000)	(50,241,000)
Total stockholders' deficit	(418,000)	(564,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 398,000	$ 264,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	1	1
Preferred stock, shares outstanding	1	1
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	1,800,000,000	1,800,000,000
Common stock, shares issued	1,659,339,307	1,562,431,607
Common stock, shares outstanding	1,659,339,307	1,562,431,607

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
REVENUES		$ 8,000	$ 46,000	$ 23,000	$ 70,000
COST OF REVENUES		12,000	12,000	19,000	20,000
GROSS PROFIT		(4,000)	34,000	4,000	50,000
OPERATING EXPENSES
Operations		31,000	21,000	41,000	31,000
Selling, general and administrative		251,000	159,000	428,000	351,000
Total operating expenses		282,000	180,000	469,000	382,000
LOSS FROM OPERATIONS		(286,000)	(146,000)	(465,000)	(332,000)
OTHER INCOME (EXPENSE)
Interest expense		(48,000)	(11,000)	(140,000)	(25,000)
Other income		84,000	0	84,000	0
Total other income (expense)		36,000	(11,000)	(56,000)	(25,000)
LOSS BEFORE INCOME TAXES		(250,000)	(157,000)	(521,000)	(357,000)
Income taxes		0
NET LOSS		$ (250,000)	$ (157,000)	$ (521,000)	$ (357,000)
LOSS PER SHARE OF COMMON STOCK - Basic and diluted	[1]	$ 0	$ 0	$ 0	$ 0
WEIGHTED AVERAGE SHARES OUTSTANDING - Basic and diluted		1,637,761,125	1,507,132,326	1,610,043,085	1,503,907,859
[1]	Less than $0.01 per common share

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (521,000)	$ (357,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock option compensation	92,000	25,000
Stock issued for consulting expenses	71,000	154,000
Amortization of debt discount	140,000	26,000
Gain on minority investment in Almaden Energy Group	(84,000)	0
(Increase) decrease in:
Prepaid expenses	54,000	40,000
Increase (decrease) in:
Accounts payable	(14,000)	33,000
Accrued expenses and other	9,000	4,000
Unearned revenue	35,000	32,000
Net cash used in operating activities	(218,000)	(43,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from related party	173,000	102,000
Investment to purchase stock	100,000	0
Payments made on financed insurance	(43,000)	(41,000)
Net cash provided by financing activities	230,000	61,000
NET INCREASE IN CASH AND CASH EQUIVALENTS	12,000	18,000
CASH AND CASH EQUIVALENTS, Beginning of period	13,000	6,000
CASH AND CASH EQUIVALENTS, End of period	25,000	24,000
Cash paid during the period for:
Interest	0	0
Income taxes	0	0
Supplemental Disclosure on Non-Cash Activities
Common stock issued for future services	161,000	120,000
Beneficial conversion feature	140,000
Loans converted to equity	$ 173,000	$ 102,000

1. SUMMARY OF SIGNIFICANT ACCOU

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Description of Business ® 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 – Basis of Presentation - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may materially differ from management’s estimates and assumptions. Reclassifications of prior year’s data have been made to conform to 2014 classifications. Such classifications had no effect on net loss reported in the statements of operations. Recent Accounting Standards - 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. Subsequent Events -

2. PREPAID EXPENSES

2. PREPAID EXPENSES	6 Months Ended
	Jun. 30, 2015
Prepaid Expense and Other Assets, Current [Abstract]
PREPAID EXPENSES	The Company has entered into agreements with certain of its consultants and vendors whereby the Company issued registered shares of its common stock under an existing registration statement on Form S-8 as well as 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. In 2015, the Company issued 20,000,000 unregistered shares of the Company’s common stock with a value of $161,000 in advance of the payments made by the provider. As of June 30, 2015 and December 31, 2014, included in prepaid expenses for this third party provider is $273,000 and $182,000, respectively, for shares of stock issued to the provider in excess of amounts paid on the Company’s behalf. For the three months ended June 30, 2015 and 2014, the Company recorded $52,000 and $70,000, respectively, of stock related expenses. For the six months ended June 30, 2015 and 2014, the Company recorded $71,000 and $154,000, respectively, of stock related expenses, net. Other prepaid expenses (non stock related) were $15,000 and $68,000 at June 30, 2015 and December 31, 2014, respectively.

