x
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
|
For the quarterly period ended March 31, 2011
|
o
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the transition period from __________ to ___________
|
Nevada
|
76-0742386
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Page
|
||
Part I.
|
Financial Information
|
|
Item 1.
|
Financial Statements
|
|
Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010
|
3
|
|
Consolidated Statements of Operations For the Three Months Ended March 31, 2011 and 2010 (Unaudited) and Consolidated Statements of Comprehensive Loss For the Three Months Ended March 31, 2011 and 2010 (Unaudited)
|
4
|
|
Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2011 and 2010 (Unaudited)
|
5
|
|
Notes to Consolidated Financial Statements March 31, 2011 (Unaudited) and December 31, 2010
|
6
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
21
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
25
|
Item 4.
|
Controls and Procedures
|
25
|
Part II.
|
Other Information
|
|
Item 1.
|
Legal Proceedings
|
25
|
Item 1A.
|
Risk Factors
|
25
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
27
|
Item 3.
|
Defaults Upon Senior Securities
|
28
|
Item 4.
|
Submission of Matters to Vote of Security Holders
|
28
|
Item 5.
|
Other Information
|
28
|
Item 6.
|
Exhibits
|
28
|
Signatures
|
29
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
REVENUES
|
||||||||
Government contracts
|
$
|
48,000
|
$
|
170,000
|
||||
Framed artwork sales
|
534,000
|
757,000
|
||||||
Total revenues
|
582,000
|
927,000
|
||||||
COST OF REVENUES
|
461,000
|
676,000
|
||||||
GROSS PROFIT
|
121,000
|
251,000
|
||||||
OPERATING EXPENSES
|
||||||||
Operations
|
36,000
|
28,000
|
||||||
Selling, general and administrative
|
873,000
|
894,000
|
||||||
Total operating expenses
|
909,000
|
922,000
|
||||||
LOSS FROM OPERATIONS
|
(788,000
|
)
|
(671,000
|
)
|
||||
OTHER INCOME (EXPENSE)
|
||||||||
Interest expense
|
(79,000
|
)
|
(72,000
|
)
|
||||
Other income
|
20,000
|
123,000
|
||||||
Other expense
|
(1,000
|
)
|
―
|
|||||
Gain on sale of marketable securities
|
6,000
|
―
|
||||||
Total other income (expense)
|
(54,000
|
)
|
51,000
|
|||||
LOSS INCLUDING NONCONTROLLING INTERESTS
|
(842,000
|
)
|
(620,000
|
)
|
||||
Noncontrolling interests
|
80,000
|
(10,000
|
)
|
|||||
NET LOSS ATTRIBUTED TO VIASPACE
|
(762,000
|
)
|
(630,000
|
)
|
||||
Foreign currency translation loss
|
(5,000
|
)
|
―
|
|||||
COMPREHENSIVE LOSS
|
$
|
(767,000
|
)
|
$
|
(630,000
|
)
|
||
LOSS PER SHARE OF COMMON STOCK INCLUDING NONCONTROLLING
INTERESTS — Basic and diluted
|
$
|
*
|
$
|
*
|
||||
Discontinued operations
|
*
|
*
|
||||||
Noncontrolling interests
|
*
|
*
|
||||||
NET LOSS PER SHARE OF COMMON STOCK ATTRIBUTED TO VIASPACE
SHAREHOLDERS — Basic and diluted
|
$
|
*
|
$
|
*
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING—Basic and diluted
|
1,255,735,431
|
913,326,255
|
Three Months Ended
March 31,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss including noncontrolling interests
|
$
|
(842,000
|
)
|
$
|
(620,000
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
22,000
|
20,000
|
||||||
Amortization of intangible assets
|
21,000
|
21,000
|
||||||
Stock option compensation expense
|
170,000
|
123,000
|
||||||
Stock compensation expense related to stock issued
|
249,000
|
166,000
|
||||||
Operating expenses paid in stock issued
|
46,000
|
229,000
|
||||||
Gain on disposal of vehicle
|
―
|
(15,000
|
)
|
|||||
(Increase) decrease in:
|
||||||||
Accounts receivable
|
140,000
|
(71,000
|
)
|
|||||
Inventory
|
(301,000
|
)
|
58,000
|
|||||
Prepaid expenses and other current assets
|
29,000
|
(43,000
|
)
|
|||||
Increase (decrease) in:
|
||||||||
Accounts payable
|
244,000
|
17,000
|
||||||
Accrued expenses and other
|
2,000
|
66,000
|
||||||
Related party payable
|
142,000
|
(292,000
|
)
|
|||||
Net cash used in operating activities
|
(78,000
|
)
|
(341,000
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Additions to fixed assets
|
(22,000
|
)
|
(122,000
|
)
|
||||
Proceeds from disposal of vehicle
|
―
|
17,000
|
||||||
Investment in land lease
|
―
|
(4,000
|
)
|
|||||
Net cash used in investing activities
|
(22,000
|
)
|
(109,000
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on short-term debt
|
(4,000
|
)
|
(15,000
|
)
|
||||
Net cash used in financing activities
|
(4,000
|
)
|
(15,000
|
)
|
||||
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS
|
5,000
|
―
|
||||||
NET DECREASE IN CASH AND EQUIVALENTS
|
(99,000
|
)
|
(465,000
|
)
|
||||
CASH AND EQUIVALENTS, Beginning of period
|
307,000
|
1,102,000
|
||||||
CASH AND EQUIVALENTS, End of period
|
$
|
208,000
|
$
|
637,000
|
||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
―
|
$
|
1,000
|
||||
Income taxes
|
$
|
―
|
$
|
―
|
|
●
|
The Company issued 13,680,672 shares of the Company’s common stock for future services valued at $134,000. This amount was recorded at issuance as prepaid expenses.
