WALNUT, Calif., Oct. 29, 2012 (GLOBE NEWSWIRE) -- VIASPACE Inc. (OTCQB:VSPC) today announced that Board Chairman, Dr. Kevin Schewe, conducted a detailed interview with Karl Marek of TheStockRadio Show regarding the recent corporate separation of VIASPACE from VIASPACE Green Energy (VGE) and the future of VIASPACE as a stand alone company.
The following is a transcript from the interview which was released by TheStockRadio on Friday, October 26, 2012. The interview can be listened to at http://thestockradio.com/carl-kukkonen-ceo-of-viaspace-inc-vspcotc-qb/1737.
Question: What led to the separation of VIASPACE and VIASPACE Green Energy?
Answer: Our previous partner, Mr. Sung Chang, decided to move in a different direction with VIASPACE Green Energy (VGE), Inter Pacific Arts (IPA), and the Yingde, China Pellet Mill. VIASPACE held VGE's stock but we owed Mr. Chang $5.6 million. Mr. Chang could have foreclosed on VIASPACE but foreclosure was a lose-lose solution for all shareholders including me, Mr. Chang, our CEO (Carl Kukkonen), our CFO (Stephen Muzi) and at least a thousand general, VIASPACE common shareholders who would have all been left holding "wallpaper". With Mr. Chang's agreement and help, we embarked on a plan to save VIASPACE and split VIASPACE and VGE into "sister companies" that would both work to advance Giant King Grass (GKG) as the world's leading, renewable bioenergy platform.
Question: What are the highlights of the VIASPACE and VIASPACE Green Energy Separation Agreement?
Answer: Under the Separation Agreements, the $5.6 million debt to Chang was satisfied with VIASPACE returning all the VGE stock shares. As a result, VIASPACE became a stand-alone company and VGE, Inter Pacific Arts and the China Pellet Mill went to Chang. Both VIASPACE and VGE have remained as publicly traded companies. VIASPACE negotiated a Giant King Grass license agreement to commercialize GKG which covers the entire world outside China and Taiwan (VGE will commercialize GKG in China and Taiwan). VIASPACE will pay an 8% royalty fee to VGE for future GKG commercial revenues. Also as part of the separation, I agreed to provide VIASPACE a million dollars over five years in the form of a secured, convertible loan. I have been given the irrevocable proxy to the vote the company's 50.1% class-A preferred stock share and that stock share will be transferred to me after five years or when the company's market capitalization exceeds $50 million--whichever occurs first. Finally, insiders holding a total of 47% the current outstanding stock shares have agreed to a "lock-up" of those shares which prohibits trading or transferring those shares for the next 6 months.
Question: How has the separation of the companies affected shareholders (including yourselves)?
Answer: Accomplishing the separation has averted foreclosure and has preserved VIASPACE as a viable, publicly traded company with a very bright future. The VIASPACE management, board of directors and me personally, worked very hard to negotiate a separation and license agreement that gives us and all VIASPACE shareholders an excellent probability that we will succeed as a stand-alone company and continually build shareholder value going forward from here. VIASPACE Management agreed to a 33% pay reduction as part of a comprehensive plan to control expenses. Everyone who holds VIASPACE common shares is holding a tradable equity that now has significant upside potential. Our shareholders will see a new company totally focused on growth and shareholder value.
Question: What are the prospects for VIASPACE's success on your own?
Answer: I like this question Karl because it relates to where we have come from and where we are going. Since 2008, our CEO, Dr. Carl Kukkonen, has been laying the foundation of where our proprietary Giant King Grass fits into the emerging world of renewable biomass/bioenergy products. Laying this foundation has required research and development, rigorous and repeated testing of Giant King Grass by many reputable, independent laboratories and testing facilities, numerous speaking engagements at national and international conferences, and finally, commercialization of Giant King Grass in the real world to create a profitable business model. During that time frame from 2008 until 2012, the world's economies have been generally sluggish and slow to move forward with green, renewable bioenergy projects. We have watched other green energy companies not make it through this difficult time. VIASPACE has survived and has made Giant King Grass well-known to the global renewable's industries. Since the Spring of 2012, we have seen a definite surge in the global interest in our product, Giant King Grass, and customers recognize our expertise to use Giant King Grass as the highest yielding biomass crop in the world. With the separation of the companies behind us, VIASPACE is now poised for huge success at commercializing Giant King Grass worldwide (outside of China and Taiwan).
Question: Let's now talk about your future as a stand-alone company. What is your business strategy going forward from here?