3. INVESTMENT IN ALMADEN ENERGY

3. INVESTMENT IN ALMADEN ENERGY GROUP	6 Months Ended
	Jun. 30, 2015
Equity Method Investments and Joint Ventures [Abstract]
3. INVESTMENT IN ALMADEN ENERGY GROUP	The investment in Almaden Energy Group, LLC (“AEG”) represents an 18.75% interest in that company’s outstanding member units which became effective April 15, 2015. The Company accounts for this investment by the cost method because the member units of that company is unlisted and the criteria for using the equity method of accounting are not satisfied. Dividends are recognized in income when declared and totaled $0 for the three and six months ended June 30, 2015. The carrying value of the investment is $84,000 as of June 30, 2015. See Note 8 for additional related party transactions with AEG.

4. STOCK OPTIONS, WARRANTS AND

4. STOCK OPTIONS, WARRANTS AND ISSUED STOCK	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS, WARRANTS 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. During 2015, 7,072,000 stock options have been issued to Dr. Kukkonen, CTO, of the Company The following table summarizes activity for employees and directors in the Company’s Plan at June 30, 2015: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term In Years Aggregate Intrinsic Value Outstanding at December 31, 2014 97,408,000 $ 0.0120 Granted 7,072,000 0.0040 Exercised ― ― Forfeited ― ― Outstanding at June 30, 2015 104,480,000 $ 0.0115 6.61 $ 9,000 Exercisable at June 30, 2015 84,980,000 $ 0.0121 6.00 $ 9,000 Stock options totaling 7,072,000 were granted during 2015. The Plan recorded $92,000 of compensation expense for employees and director stock options in 2015. At June 30, 2015, there was $138,000 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 one year. At June 30, 2015, the fair value of options vested for employees and directors was $280,000. There were no options exercised during 2015. During 2015, the Company issued 248,152 unregistered shares of common stock to a consultant for services provided to the Company. These share issuances were recorded at $1,920 which is the fair market value determined by the price of the Company’s common stock trading on the OTC Markets on the date of grant.

5. SHORT-TERM AND LONG-TERM DEB

5. SHORT-TERM AND LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
SHORT-TERM AND LONG-TERM DEBT	Loan Agreement with Dr. Kevin Schewe Effective September 30, 2012, the Company entered into a Loan Agreement with Director Kevin Schewe whereby Dr. Schewe agreed to loan up to $1 million to the Company over a five-year period based on requests from the Company. The loans would be evidenced by a Secured Convertible Note. Each individual loan will accrue interest at 6% per annum and are secured by all assets of the Company. Each note would mature on the second 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 a 50% discount. In connection with the separation from VGE, Dr. Schewe was granted an irrevocable proxy that permits him to vote the Preferred Share, giving him the majority shareholder vote. As the controlling shareholder of the Company he has the ability to increase the number of authorized shares without additional shareholder approval. As such, if the outstanding balance on the loan was convertible into more shares than the Company has authorized, he has the ability to increase the authorized shares. As a result, the conversion feature is not deemed to be a derivative instrument subject to bifurcation. From January 1, 2015 through June 30, 2015, Dr. Schewe made loans of $173,000 to the Company. The Company recorded a discount on the loans of $140,000 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 2015, Dr. Schewe converted loans totaling $173,000 into 48,088,120 common shares of the Company. At the time of the conversions, the company recorded the discount as additional interest expense. As of June 30, 2015, the Company had remaining availability under the note of $220,000.

6. STOCKHOLDERS' EQUITY

6. STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2015
Equity [Abstract]
STOCKHOLDERS' EQUITY	During 2015, the Company issued 20,248,152 unregistered shares of common stock to employees, consultants and vendors for services provided or to be provided to the Company. These share issuances were recorded at $163,000 which is the fair market value determined by the price of the Company’s common stock trading on the OTC Markets on the date of grant. As of June 30, 2015, there were 1,659,339,307 shares of common stock outstanding. On April 14, 2015, the Company entered into separate Subscription Agreements with Mr. Haris Basit and Mr. Asad Cochinwala in which each party agreed to purchase 14,285,714 shares of common stock at a purchase price of $0.0035 per share for $50,000. 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 preceeding the date of the investment. The Company received $50,000 from Mr. Basit and $50,000 from Mr. Cochinwala on April 14, 2015. Mr. Basit became CEO and director of the Company on July 10, 2015. Mr Basit is also the CEO of Almaden Energy Group (“AEG”), a customer of the Company as discussed in Note 8. Mr. Cochinwala is CFO of AEG. The Company issued 48,088,120 shares of common stock to Director 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.

