10QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

or

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from            to

Commission File Number 333-110680

VIASPACE Inc.

(Exact name of small business issuer as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or
organization) 76-0742386
(I.R.S. Employer Identification No.)

2400 Lincoln Ave., Altadena, California 91001
(Address of principal executive offices)

(626) 296-6310
(Issuer’s telephone number)

Global-Wide Publication Ltd., 422 Larkfield Center, Suite 310, Santa Rosa, CA 95403
(Former name, former address and former fiscal year, if changed since last report)

     Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days þ Yes o No

     State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 282,585,715 Shares of $0.001 par value Common Stock issued and outstanding as of August 12, 2005.

Transitional Small Business Disclosure Format (Check one): YES o NO þ

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VIASPACE INC.

INDEX

Part I.	Financial Information:
Item 1.	Financial Statements:
	Report of Independent Registered Public Accounting Firm
	Consolidated Balance Sheet (Unaudited) June 30, 2005
	Consolidated Statements of Operations (Unaudited) - Three Months Ended June 30, 2005 and Six Months Ended June 30, 2005
	Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended June 30, 2005 and 2004
	Notes to Consolidated Financial Statements (Unaudited)
Item 2.	Management’s Discussion and Analysis or Plan of Operation.
Item 3.	Controls and Procedures.
Part II.	Other Information:
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.
Item 4.	Submission of Matters to a Vote of Security Holders.
Item 6.	Exhibits.
Signatures
Ex-10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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Item 1. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
VIASPACE Inc.
Altadena, CA

We have reviewed the accompanying consolidated balance sheet for VIASPACE Inc. for June 30, 2005 and the related pro forma consolidated statements of operations for the three and six months ended June 30, 2005, and pro forma consolidated statements of cash flows for the six months ended June 30, 2005, included in the accompanying Securities and Exchange Commission 10-QSB for the period ended June 30, 2005. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. The review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States.

The financial statements for the year ended September 30, 2004 for VIASPACE Inc. were audited by other accountants, whose report dated October 27, 2004, expressed an unqualified opinion on those financial statements. They have not performed any auditing procedures since that date. In our opinion, the information set forth in the accompanying consolidated balance sheet as of June 30, 2005 is fairly stated in all material respects in relation to the balance sheet from which it has been derived.

/s/ JASPERS + HALL, PC

Jaspers + Hall, PC
Denver, Colorado
August 15, 2005

VIASPACE INC.

CONSOLIDATED BALANCE SHEET
(Unaudited)

	June 30, 2005
ASSETS
Current Assets:
Cash and cash equivalents	$	2,898,840
Accounts receivable		326,750
Prepaid expenses		2,000
Total Current Assets		3,227,590
Fixed Assets, net of accumulated depreciation of $107,672		10,382
Other Assets:
Marketable Securities		24,449
Security Deposit		1,502
Total Other Assets		25,951
TOTAL ASSETS	$	3,263,923

See accountant’s review report.

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VIASPACE INC.

CONSOLIDATED BALANCE SHEET (Continued)
(Unaudited)

	June 30, 2005
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	435,606
Accrued Expenses		210,794
Unearned Revenue		93,000
Current Portion of Long-Term Debt		25,810
Due to Related Party		24,000
Deposit for Stock Option Exercise		500,000
Total Current Liabilities		1,289,210
Long-Term Debt		113,498
Minority Interest in Consolidated Subsidiaries		458,433
Stockholders’ Equity:
Common Stock, $0.001 par value, 400,000,000 shares authorized, 280,800,000 issued and outstanding		280,800
Additional Paid In Capital		1,044,664
Treasury Stock		(24,000	)
Retained Earnings		101,318
Total Stockholders’ Equity		1,402,782
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,263,923

See accountant’s review report.