|
|
●
|
The Company issued 12,000,000 shares of the Company’s common stock for future services valued at $174,000. This amount was recorded at issuance as prepaid expenses.
|
Raw
Materials
|
Finished
Goods
|
Total
|
||||||||||
Framed-Artwork
|
$
|
761,000
|
$
|
―
|
$
|
761,000
|
||||||
Grass
|
78,000
|
13,000
|
91,000
|
|||||||||
Total
|
$
|
839,000
|
$
|
13,000
|
$
|
852,000
|
Raw
Materials
|
Finished
Goods
|
Total
|
||||||||||
Framed-Artwork
|
$
|
460,000
|
$
|
―
|
$
|
460,000
|
||||||
Grass
|
78,000
|
13,000
|
91,000
|
|||||||||
Total
|
$
|
538,000
|
$
|
13,000
|
$
|
551,000
|
Building
|
20 to 30 years
|
Machinery and equipment
|
10 years
|
Office equipment
|
5 years
|
Vehicles
|
5 years
|
Computers
|
3 years
|
2011
|
2010
|
|||||||
US Government customers
|
$
|
14,000
|
$
|
6,000
|
||||
Framed artwork customers
|
155,000
|
303,000
|
||||||
Total accounts receivable
|
169,000
|
309,000
|
||||||
Less: Allowance for doubtful accounts
|
―
|
―
|
||||||
Accounts receivable, net
|
$
|
169,000
|
$
|
309,000
|
2011
|
2010
|
|||||||
Building
|
$
|
782,000
|
$
|
772,000
|
||||
Machinery and equipment
|
433,000
|
417,000
|
||||||
Office equipment
|
127,000
|
127,000
|
||||||
Vehicles
|
171,000
|
170,000
|
||||||
Leasehold improvements
|
1,000
|
1,000
|
||||||
Total property and equipment
|
1,514,000
|
1,487,000
|
||||||
Less: Accumulated depreciation
|
517,000
|
488,000
|
||||||
Fixed assets, net
|
$
|
997,000
|
$
|
999,000
|
2011
|
2010
|
|||||||
Land use right
|
$
|
720,000
|
$
|
720,000
|
||||
Less: Accumulated amortization
|
172,000
|
162,000
|
||||||
Land use right, net
|
$
|
548,000
|
$
|
558,000
|
2011
|
2010
|
|||||||
License to patent
|
$
|
226,000
|
$
|
226,000
|
||||
Less: Accumulated amortization
|
84,000
|
80,000
|
||||||
Intellectual property, net
|
$
|
142,000
|
$
|
146,000
|
2011
|
2010
|
|||||||
License to Grass
|
$
|
507,000
|
$
|
507,000
|
||||
Less: Accumulated amortization
|
61,000
|
54,000
|
||||||
License to Grass, net
|
$
|
446,000
|
$
|
453,000
|
2010
|
||||
Risk free interest rate
|
3.11%
|
|||
Dividends
|
0%
|
|||
Volatility factor
|
130.43%
|
|||
Expected life
|
6.67 years
|
|||
Annual forfeiture rate
|
16.1%
|
Number of
Shares
|
Weighted-
Average
Exercise
Price Per
Share
|
Weighted-
Average
Remaining
Contractual
Term In
Years
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2010
|
56,130,000
|
$
|
0.02
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited
|
—
|
—
|
||||||||||||||
Outstanding at March 31, 2011
|
56,130,000
|
$
|
0.02
|
7.2
|
$
|
140,000
|
||||||||||
Exercisable at March 31, 2011
|
40,311,000
|
$
|
0.02
|
7.2
|
$
|
80,000
|
Number of
Shares
|
Weighted-
Average
Exercise
Price Per
Share
|
Weighted-
Average
Remaining
Contractual
Term In Years
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2010
|
1,538,462
|
$
|
0.02
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited
|
—
|
—
|
||||||||||||||
Outstanding at March 31, 2011
|
1,538,462
|
$
|
0.02
|
1.3
|
$
|
—
|
||||||||||
Exercisable at March 31, 2011
|
1,538,462
|
$
|
0.02
|
1.3
|
$
|
—
|
Number of
Shares
|
Weighted-
Average
Exercise
Price Per
Share
|
Weighted-
Average
Remaining
Contractual
Term In Years
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2010
|
1,396,000
|
$
|
.02
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited
|
—
|
―
|
||||||||||||||
Outstanding at March 31, 2011
|
1,396,000
|
$
|
.02
|
3.4
|
$
|
—
|
||||||||||
Exercisable at March 31, 2011
|
1,396,000
|
$
|
.02
|
3.4
|
$
|
—
|
2010
|
||
Risk free interest rate
|
3.37%
|
|
Dividends
|
0%
|
|
Volatility factor (estimated)
|
100.00%
|
|
Expected life
|
6.67 years
|
|
Annual forfeiture rate (estimated)
|
0%
|
Number of
Shares
|
Weighted-
Average
Exercise
Price Per
Share
|
Weighted-
Average
Remaining
Contractual
Term In
Years
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2010
|
1,350,000
|
$
|
0.80
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited
|
—
|
—
|
||||||||||||||
Outstanding at March 31, 2011
|
1,350,000
|
$
|
0.80
|
9.0
|
$
|
—
|
||||||||||
Exercisable at March 31, 2011
|
675,000
|
$
|
0.80
|
9.0
|
$
|
—
|
2010
|
2009
|
|||||||
CDC of the County of Los Angeles, secured, with interest at 5% due July 1, 2011
|
$
|
8,000
|
$
|
12,000
|
||||
Less Current Portion of Long-term Debt
|
8,000
|
12,000
|
||||||
Net Long-term Debt
|
$
|
―
|
$
|
―
|
|
(i)
|
DMFCC: DMFCC is a provider of disposable fuel cartridges and intellectual property protection for manufacturers of direct methanol and other liquid hydrocarbon fuel cells. Direct methanol fuel cells are expected to be replacements for traditional batteries and are expected to gain a substantial market share in the future because they offer longer operating time as compared to current lithium ion batteries and may be instantaneously recharged by simply replacing the disposable fuel cartridge.
|
|
(ii)
|
VIASPACE Corporate: VIASPACE Corporate is identifying and pursuing additional business opportunities in areas including batteries, alternative fuels, and new products to conserve energy and reduce emissions.
|
|
(i)
|
Ionfinity: Ionfinity is working on a next-generation mass spectrometry technology, which could significantly improve the application of mass spectrometry for industrial process control and environmental monitoring and could also spawn a new class of detection systems for homeland security.
|
|
(i)
|
IPA China and IPA BVI: Specialize in manufacturing high-quality, copyrighted, framed artwork in the PRC which is sold to retail stores in the US.
|
|
(i)
|
VGE parent company: VGE grows a fast-growing, high yield, low carbon, nonfood energy crop called GKG in the PRC. 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. GKG can also be used as animal feed.