7. NET LOSS PER SHARE

7. NET LOSS PER SHARE	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
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 June 30, 2015 and 2014 that are not included in the loss per share calculation since their effect would be anti-dilutive for the periods indicated: June 30, 2015 June 30, 2014 Stock Options 104,480,000 73,408,000 The following table sets forth the computation of basic and diluted net loss per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Basic and diluted net loss per share: Numerator: Net loss attributable to common stock $ (250,000 ) $ (157,000 ) $ (521,000 ) $ (357,000 ) Denominator: Weighted average shares of common stock outstanding 1,637,761,125 1,507,132,326 1,610,043,085 1,503,907,859 Net loss per share of common stock, basic and diluted $ * $ * $ * $ * * Less than $0.01

8. RELATED PARTY TRANSACTIONS

8. RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	Included in the Company’s balance sheets at June 30, 2015 and December 31, 2014 are Related Party Payables. The Company has a payable of $640,000, at December 31, 2014 and December 31, 2013 owed to Dr. Carl Kukkonen. On July 10, 2015, Dr. Kukkonen’s title changed from CEO to Chief Technology Office (“CTO”) after the Company hired Mr. Haris Basit to be the CEO of the Company. Of the amount owed to Dr. Kukkonen, there is a cash component totaling $136,000 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 December 31, 2014: 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 has a loan agreement with Director Dr. Kevin Schewe which is described in Note 5. On December 18, 2013, the Company entered into a Representation in Pakistan and Giant King Grass supply contract with Winergy Pakistan Private Limited (“Winergy”), a company incorporated and existing under the laws of Pakistan. Mr. Khurram Irshad, a director of the Company, is a director and shareholder of Winergy. Winergy was also appointed the exclusive representative of the Company in Pakistan. Winergy is developing bioenergy and animal feed projects in Pakistan and seeking a biomass source. The Company's Giant King Grass will be supplied to Winergy and a propagation nursery and test plot is to be established in Pakistan. Winergy will operate and pay the expenses for a Giant King Grass propagation nursery and test plot in Pakistan. Winergy paid a one-time fee of $5,000 to the Company upon the signing of the contract. The Company expects to receive additional license fees in the future from Winergy when they are able to secure relationships with customers who will use the Company's Giant King Grass in their particular application. No revenues were received from Winergy in 2015. 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. AEG will provide funding to the Company in return for the Company providing seedlings and technical support and training to establish the initial 25 acres plantation in Imperial County, CA. This initial 25 acre test plantation has not been established yet. As part of the supply contract, the Company was issued 25% equity ownership in AEG and one designated board seat provided that the Company maintains an equity ownership position greater than 5%. As part of the Company’s agreement with director Khurram Irshad, the Company is required to issue 25% of its equity ownership interest in AEG to Mr. Irshad. After this transfer is completed, the Company will own 18.75% of AEG. The Company expects this transfer to Mr. Irshad to be completed in the third quarter of 2015. At June 30, 2015, the Company recorded $84,375 as an Investment in AEG on its Balance Sheet representing the fair value estimate of the Company’s minority interest in AEG. We also recorded other income in the Company’s Statement of Operations for this same amount. As discussed in Note 5, on April 14, 2015, two principals of AEG invested $100,000 to purchase unregistered shares of the Company’s common stock. One of these investors, Mr. Haris Basit, became CEO and director of the Company on July 10, 2015 and is also the CEO of AEG. The other investor was Asad Cochinwala who is CFO of AEG. In total, 28,571,428 common shares of the Company are owned by the founding partners of AEG, Mr. Basit and Mr. Cochinwala.

