Is there an issue with the grass? Look here........
Our grass business may have grown, tested and sold multiple grass varieties
On September 30, 2012, VIASPACE and Viaspace Green Energy (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 (GKG) everywhere in the world other than China and Taiwan. VGE would also supply GKG grass and seedlings to VIASPACE. The license agreement describes GKG as a high-yield, non-genetically modified, natural hybrid grass that VGE received and licensed from IPA China, its wholly-owned subsidiary. In turn, we understand that IPA China had entered into an agreement with China Gate Technology Co. Ltd., a Brunei corporation, whereby IPA China purchased seedlings of GKG and other grasses from China Gate and the parties agreed to assist each other in growing, developing and commercializing GKG on or about October 20, 2008.
After recent testing, we discovered that some of the grass and the grass seedlings supplied to us from VGE may constitute varieties of grass that may not be defined in our License Agreement. Instead, in addition to the defined variety, VGE may also have supplied us with two other grasses which are similar in appearance and function to GKG (as defined in our license), but were genetically different grasses. We have been informed that these additional grass varieties were licensed to IPA China by China Gate, but IPA China has not explicitly licensed such grass to VGE or VIASPACE. These grasses are very similar in appearance and growth characteristics. We are actively investigating the genetics, propagation and performance differences between these different grasses.
Depending on the results of this ongoing analysis, we believe that VIASPACE may need to revise its License Agreement with VGE and IPA China to include multiple grasses or otherwise explore ways to use the grasses and seedlings we have been supplied. We are in discussions with VGE and IPA China to address the potential License Agreement issues of the multiple grasses and the circumstances and consequences to all parties as we may have been supplied multiple grasses and it is unclear whether they are covered by the License Agreement. We hope to clarify the License Agreement to provide that all grass varieties are covered. We are subject to the risk that we will not reach agreement to revise the license agreement with VGE and IPA China. This could materially and adversely affect our business and results of operations. We could expend significant resources to develop an alternative grass license and IP mechanism and still not be assured that our grass business would survive.
Now does anyone think VSPC will get a HUGE customer to buy into the worthless license they have with VGE and IPA China, who has it with China Gate, who has it with the Inventor?