|
Three Months Ended
|
||||||||
March 31,
2011
|
March 31,
2010
|
|||||||
Revenues:
|
||||||||
Energy
|
$
|
―
|
$
|
―
|
||||
Security
|
48,000
|
170,000
|
||||||
Framed-Artwork
|
534,000
|
757,000
|
||||||
Grass
|
―
|
―
|
||||||
Total Revenues
|
$
|
582,000
|
$
|
927,000
|
||||
Income (Loss) From Operations:
|
||||||||
Energy
|
$
|
(11,000
|
)
|
$
|
(11,000
|
)
|
||
Security
|
3,000
|
21,000
|
||||||
Framed-Artwork
|
14,000
|
101,000
|
||||||
Grass
|
(366,000
|
)
|
(227,000
|
)
|
||||
Loss From Operations by Reportable Segments
|
(360,000
|
)
|
(116,000
|
)
|
||||
Corporate Administrative Costs
|
(121,000
|
)
|
(266,000
|
)
|
||||
Corporate Stock Compensation and Warrant Expense
|
(307,000
|
)
|
(289,000
|
)
|
||||
Loss From Operations
|
$
|
(788,000
|
)
|
$
|
(671,000
|
)
|
2011
|
December 31,
2010
|
|||||||
Assets:
|
||||||||
Energy
|
$
|
144,000
|
$
|
148,000
|
||||
Security
|
135,000
|
132,000
|
||||||
Framed-Artwork
|
4,064,000
|
4,046,000
|
||||||
Grass
|
768,000
|
753,000
|
||||||
VIASPACE Corporate
|
12,407,000
|
12,316,000
|
||||||
Total Assets
|
$
|
17,518,000
|
$
|
17,395,000
|
2011
|
2010
|
|||||||
Stock Options
|
57,668,000
|
57,668,000
|
||||||
Warrants
|
624,000
|
624,000
|
2011
|
2010
|
|||||||
Basic and diluted net loss per share:
|
||||||||
Numerator:
|
||||||||
Net loss attributable to common stock
|
$
|
(762,000
|
)
|
$
|
(630,000
|
)
|
||
Denominator:
|
||||||||
Weighted average shares of common stock outstanding
|
1,255,735,431
|
913,326,255
|
||||||
Net loss per share of common stock, basic and diluted
|
$
|
*
|
$
|
*
|
|
* Less than $0.01 per share
|
2011
|
2010
|
|||||||
Due from JJ International
|
$
|
1,275,000
|
$
|
1,259,000
|
||||
Due from employee of IPA China
|
10,000
|
21,000
|
||||||
Total
|
$
|
1,285,000
|
$
|
1,280,000
|
2011
|
2010
|
|||||||
Due to employee of IPA China
|
$
|
20,000
|
$
|
6,000
|
||||
Due to JJ International
|
33,000
|
17,000
|
||||||
Due to Carl Kukkonen
|
521,000
|
471,000
|
||||||
Due to Nobuyuki Denda
|
11,000
|
11,000
|
||||||
Due to Sung Hsien Chang
|
62,000
|
—
|
||||||
Due to Officers of Ionfinity
|
5,000
|
—
|
||||||
Total
|
$
|
652,000
|
$
|
505,000
|
Total
|
Less than 1 Year
|
|||||||
Long-term debt obligations (a)
|
$
|
8,000
|
$
|
8,000
|
10.1 |
Amendment to Secured Promissory Note dated May 16, 2011 by and among Registrant and Sung Hsien Chang.*
|
10.2 |
Amendment to Senior Executive Employment Agreement dated May 16, 2011, by and among Registrant,
VIASPACE Green Energy, Inc. and Carl Kukkonen.*
|
10.3 | Amendment to Senior Executive Employment Agreement dated May 16, 2011, by and among Registrant, VIASPACE Green Energy, Inc. and Stephen Muzi.* |
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
32
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. *
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VIASPACE Inc.
(Registrant)
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Date: May 13, 2011
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By:
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/s/ CARL KUKKONEN
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Carl Kukkonen
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Chief Executive Officer
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Date: May 13, 2011
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By:
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/s/ STEPHEN J. MUZI
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Stephen J. Muzi
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Chief Financial Officer
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VIASPACE Green Energy Inc.
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Signature: /s/ Sung Hsien Chang
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Printed Name: Sung Hsien Chang
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Title: President
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EXECUTIVE
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Signature: /s/ Carl Kukkonen
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Printed Name: Carl Kukkonen
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AGREED AND ACKNOWLEDGED
:
VIASPACE Inc.
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Printed Name: Carl Kukkonen
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Title: President & CEO
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VIASPACE Green Energy Inc.
Signature: /s/ Sung Hsien Chang
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Printed Name: Sung Hsien Chang
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Title: President
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EXECUTIVE
Signature: /s/ Stephen Muzi
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Printed Name: Stephen Muzi
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AGREED AND ACKNOWLEDGED
:
VIASPACE Inc.
Signature: /s/ Carl Kukkonen
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Printed Name: Carl Kukkonen
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Title: President & CEO
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1.
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I have reviewed this Quarterly
Report on Form
10-Q of VIASPACE Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
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4.
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The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
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c.
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Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and
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5.
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The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.
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Date: May 13, 2011
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/s/ Carl Kukkonen | |
Carl Kukkonen
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Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this Quarterly
Report on Form
10-Q of VIASPACE Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
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4.
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The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
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c.
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Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and
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5.
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The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.
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Date: May 13, 2011
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/s/
Stephen J. Muzi
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Stephen J. Muzi
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Chief Financial Officer
(Principal Financial Officer)
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(1)
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the 10-Q Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 13, 2011
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/s/ Carl Kukkonen
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Carl Kukkonen
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Chief Executive Officer
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Date: May 13, 2011
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/s/ Stephen J. Muzi
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Stephen J. Muzi
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Chief Financial Officer
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