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VIASPACE INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
REVENUES:
Government Contracts	$	188,750		$	100,000		$	223,750		$	100,000
Other Contracts		—			—			11,667			—
Total Revenue		188,750			100,000			235,417			100,000
COST OF SALES:
Government Contract Costs		102,971			10,111			148,095			10,111
Total Cost of Sales		102,971			10,111			148,095			10,111
GROSS PROFIT		85,779			89,889			87,322			89,889
OPERATING EXPENSES:
Research and Development		267,311			13,544			312,744			23,683
Selling, General and Administrative		276,913			36,648			511,704			106,118
Total Operating Expenses		544,224			50,192			824,448			129,801
INCOME (LOSS) FROM OPERATIONS		(458,445	)		39,697			(737,126	)		(39,912	)
Other Income/Expense, net		2,682			(811	)		20,444			(7,547	)
NET INCOME (LOSS) BEFORE MINORITY INTEREST AND DISCONTINUED OPERATIONS		(455,763	)		38,886			(716,682	)		(47,459	)
Minority Interest in Consolidated Subsidiaries		(7,552	)		(45,580	)		31,166			(44,644	)
NET LOSS BEFORE INCOME (LOSS) FROM DISCONTINUED OPERATIONS		(463,315	)		(6,694	)		(685,516	)		(92,103	)
Income (Loss) from Discontinued Operations		3,416			(12,066	)		3,874			(13,576	)
NET LOSS	$	(459,899	)	$	(18,760	)	$	(681,642	)	$	(105,679	)
NET LOSS PER SHARE, BASIC AND DILUTED	$	*		$	*		$	*		$	*
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		280,800,000			280,800,000			280,800,000			280,800,000

*  Less than $0.001

See accountant’s review report.

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VIASPACE INC.

PRO FORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended
	June 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(681,642	)	$	(105,679	)
Depreciation		3,974			4,000
Adjustments to reconcile net loss to net cash provided (used in) operating activities:
Decrease in accounts receivable		70,086			10,504
Decrease in prepaid expenses		—			9,258
(Increase) in other assets		(1,502	)		—
Increase in accounts payable		23,707			47,097
Increase in deferred revenue		73,333			—
Increase (decrease) in accrued expenses and other		(7,701	)		2,095
Increase in related party payable		6,076			164
Minority interest		(31,166	)		44,644
Net cash provided by (used in) operating activities		(544,835	)		12,083
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets		(4,864	)		—
Acquisition of subsidiary, net of cash acquired		33,758			—
Net cash used in investing activities		28,894			—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from members’ investment		1,000,000			—
Deposit from shareholder for exercise of stock option		500,000			—
Payment on bank notes payable		(10,772	)		—
Payments on long-term debt		(7,084	)		—
Net cash provided by financing activities		1,482,144			—
NET INCREASE IN CASH AND CASH EQUIVALENTS		966,203			12,083
CASH AND CASH EQUIVALENTS, Beginning of period		1,932,637			115,574
CASH AND CASH EQUIVALENTS, End of period	$	2,898,840		$	127,657
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	4,711		$	11,518
Income taxes	$	—		$	—

See accountant’s review report.

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VIASPACE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Background and Merger

VIASPACE Inc. (the “Company” or “VIASPACE”), formerly known as Global-Wide Publication Ltd., (“GW”), was incorporated in the state of Nevada on July 14, 2003. The Company’s fiscal year end was changed, effective August 3, 2005, by the Board of Directors from September 30 to December 31.

Pursuant to an Agreement dated August 29, 2003, and completed September 30, 2003, the Company acquired all of the issued and outstanding shares of Marco Polo World News Inc. (“MPW”), a British Columbia, Canada corporation that produces, publishes and distributes a weekly ethnic language newspaper called I1 Marco Polo Italian Weekly, in consideration of 2,100,000 restricted shares of its common stock issued to the one shareholder of MPW. As a result of the transaction, MPW became a wholly owned subsidiary of the Company and, as of the date of completion of the acquisition agreement, the financial operations of the two companies were merged.

On June 16, 2005, the Company announced that it had executed a definitive agreement to complete a merger with ViaSpace Technologies LLC (“ViaSpace LLC”). ViaSpace LLC was founded in July 1998 with an objective of transforming technologies from NASA/California Institute of Technology’s Jet Propulsion Laboratory and other advanced technology centers into profitable commercial enterprises through its connections with the advanced technology community. Through its ownership in three companies, Direct Methanol Fuel Cell Corporation (“DMFCC”), Arroyo Sciences, Inc. (“ASI”), and Ionfinity LLC (“Ionfinity”), ViaSpace LLC has a diversified high tech portfolio that includes microelectronics, sensors, homeland security & public safety, energy fuel cells, information & computational technology, RFID, e-finance, and mobile e-commerce. The Company also owns 100% of Concentric Water Technology LLC “Concentric Water”, which is developing water purification applications.

The shareholders of the Company and the membership interest holders of ViaSpace LLC had each voted in favor of the Merger to be effective on June 22, 2005.

