WALNUT, Calif., Oct. 2, 2012 (GLOBE NEWSWIRE) -- VIASPACE Inc. (OTC:VSPC), today provided the following update to shareholders.
The VIASPACE Board of Directors and Management is pleased to announce that the orderly separation of VIASPACE and VIASPACE Green Energy (VGE) has been completed and formal documents have been signed by VIASPACE, VGE and Mr. Sung Chang on September 30, 2012. As part of the separation agreement, VGE has the right to commercially develop Giant King™ Grass in China and Taiwan and VIASPACE has been granted an exclusive license to import, grow, sell, market and distribute Giant King Grass in the rest of the world outside China and Taiwan. Effective October 1, 2012, VIASPACE no longer has any ownership in VGE and has returned all of the shares it previously held in VGE back to VGE, who subsequently reissued them to Mr. Chang. As part of the separation, the VIASPACE secured debt and accrued interest of approximately $5.6 million owed to Mr. Chang no longer has to be paid.
The exclusive license that VIASPACE obtained from VGE has revenue milestones that need to be met every two years in order to maintain the license from VGE. VIASPACE will pay VGE an 8% royalty on net sales derived.
As part of the final agreements, insiders holding approximately 525 million common shares of VIASPACE stock (or 38% of outstanding common shares) have agreed to a 6 month hold of their stock with prohibitions against selling or transferring the stock.
Additionally, Director Dr. Kevin Schewe, the holder of 100 million shares of VIASPACE common stock, has entered into a loan agreement with VIASPACE in the form of a secured convertible note where he has agreed to invest $1 million in the company over a 5 year time period. Dr. Schewe has been granted irrevocable proxy to vote the Series A Preferred Stock and that Stock will be transferred to him in 5 years or when VIASPACE reaches a market capitalization of $50 million or higher, whichever occurs first.
As part of the separation, Dr. Carl Kukkonen will remain as CEO of VIASPACE and Mr. Stephen Muzi will remain as Chief Financial Officer. Dr. Kevin Schewe will become Chairman of the Board of Directors. Other Board members of VIASPACE are Dr. Kukkonen and Ms. Angelina Galiteva.
Dr. Carl Kukkonen, VIASPACE CEO, commented: "I am very pleased that our prior debt to Sung Chang has been satisfied and that VIASPACE is now a stand-alone company with a clean slate and a worldwide exclusive license to commercialize Giant King Grass outside China and Taiwan. During the transition to separate VIASPACE and VGE, I spent three months in Southeast Asia and traveled to meet with many different customers across the globe. I have worked hard to maximize our Company's chances to succeed on its own future revenues."
Dr. Kevin Schewe, VIASPACE Chairman of the Board, stated: "The separation of VIASPACE and VGE has been a time of challenge and success for us and Mr. Sung Chang. We envision VIASPACE and VGE operating as "sister companies" to commercialize Giant King Grass worldwide to make it the world's leading renewable biomass/bioenergy source. VIASPACE is now positioned to set the pace for this commercialization process and we have been vigorously pursuing new clients during the "quiet time" of separating the companies. Our shareholders will see a "new company" focused on providing tangible results and timely information. We want to attract new shareholders from around the world and reward our many long-term loyal shareholders with a company keen on growth and increasing share value. Our shareholders will not have to wait long to see a difference in the direction of this company."
All of the final documents related to the separation are in the process of being filed in a Form 8-K with the Securities and Exchange Commission and will be available at www.sec.gov.
About VIASPACE Inc.
VIASPACE is a clean energy company providing products and technology for renewable and alternative energy that reduce or eliminate dependence on fossil and high-pollutant energy sources. The Company grows Giant King Grass as a low-carbon fuel for electricity generating power plants, as a feedstock for bio methane production and cellulosic biofuels, and for other low-carbon, renewable energy products. For more information, please go to www.VIASPACE.com or contact Dr. Jan Vandersande, Director of Communications, at 800-517-8050 or IR@VIASPACE.com.
Safe Harbor Statement
Information in this news release includes forward-looking statements. These forward-looking statements relate to future events or future performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements 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, as well as general economic and business conditions; the ability to acquire and develop specific products and technologies; changes in consumer and business demand for the Company's products; competition from larger companies; changes in demand for alternative and clean energy; risks associated with international transactions; risks related to technological change; and other factors over which VIASPACE has little or no control.
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