9. COMMITMENTS AND CONTINGENCIE

9. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
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 expense charged to operations for the three and six months ended June 30, 2014 was $4,000 and $6,000, respectively. Rent expense charged to operations for three and six months ended June 30, 2015 was $3,000 and $7,000, respectively. 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 and operations of the 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. Once the planting is complete, the collaborative agreement payments are amortized over a period of six and one-half months which represents the growing season of Giant King Grass. During the three and six months ended June 30, 2015, the Company received $58,000 and $58,000, respectively, in payments under these collaborative agreements. During the three and six months ended June 30, 2014, the Company received zero and $103,000, respectively, in payments under these collaborative agreements. The payments were deferred until the planting of the seedlings and then recorded as revenue through the date of the first harvest. The Company recognized revenue from these collaborative agreements of $8,000 and $46,000 for the three months ended June 30, 2015 and 2014, respectively. The Company recognized revenue from these collaborative agreements of $23,000 and $70,000 for the six months ended June 30, 2015 and 2014, respectively. License Agreement Effective as of September 30, 2012, VIASPACE and VGE entered into a Supply, License and Commercialization Agreement (“License Agreement”) pursuant to which VGE granted to VIASPACE a nontransferable, royalty-bearing exclusive license to commercialize Giant King Grass anywhere within the world other than China and Taiwan. Additionally, the License Agreement allows VIASPACE to use the Giant King Grass intellectual property and VIASPACE Green Energy trade name in connection with its efforts to commercialize Giant King Grass. The Company assigned no value to the sublicense due to uncertainties of future revenues. VIASPACE agreed that it would not during the term of the License Agreement and a three-year period thereafter, (i) manufacture, commercialize or otherwise engage in any research or development of a grass or any other product or material having similar or otherwise competitive properties to Giant King Grass. VGE agreed to provide VIASPACE with Giant King Grass seedlings that will be filled at an agreed upon price as set forth in the License Agreement. VIASPACE agreed to pay VGE for and during the Term a royalty of eight percent (8%) on net sales made in its territory. The initial term of the License Agreement is for two years (“Initial Term”). As a condition to the right to renew after the first two-year term for an additional two year term, VIASPACE needed to achieve the milestones in the first two year period: • One or more fully-executed, third party sales contracts for the sale of Giant King Grass shall have been entered into during the Initial Term, pursuant to which VIASPACE is to be paid an aggregate amount of at least $200,000 within that 24 consecutive monthly period; and two or more, third party growing locations of at least 10 hectares in total shall have been obtained and planted during the Initial Term. The Company has entered into various collaborative agreements with entities for the joint operation of test plots to satisfy these milestones. These milestones were achieved by the Company as of September 30, 2014 and the license was renewed for another two years. As a condition to the right to renew the First Renewal Term (for years five and six) of the License Agreement, the Company is to achieve during the First Renewal Term the following milestones by September 30, 2016 as a condition to any such renewal: · A total of least three or more (including the above) fully-executed, third party sales contracts for the sale of Giant King Grass shall have been entered into during the First Renewal Term, pursuant to which the Registrant is to be paid the aggregate amount of $400,000, with not less than $100,000 of the Initial Sales Milestone having been paid during the First Renewal Term and with the remaining unpaid balance of the Initial Sales Milestone being paid within six months of the Second Renewal Term (e.g., in the fifth year) and the Second Sales Milestone being paid in full within that 24 consecutive monthly period following the signing of any such third contract; and · A total of at least three or more (including the two above) growing locations of at least 30 hectares in total shall have been obtained and planted during the Second Renewal Term, which shall be subject to the reasonable satisfaction of VGE. Employment Agreements Effective October 1, 2014, the Company entered into one-year employment agreements with Dr. Carl Kukkonen and Mr. Stephen Muzi. On July 10, 2015, Dr. Kukkonen’s title changed from CEO to Chief Technology Office (“CTO”) after the Company hired Mr. Haris Basit to be the CEO of the Company. Mr. Muzi serves as Chief Financial Officer, Treasurer and Secretary. Dr. Kukkonen was to receive a salary of $169,744 per annum and Mr. Muzi would receive $63,654 per annum. Each of them would also be entitled to a bonus as determined by the Company’s Board of Directors, customary insurance and health benefits, and reimbursement for out-of-pocket expenses in the course of his employment. Additionally, Dr. Kukkonen is to receive 20 business days paid leave per year and Mr. Muzi is to receive 10 business days paid leave. On June 22, 2015, the Company and Dr. Kukkonen entered into an amendment to his employment agreement whereby his monthly salary for the remaining term of his employment agreement, from June 1, 2015 through September 30, 2015, will be based on an annual salary of $84,772 per annum instead of $169,744 per annum. Additionally, Dr. Kukkonen received $28,291 worth of stock options to be issued at fair market value. Litigation The Company is not party to any material legal proceedings at the present time.