On June 22, 2005, the effective date of the merger:

a)	GW, as the surviving entity, changed its name to VIASPACE Inc.;
b)	The Company authorized a 5 for 1 split; a 6 for 1 split was previously authorized effective May 23, 2005;
c)	The Members of ViaSpace LLC were issued an aggregate of 226,800,000 post-split shares of GW common stock in consideration for their membership interests of ViaSpace LLC. A total of 54,000,000 post-split shares of GW common stock will continue to be held by the pre-existing GW shareholders;
d)	The authorized capital of VIASPACE will be 400,000,000 shares of common stock ($0.001 par value) and 5,000,000 shares of preferred stock ($0.001 par value).

On May 19, 2005, the Company entered into a Share Purchase Agreement with a former director and officer of the Company, pursuant to which, upon the closing of the Merger, the Company purchased certificates equal to 2,400,000 shares (prior to the 6 for 1 forward stock split and the 5 for 1 forward stock split) of Company Common Stock for $24,000.

In addition, on May 19, 2005, the Company entered into an Acquisition Agreement with a former director and officer of the Company, pursuant to which, upon the closing of the Merger with ViaSpace LLC on June 22, 2005, the Company sold 100% of its interest in MPW in exchange for the surrender of certificates equal to 2,100,000 shares of Company Common Stock (prior to the 6 for 1 forward stock split and the 5 for 1 forward stock split). Thus, as of June 22, 2005, the Company no longer had any ongoing operations related to MPW, or any newspaper publication business.

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Basis of Presentation - The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB of Regulation S-B. The interim unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. All significant intercompany accounts and transactions have been eliminated on consolidation. Certain reclassifications have been made in order to conform to the June 30, 2005 financial statement presentation.

The unaudited pro forma consolidated statements of operations and pro forma consolidated statements of cash flows for the periods ending June 30, 2005 and 2004, combines GW’s statements of operations and statements of cash flows with ViaSpace LLC’s statements of operations and statements of cash flows for the same periods.

Principles of Consolidation – The Company is generally a founding shareholder of its affiliated companies, which are accounted for under the consolidation method. Affiliated companies, in which the Company owns, directly or indirectly a controlling voting interest, are accounted for under the consolidation method of accounting including DMFCC, ASI, Ionfinity and Concentric Water. Under this method, an affiliated company’s results of operations are reflected within the Company’s consolidated statement of operations. Transactions between the Company and its consolidated affiliated companies are eliminated in consolidation. The Company has adopted FASB 141, Statement of Accounting Standards No 141, “Business Combinations”, which requires use of the purchase method for all business combinations initiated after June 30, 2001.

Minority Interest in Subsidiaries – Minority interest in consolidated subsidiaries represents the minority stockholders’ proportionate share of equity of DMFCC, Ionfinity and ASI. The Company’s controlling interest requires that these companies’ operations be included in the consolidated financial statements. The percentage of Ionfinity, DMFCC, and ASI that is not owned by the Company is shown as “Minority Interest in Consolidated Subsidiaries” in the Consolidated Statement of Operations and Consolidated Balance Sheet.

Cash and Cash Equivalents - The Company considers all highly liquid debt instruments, purchased with an original maturity of three months or less, to be cash equivalents.

Use of Estimates in the Preparation of the Financial Statements - The preparation of 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Impairment of Long-lived Assets - The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may no longer be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. For purposes of estimating future cash flows from impaired assets, the Company groups assets at the lowest level fro which there are identifiable cash flow that are largely independent of the cash flow of other groups of assets. There have been no impairment charges recorded by the Company.

Fair Value of Financial Instruments – The recorded value of accounts receivables, accounts payable and accrued expenses approximate their fair values based on their short-term nature. The recorded values of long-term debt and liabilities approximate fair value.

Property and Equipment – Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided for using the straight-line method over the estimated useful life of the assets, which range from three to seven years.

Marketable Securities - The Company accounts for marketable securities in accordance with the provisions of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. All of the Company’s securities are classified as available for sale securities.

Income Taxes — The Company records income taxes in accordance with the provisions of SFAS No. 109, “Accounting for Income Taxes.” The standard requires, among other provisions, an asset and liability approach to recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities. Valuation allowances are

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provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Revenue Recognition – The Company recognizes revenue on government contracts when the particular milestone is met and delivered to the customer. Product sales revenue are recognized upon shipment, as titles passes, FOB shipping point. Management fees are recognized as received for services to third party entities.

Net Income (Loss) Per Share - The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share,” and Securities and Exchange Commission Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of SFAS No. 128 and SAB 98, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.