Answer: The short answer, "deals, deals and more deals!" During the so-called "downtime" of our company while we negotiated the separation, I instructed our CEO, Dr. Carl Kukkonen, to get Giant King Grass growing in as many places as possible and I am pushing Carl seven days a week to get the deals lined up and executed. This strategy is working and we are more excited and optimistic about the success of this company than ever before. On October 3'rd, we announced our first real deal: a 20-year, 1,500 acre Giant King Grass supply contract with Tibbar Energy in St. Croix (U.S. Virgin Islands) for a 6 MW anaerobic biogas power plant. Electricity on St. Croix is currently generated with diesel and heavy fuel oil which is very expensive and produces substantial carbon dioxide emissions. We are partnering with Tibbar to use continuously renewable Giant King Grass as the dedicated bioenergy crop to fuel the power plant with a lower cost than fuel oil and negligible carbon dioxide emissions. This 20-year project is slated to be underway in 2013, fully on-line by first quarter 2014 and will generate over 20 full time jobs with a total economic benefit of $150 million to the community over the life of the project. Our business relationship with Tibbar has been excellent and we hope that our partnership will grow with them in the Caribbean region.
On October 16, we announced that we have signed business development and confidentiality agreements and received payment from June Industry Ltd. in Myanmar. Myanmar, formerly known as Burma, borders India, China and Laos and has the perfect climate for growing Giant King Grass. The previous military government ran power plant projects in the past, but now the new civilian government is granting permission to local and foreign companies to generate power. We envision Giant King Grass playing an important role in Myanmar's future, not only for electricity generation, but also for biofuels and other applications. We believe that there is a significant opportunity for VIASPACE to succeed with our partners in Myanmar.
We are actively engaged in the various stages of several other deals and we are contacted regularly from companies that we have visited with in the past or who are brand new to us. All of them have one thing in common: they need a high-yield, renewable, nonfood, dedicated green energy crop for green electricity and biofuels. We have the answer to their need: Giant King Grass and the expertise to make it work for their projects.
Question: The U.S. Department of Agriculture recently approved Giant King Grass in the United States. Today, October 22, you announced that Giant King Grass is growing in California. Can you tell us about these developments?
Answer: These developments are huge for our company! Our proprietary product, Giant King Grass, has been vigorously tested by the U.S. Department of Agriculture Animal and Plant Heath Inspection Service (APHIS) and has been released from quarantine for distribution in the United States. Giant King Grass in non-invasive and has been found to be pathogen free--we have been issued our U.S. phytosanitary certificate. We can now grow Giant King Grass anywhere in the continental United States and also including the U.S. Virgin Islands, Puerto Rico, Guam and Hawaii.
On October 22, we announced that Giant King Grass is growing in California. Remember that Giant King Grass grows best in warm climates and it is not frost-resistant. So I can be specific only in telling you that it is growing in Southern California. The state of California is a recognized leader in renewable energy and for agriculture in general. Giant King Grass can be grown on marginal lands and will not displace agricultural food production. Biomass electricity from GKG is available 24 hours a day, seven days a week for base power and Giant King Grass is also suitable for cellulosic biofuels, biochemicals and bioplastics. We hope to play an active role in the green energy future of California.
Our California site serves several important purposes for VIASPACE. First, we wanted to know how well Giant King Grass grows in Southern California--the answer is that it grows great there--it loves the climate there! We have been able to conduct some agronomic experiments on planting, germination, fertilization and water requirements. The site serves as a convenient U.S. "showroom" for potential customers so they can actually see and experience Giant King Grass for themselves. This site will also provide Giant King Grass seedlings for customers and partners in other states and export to other places. We can also provide grass samples for testing by customers. Our strategy is to rapidly and aggressively expand in the United States, Caribbean and Central and South America. Having our roots down in California fits perfectly into our corporate strategy!
Dr. Schewe commented, "The interview with TheStockRadio was a great opportunity to get the message of VIASPACE's bright future out to a wider audience and potentially attract new investors. We have recently taken additional steps to broaden our audience by connecting VIASPACE to social media. We have recently launched our corporate links to Facebook, Twitter and LinkedIn. We have updated the VIASPACE website at www.viaspace.com. We are committed to keeping our customers, shareholders, potential new investors and other interested parties informed of our ongoing progress."
About VIASPACE Inc.
VIASPACE grows renewable Giant KingTM Grass as a low-carbon fuel for clean electricity generation; for environmentally friendly energy pellets; and as a feedstock for bio-methane production and for green cellulosic biofuels, biochemicals and biomaterials. Giant King Grass is a proprietary, high yield, dedicated biomass clean energy crop that does not compete with or displace food production.
Safe Harbor Statement
Information in this news release includes forward-looking statements. These forward-looking statements relate to future events or future performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Such factors include, without limitation, risks outlined in our periodic filings with the U.S. Securities and Exchange Commission, including Annual Report on Form 10-K for the year ended December 31, 2011, and other factors over which VIASPACE has little or no control.
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