10. SUBSEQUENT EVENTS

10. SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	On July 10, 2015, Dr. Carl Kukkonen changed from being CEO of the Company to Chief Technology Officer (CTO) of the Company. Dr. Kukkonen remained a director of the Company. Additionally, effective July 10, 2015, the Board of Directors appointed Mr. Haris Basit to serve as CEO and director. The Company also entered into two year employment agreement with Mr. Basit whereby he will receive $120,000 per annum and be entitled to a bonus as determined by the Company’s Board of Directors and reimbursement for out-of-pocket expenses in the course of his employment. Additionally, Mr. Basit is to receive 20 business days paid leave per year. On July 10, 2015, the Company agreed to issue Mr. Basit 25,000,000 stock options to be issued as of July 10, 2015 at fair market value based on the closing price of the Company’s common stock as traded on the OTC Market as of July 10, 2015. These stock options are vested immediately but otherwise shall be subject to the terms of the 2015 option plan. Additionally, the Company agreed to issue Mr. Basit 18,750,000 stock options to be issued every three months (quarterly) over the term of his employment agreement which runs from July 10, 2015 through July 9, 2017, with the first issuance on October 10, 2015, at fair market value based on the closing price of the Company’s common stock as traded on the OTC Market on the date of each grant. Stock options shall vest immediately upon each issuance and shall be otherwise subject to the terms of the 2015 option plan. In the case of a change of control of the Company, the issuance schedule shall be accelerated by one year. Stock options shall have an exercise term of ten years from date of issuance, not to exceed the expiration date of the 2015 option plan. On July 14, 2015, Kevin Schewe, advanced an additional $20,000 pursuant to the convertible loan agreement and immediately converted the $20,000 loan into 11,111,111 shares of Company common stock at a conversion price of $0.0018 per common share. On July 28, 2015, Kevin Schewe, advanced an additional $20,000 pursuant to the convertible loan agreement and immediately converted the $20,000 loan into 11,764,706 shares of Company common stock at a conversion price of $0.0017 per common share. On July 31, 2015, the Company entered into a Subscription Agreement with Mr. Lajpat Rai to purchase 14,705,882 shares of common stock at a purchase price of $0.0017 per share for $25,000. 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. On August 5, 2015, the Company amended the Corporation’s Articles of Incorporation to increase the authorized number of shares of capital stock from 1,810,000,000 to 3,910,000,000 and the authorized number of shares of common stock from 1,800,000,000 to 3,900,000,000. Additionally, on August 5, 2015, the Company established a 2015 Stock Incentive Plan reserving 800,000,000 shares of common stock for issuance.

1. SUMMARY OF SIGNIFICANT ACC16

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Description of Business	Description of Business ® 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	Going Concern –
Basis of Presentation	Basis of Presentation - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may materially differ from management’s estimates and assumptions. Reclassifications of prior year’s data have been made to conform to 2014 classifications. Such classifications had no effect on net loss reported in the statements of operations.
Recent Accounting Standards	Recent Accounting Standards - 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.
Subsequent Events	Subsequent Events -

4. STOCK OPTIONS, WARRANTS AN17

4. STOCK OPTIONS, WARRANTS AND ISSUED STOCKS (Tables)	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Option activity	Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term In Years Aggregate Intrinsic Value Outstanding at December 31, 2014 97,408,000 $ 0.0120 Granted 7,072,000 0.0040 Exercised ― ― Forfeited ― ― Outstanding at June 30, 2015 104,480,000 $ 0.0115 6.61 $ 9,000 Exercisable at June 30, 2015 84,980,000 $ 0.0121 6.00 $ 9,000

7. NET LOSS PER SHARE (Tables)

7. NET LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Common Stock Equivalents Not Included in Loss per Share	June 30, 2015 June 30, 2014 Stock Options 104,480,000 73,408,000
Computation of basic and diluted net loss per share	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Basic and diluted net loss per share: Numerator: Net loss attributable to common stock $ (250,000 ) $ (157,000 ) $ (521,000 ) $ (357,000 ) Denominator: Weighted average shares of common stock outstanding 1,637,761,125 1,507,132,326 1,610,043,085 1,503,907,859 Net loss per share of common stock, basic and diluted $ * $ * $ * $ * * Less than $0.01