Concentration of Credit Risk – The Company’s financial instruments that are exposed to concentration of credit of credit risk consist primarily of cash equivalents. The Company maintains all of its cash accounts with high credit quality institutions, such balances with any one institution may exceed FDIC insured limits.

Research and Development - The Company charges research and development expenses to operations as incurred.

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30,		Useful
	2005		Life
Furniture and Fixtures	$	21,148	7 years
Computer Equipment		46,459	3 years
Leasehold Improvements		50,447	5 years
Total Property and Equipment		118,054
Less: Accumulated Depreciation		107,672
Net Property and Equipment	$	10,382

The depreciation expense for the six months ended June 30, 2005 and 2004 was $3,974 and $4,000, respectively.

NOTE 3 – OWNERSHIP INTEREST IN AFFILIATED COMPANIES

As of June 30, 2005, the Company owned a controlling interest in Ionfinity by owning 46.3% of the outstanding membership interest which combined with membership interests owned by previous members of ViaSpace LLC gives the Company a controlling interest. As of June 30, 2005, the Company owned a majority interest in DMFCC by owning 81.6% of the outstanding shares of voting common stock. On May 2, 2005, the Company invested $1,500,000 in DFMCC to purchase preferred stock. As of June 30, 2005, the Company owned 99.8% of the voting stock of ASI. As of June 30, 2004, the Company owned 100% of the membership interest in Concentric Water Technology, LLC. The company also owns 52% of eCARmerce Inc., an inactive company as of June 30, 2005.

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NOTE 4 – LONG-TERM DEBT

Long-term debt is composed of the following:

	June 30,
	2005
Community Development Commission of the County of Los Angeles, non-secured, with interest at 5% due 7/1/2009	$	50,000
Community Development Commission of the County of Los Angeles, non-secured, with interest at 5% due 9/1/2009		89,308
Total Long-Term Debt		139,308
Less Current Portion		25,810
Net Long-Term Debt	$	113,498

The monthly payments on these notes including interest are $2,762 effective August 1, 2005.

NOTE 5 – NOTE PAYABLE – RELATED PARTY

In 2004, a loan was made to the Company by two officers of the Company for $12,376 to pay for expenses of the Company during the year. These loans were repaid in March 2005. At June 30, 2005, there is a related party payable of $24,000 to a former director and officer of the Company as discussed in Note 1.

NOTE 6 – STOCK OPTIONS

On February 25, 2005, ViaSpace LLC granted SNK Capital Trust (the “Optionee” or “SNK”) an option to purchase up to 5,000,000 membership units of ViaSpace LLC for an aggregate purchase price of $7,500,000. SNK had previously purchased 7,350,000 membership units for $1,500,000 in December 2004, and 2,000,000 membership units for $1,000,000 in February 2005.

In May 2005, ViaSpace LLC agreed to increase the previous option to allow the Optionee an option to purchase up to 6,666,666 Membership Units at a price of $1.50 per membership unit, for an aggregate purchase price of $10,000,000.

On June 15, 2005, the Company, ViaSpace LLC and SNK entered into a stock option agreement to supercede and replace the previous option between ViaSpace LLC and SNK. This agreement granted SNK an option (the “Option”) to purchase up to 36,000,000 shares of common stock of the Company for $0.28 per share. The Option shall expire on (i) July 15, 2005, if less than $500,000 of the Option has been exercised prior to such time; (ii) August 31, 2005, if less than an aggregate of $1,000,000 of the Option has been exercised prior to such time; (iii) February 15, 2006, if less than an aggregate of $2,000,000 of the Option has been exercised prior to such time or (iv) the close of business on February 15, 2007 if the Option has not previously expired. The exercise of the Option may be accelerated at any time at the election of the Optionee.

On June 28, 2005, the Company received $500,000 from SNK that is classified as a deposit on the Company’s consolidated balance sheet. The formal stock purchase agreement was effective on July 14, 2005 between the Company and SNK and 1,785,715 shares of common shares were issued to SNK.

The Option described above was granted to SNK subject to certain terms and conditions. Upon the completion of the merger on June 22, 2005 as described in Note 1, out of a total of 50,490,000 shares of common stock to be issued to SNK in connection with the merger, SNK received 17,990,000 shares of common stock outright. The balance of 32,500,000 shares (the “Held Shares”) of common stock registered to SNK at such time are held in trust

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by the Company as part of the consideration for the granting of the Option. The Held Shares shall be released either to SNK or to certain prior members of ViaSpace LLC as exercise thresholds are met by SNK.

NOTE 7 – DISCONTINUED BUSINESS OPERATIONS

As explained in Note 1, on the effective date of the Merger between GW and ViaSpace LLC, 100% of the outstanding shares of MPW, a wholly-owned subsidiary of GW, engaged in the newspaper publication business was exchanged for the surrender of 2,100,000 common shares of the Company (prior to the 6 for 1 forward stock split and the 5 for 1 forward stock split). As of June 30, 2005, the Company no longer has any active operations in the newspaper publication business. For the six months ended June 30, 2005 and 2004, the revenue and expenses of MPW are shown net of each other, and included in the consolidated statements of operations under the caption Income from Discontinued Operations. The detailed components are shown below:

	Three months ended June 30,					Six months ended June 30,
	2005		2004			2005		2004
Revenues	$	32,287	$	49,110		$	70,366	$	84,168
Cost of Sales		17,561		23,553			43,018		48,303
Gross Profit		14,726		25,557			27,348		35,865
Selling, General and Administrative Expenses		11,310		37,623			23,474		49,441
Income (Loss) from Discontinued Operations	$	3,416	$	(12.066	)	$	3,874	$	(13,576	)

Note 8 — FINANCIAL ACCOUNTING DEVELOPMENTS

In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (“FIN No. 46R”), which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN No. 46R replaces FASB Interpretation No. 46, “Consolidation of Variable Interest Entities”, which was issued in January 2003. Companies are required to apply FIN No. 46R to variable interests in variable interest entities (“VIEs”) created after December 31, 2003. For variable interest in VIEs created before January 1, 2004, the Interpretation is applied beginning January 1, 2005. For any VIE that must be consolidated under FIN No. 46R that were created before January 1, 2004, the assets, liabilities and non-controlling interests of the VIE initially are measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN No. 46R first applies may be used to measure the assets, liabilities and non-controlling interest of the VIE. The Company does not have any interest in any VIE.

In December 2004, the FASB issued SFAS No. 123(R) (revised 2004), “Share-Based Payment” which amends FASB Statement No. 123 and will be effective for public companies for interim or annual periods after June 15, 2005. The new standard will require entities to expense employee stock options and other share-based payments. The new standard may be adopted in one of three ways – the modified prospective transition method, a variation of the modified prospective transition method or the modified retrospective transition method. The Company is evaluation how it will adopt the standard and evaluating the effect that the adoption of SFAS 123(R) will have on our financial position and results of operations.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4. This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling cost, and wasted material (spoilage). Paragraph 5 of ARB No. 43, Chapter 4, previously stated that “under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges.” SFAS No. 151 requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the prospectively and are effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted for inventory costs incurred during fiscal years beginning after the date this Statement was issued. The adoption of SFAS No. 151 is not expected to have a material impact on the Company’s financial position and results of operations.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are

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expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material impact on the Company’s financial position and results of operations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Our future results may differ materially from those currently anticipated depending on a variety of factors, including those described below under “Risks Related to Our Future Operations” and our filings with the Securities and Exchange Commission. The following should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

Overview

Prior to June 22, 2005 and the merger with ViaSpace LLC, we were engaged in the production and distribution of an ethnic bilingual (English/Italian) weekly newspaper called “Marco Polo” through a wholly-owned subsidiary, Marco Polo News Inc. (“MPW”). The newspaper was produced and distributed on a weekly basis mainly in the Vancouver, British Columbia, Canada metropolitan area. As discussed in Note 1 and Note 7, immediately prior to our merger with ViaSpace LLC, 100% of the common shares of MPW were delivered to a former officer and director of the Company in exchange for 2,100,000 shares of the Company’s common stock (prior to the 6 for 1 forward stock split and the 5 for 1 forward stock split). As of June 30, 2005, we no longer have any active operations in the newspaper publication business.

Effective June 22, 2005, our current three active operating companies are Direct Methanol Fuel Cell Corporation, Ionfinity LLC, and Arroyo Sciences, Inc.

Direct Methanol Fuel Cell Corporation

Direct Methanol Fuel Corporations (“DMFCC”) is pursuing what we believe to be a significant business opportunity in the disposable methanol fuel cartridge market. We believe that disposable methanol fuel cell cartridges could provide the fuel for tomorrow’s fuel-cell powered portable electronic devices, such as laptop computers and cell phones. Several manufacturers of portable electronic devices have unveiled prototype fuel-cell powered products that significantly increase the operating time offered by today’s batteries. This consumer business is similar to that for disposable batteries, cigarette lighters or ink cartridges for printers. Because the methanol cartridges are disposable, consumer usage would create recurring revenue.