2. PREPAID EXPENSES (Details Na

2. PREPAID EXPENSES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Prepaid expenses	$ 288,000		$ 288,000		$ 250,000
Stock compensation expenses	52,000	$ 70,000	71,000	$ 154,000
Prepaid Expenses | Share value in excess of amounts paid
Prepaid expenses	273,000		273,000		182,000
Prepaid Expenses | Non-stock related expenses
Prepaid expenses	$ 15,000		$ 15,000		$ 68,000

3. INVESTMENT IN ALMADEN ENER20

3. INVESTMENT IN ALMADEN ENERGY GROUP (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Investment	$ 84,000	$ 84,000	$ 0
Almaden Energy Group
Equity investment percentage	18.75%	18.75%
Dividends from equity investment	$ 0	$ 0
Investment	$ 84,000	$ 84,000

4. STOCK OPTIONS, WARRANTS AN21

4. STOCK OPTIONS, WARRANTS AND ISSUED STOCK (Details-Option activity) - Jun. 30, 2015 - USD ($)	Total
Number of Shares
Outstanding, beginning balance	97,408,000
Granted	7,072,000
Exercised	0
forfeited	0
Outstanding, ending balance	104,480,000
Exercisable, ending balance	84,980,000
Weighted Average Exercise Price Per Share
Outstanding, beginning balance	$ .0120
Weighted average exercise price, granted	.0040
Outstanding, ending balance	.0115
Exercisable, ending balance	$ .0121
Weighted Average Remaining Contractual Terms in Years
Outstanding, ending balance	6 years 7 months 10 days
Exercisable, ending balance	6 years
Aggregate Intrinsic Value
Outstanding, ending balance	$ 9,000
Exercisable, ending balance	$ 9,000

4. STOCK OPTIONS, WARRANTS AN22

4. STOCK OPTIONS, WARRANTS AND ISSUED STOCK (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Unrecognized compensation costs related to non-vested shares	$ 138,000
Weighted average period of unrecognized compensation costs	1 year
Fair value of options vested	$ 280,000
Options exercised	0
Stock compensation expense	$ 92,000	$ 25,000
Stock issued for services, shares	20,248,152
Stock issued for services, value	$ 163,000
Consultant
Stock issued for services, shares	248,152
Stock issued for services, value	$ 1,920

5. SHORT-TERM AND LONG-TERM D23

5. SHORT-TERM AND LONG-TERM DEBT (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Debt Disclosure [Abstract]
Loans from shareholder	$ 173,000	$ 102,000
Discount on loans from shareholder	$ 140,000
Loans converted into shares, shares issued	48,088,120
Amount remaining under the loan	$ 220,000

6. STOCKHOLDERS' EQUITY (Detail

6. STOCKHOLDERS' EQUITY (Details Narrative) - 6 months ended Jun. 30, 2015 - USD ($)	Total
Stock issued for services, shares	20,248,152
Stock issued for services, value	$ 163,000
Mr. Basit
Proceeds from subscription agreements	50,000
Mr. Cochinwala
Proceeds from subscription agreements	$ 50,000
Schewe
Stock issued for conversion of loans	48,088,120

7. NET LOSS PER SHARE (Details-

7. NET LOSS PER SHARE (Details-Equivalents) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Common stock equivalents excluded from EPS	104,480,000	73,408,000

7. NET LOSS PER SHARE (Detail26

7. NET LOSS PER SHARE (Details-EPS) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic and diluted net income (loss) per share:
Numerator : Net loss attributable to common stock		$ (250,000)	$ (157,000)	$ (521,000)	$ (357,000)
Denominator
Weighted average shares of common stock outstanding		1,637,761,125	1,507,132,326	1,610,043,085	1,503,907,859
Net loss per share of common stock, basic and diluted	[1]	$ 0	$ 0	$ 0	$ 0
[1]	Less than $0.01 per common share

8. RELATED PARTY TRANSACTIONS (

8. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Investment in AEG	$ 84,000	$ 0
Carl Kukkonen
Related party payables	$ 640,000	$ 640,000

9. COMMITMENTS AND CONTINGENC28

9. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
Rent Expense	$ 3,000		$ 7,000
Proceeds from collaborative agreements			0	$ 103,000
Revenue received from collaborative agreements	58,000	$ 0	58,000	103,000
Revenue recognized from collaborative agreements	$ 8,000	$ 46,000	$ 23,000	$ 70,000