We expect that direct methanol fuel cells (“DMFCs”) could replace lithium ion batteries in portable electronic devices. Our projection is that a direct methanol fuel cell could power a laptop computer for up to 10 hours using a small disposable methanol fuel cartridge that is projected to cost between $2 and $3. The laptop can be instantly “recharged” by replacing the fuel cartridge. When an electrical outlet is available, no methanol is consumed. Our projection is that a smaller cartridge could power a cell phone for up to 3 weeks.

The direct methanol fuel cell was invented and developed at the NASA/Caltech Jet Propulsion Laboratory and the University of Southern California (“USC”) and is protected by 56 issued and over 62 pending patents worldwide. Caltech and USC are founding shareholders in DMFCC. This portfolio of patents covers a wide range of technologies including the membrane, catalyst, membrane electrode assembly, methanol sensor, and end-to-end DMFC stack systems. It includes the fundamental patent on the direct methanol fuel cell (US 5,599,638) and several other seminal patents which are needed by most companies manufacturing or selling DMFCs.

DMFCC plans to work cooperatively with all fuel cell and electronics manufacturers in Japan, Korea, United States and elsewhere to provide them the patent protection they need to bring their fuel cell products to market. DMFCC

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and its partners will also provide the industry with qualified sources of methanol fuel cartridges.

DMFCC also plans to work with customers and partners to develop direct methanol fuel cells for custom applications and crucial components for the fuel cell industry.

In October of 2004, DMFCC entered into an employment agreement with Dr. Carl Kukkonen, Chief Executive Officer. Under the agreement, Dr. Kukkonen is entitled to receive an annual base salary of $225,000 and a performance-based bonus of up to 25% of his base salary for the first three years of employment. In the event DMFCC terminates Dr. Kukkonen’s employment without cause, the agreement provides for severance payments to Dr. Kukkonen equal to $112,500.

DMFCC has not generated revenues during 2005, and does not expect to generate revenues until 2007. For the six months ended June 30, 2005, DMFCC incurred $368,042 in operating expenses. Of this amount $142,452 was for research and development activities related to the development of a prototype device, including payroll, consulting and subcontractor costs. In addition, $225,590 was spent on selling, general and administrative expenses, primarily payroll expenses, consulting costs and travel expenses.

Ionfinity LLC

Ionfinity LLC’s (“Ionfinity”) business includes the future development and production of next-generation mass spectrometry (“MS”) technology, which could not only revolutionize the traditional applications of MS, but could also ring in a new era of detection systems. Our technology combines two inventions developed at the NASA/Caltech Jet Propulsion Laboratory, which could enable the system to provide a 10x increase in sensitivity, a 10x increase in mass range and the ability to miniaturize the product to make it portable and low cost. We expect that the Ionfinity system could allow high sensitivity and specificity in a small portable system — a carry-on suitcase in the near term and a shoe box or smaller size in the future, allowing the system to be deployed in many situations or places where monitoring of air, water or other substances is required.

A group of sensors can be combined with on-board computing network and wireless interfaces to form a real-time distributed sensing network. This will enable distributed process measurement and control and can provide comprehensive monitoring and rapid detection of common contaminants, as well as nuclear, biological, and chemical agents released intentionally or through other means.

For the six months ended June 30, 2005, Ionfinity recognized revenues of $235,417 primarily from contracts with the United States Navy and United States Air Force. Approximately $67,000 in revenues were also recognized from contract billings to Caltech/Jet Propulsion Laboratory and under a commercial contract.

The goal of the Navy’s contract is the development and demonstration of a miniature and portable instrument to measure weapons of mass destruction and industrial chemicals in water and air. The instrument’s small size makes it suitable for future modification and integration into other Navy systems. The two-year Navy contract has a base value of $511,731 and two additional options totaling $205,651 if exercised by the Navy. The remaining base contract value to be completed and billed on the Navy contract is $186,731. The Company expects the Navy to exercise these options, although its certainty is not guaranteed.

The goal of the Air Force contract is for Ionfinity with its partners, the NASA/Caltech Jet Propulsion Laboratory, to develop and demonstrate an innovative nano-propulsion system that incorporates a machined electrostation ion generator that provides direct and complete ionization of propellant gas, the efficient acceleration of ions, a micromachined neutralizing mechanism that prevents spacecraft charging, a compact efficient high voltage power supply, and a micromachined multi-wafer ion engine. The Air Force contract has a base value of $175,000 and a $174,958 option by the Air Force. The option was exercised by the Air Force in March 2005.

For the six months ended June 30, 2005, direct costs charged against contract revenues including payroll, consulting and subcontracting costs total $148,095. In addition, the company has incurred $22,557 in research and development; and selling, general and administrative expenses.

Arroyo Sciences, Inc.

Founded in 2002, Arroyo Sciences, Inc. (“ASI”) is developing and marketing computational solutions and platforms that are applicable to the security and supply chain industries. The company is focused on fusion of radio frequency, nuclear, and electromagnetic imaging platforms to deliver information products in transportation and supply chain

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security, logistics assurance, and first responder safety. To accelerate its strategy, ASI is combining in-house core expertise and analytical software products with an extensive portfolio of revolutionary inferencing, real-time sensor fusion, imaging, and signal processing technologies strategically licensed from NASA/Caltech’s Jet Propulsion Laboratory.

ASI’s initial product is the MicroTracker, a wearable wireless micro tracker for monitoring assets and individuals in buildings and hazardous environments. ASI’s near-term commercialization focus is on the following additional products:

• COBRA: a maritime transportation risk assessment and decision support system;

• DeepScan: automated analysis of air and seaport cargo containers and luggage; and

• Immersive radio-frequency identification: deployment in supply chain applications.

ASI’s strategy is to design highly differentiated information products and targeted applications that it believes have the potential to offer customer value through increased operational efficiency, productivity, and resource utilization. ASI plans to leverage initial commercialization successes to offer follow-on product offerings, drawing on a common technology core.

On July 12, 2005, ASI announced it had acquired an exclusive license to U-HUNTER technology. Funded by the United States Army Corps of Engineers at NASA/Caltech’s Jet Propulsion Laboratory, the U-HUNTER technology was originally developed for inferring the presence of buried explosives and explosive waste based on the exploitation of electromagnetic, magnetic and multi-spectral sensors. U-HUNTER was extensively validated and certified by the United States Army Corps of Engineers through analysis of remediation survey data from formerly-used defense sites at McKinley Range, Umatilla, and Camp Simms.

On July 25, 2005, ASI announced it had acquired an exclusive license from Caltech to MUDSS technology. The Mobile Underwater Debris Survey System (“MUDSS”)  was developed to locate and identify underwater unexploded ordnance. MUDSS was developed jointly by Navy’s Coastal Systems Station and NASA’s Jet Propulsion Laboratory for the Strategic Environmental Research and Development Program. Originally the technology was optimized for fusion of acoustic, magnetic, electro-optical mine-hunting and trace chemical detection sensors using advanced signal and image processing algorithms and real-time 3-D visualization technologies. The unfortunate Swissair Flight 111 mishap in 1998 offered an operational opportunity to test capabilities of MUDSS in a real-world setting. MUDSS successfully allowed the search team to define the debris field quickly and accurately in Peggy’s Cove, located off the coast of Nova Scotia. For this investigation, the MUDSS payload was extended to include advanced Synthetic Aperture Sonar (“SAS”) and electro-optical identification system (“EIS”) to locate debris from distances in excess of 110 feet. MUDSS operates by combining sonar and EIS technologies in a single submersible, torpedo-like vehicle that feeds high-speed data to a mothership via a fiber-optic cable. This package enables the sonar to locate objects on the ocean floor and then to use the EIS to zoom in and identify those objects at closer ranges. MUDSS is another key building block in ASI’s research and development pipeline.

On July 28, 2005, ASI announced that it had licensed SHINE technology from Caltech. Spacecraft Health Inference Engine (“SHINE”) is an ultra-fast rules engine originally designed for on-board monitoring, analysis

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and diagnosis of NASA’s spacecraft and ground data systems. It is intended for mission critical systems where inferencing speed, portability and reuse is of critical importance.

For the six months ended June 30, 2005, ASI has not recorded any revenues. ASI has entered into a contract with a company in the defense industry and received a purchase order for $85,000 for the delivery of two MicroTracker units. ASI has received the payment from this customer and has classified this amount in unearned revenue at June 30, 2005. ASI expects to complete and build the purchased units during the remainder of 2005, and will reclass this amount to revenues when the product is delivered to its customer. The company is actively seeking new business; however, no contracts have been signed as of this date.

For the six months ended June 30, 2005, the company incurred $321,956 in operating expenses. Of this amount $167,867 was for research and development activities. In addition, $154,089 was spent on selling, general and administrative expenses, primarily payroll expenses, consulting costs, and travel expenses.

Concentric Water Technology LLC

Concentric Water Technology LLC is a development-stage company that is attempting to commercialize water technologies that could solve the technical and cost limitations of traditional water purification methods. The company has not commenced active operations yet.

Critical accounting policies and estimates

The SEC recently issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” (“FRR60”), suggesting companies provide additional disclosure and commentary on those accounting policies considered most critical. FRR 60 considers an accounting policy to be critical if it is important to the Company’s financial condition and results of operations, and requires significant judgment and estimates on the part of management in its application. For a summary of the Company’s significant accounting policies, including the critical accounting policies discussed below, see the accompanying notes to the consolidated financial statements in the section entitled “Financial Statements”.

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates:

The Company recognizes revenue on government contracts when the particular milestone is met and delivered to the customer. Product sales revenue are recognized upon shipment, as titles passes, FOB shipping point. Management fees are recognized as received for services to third party entities.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There is no assurance that actual results will not differ from these estimates.

RESULTS OF OPERATIONS

For the Three Months June 30, 2005 and 2004

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Revenues

Revenues were $188,750 and $100,000 for the three months ended June 30, 2005 and 2004, respectively. The increase in revenues is primarily due to additional billings by Ionfinity to the Navy and Air Force on two Phase II Small Business Innovation Research (“SBIR”) contracts as compared with the same period in the prior year. As explained in Note 7, the operations of MPW are classified as discontinued and revenue and expenses of MPW are shown net, and included in discontinued operations on the consolidated statement of operations.

Cost of Sales

Cost of sales was $102,971 and $10,111 for the three months ended June 30, 2005 and 2004, respectively. The increase in cost of sales is primarily due to additional payroll costs, subcontractor and consultant costs being incurred on Ionfinity’s Air Force and Navy contracts during 2005 as compared with the same period in 2004.

Research and Development

Research and development expenses were $267,311 and $13,544 for the three months ended June 30, 2005 and 2004, respectively. The increase of $253,767 in research and development expenses results primarily from increases in consulting and subcontract expenses incurred by DMFCC and ASI. We expect research and development expenses will continue to increase in the future at DMFCC and ASI and these company’s develop a commercialized product.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $276,913 and $36,648 for the three months ended June 30, 2005 and 2004, respectively. The increase is primarily due to payroll related expenses and higher legal and professional expenses. We expect selling, general and administrative expenses will increase in the future as we expand our business.

For the Six Months June 30, 2005 and 2004

Revenues

Revenues were $235,417 and $100,000 for the six months ended June 30, 2005 and 2004, respectively. The increase in revenues is primarily due to additional billings by Ionfinity to the Navy and Air Force on two Phase II SBIR contracts as compared with the same period in the prior year, as well as contract billings to Caltech/Jet Propulsion Laboratory during 2005. In addition, Ionfinity recognized $11,667 in revenues on a commercial contract during the first six months of 2005 compared with zero for the same period in 2004. As explained in Note 7, the operations of MPW are classified as discontinued and revenue and expenses of MPW are shown net, and included in discontinued operations on the consolidated statement of operations.

Cost of Sales

Cost of sales was $148,095 and $10,111 for the six months ended June 30, 2005 and 2004, respectively. The increase in cost of sales is primarily due to additional payroll costs, subcontractor and consultant costs being incurred on Ionfinity’s Air Force and Navy contracts during 2005 as compared with the same period in 2004.

Research and Development

Research and development expenses were $312,744 and $23,683 for the six months ended June 30, 2005 and 2004, respectively. The increase of $289,061 in research and development expenses results primarily from increases in consulting and subcontract expenses incurred by DMFCC and ASI. We expect research and development expenses

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will continue to increase in the future at DMFCC and ASI as these company’s develop a commercialized product. Furthermore, as additional technologies are acquired and developed by the Company, we anticipate that research and development expenses will increase as commercialization of these technologies begins to take place.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $511,704 and $106,118 for the six months ended June 30, 2005 and 2004, respectively. The increase is primarily due to payroll related expenses and higher legal and professional expenses. We expect selling, general and administrative expenses will increase in the future as we expand our business.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $544,835 for the six months ended June 30, 2005 and was positive $12,083 for the same period in 2004. A net loss of $681,642 has been incurred during 2005 as the Company has incurred higher research and development costs in payroll costs, consultant expenses, and subcontractor costs to create, expand and develop its products. In addition we have incurred substantial selling, general and administrative expenses.

Net cash provided by financing activities during the first six months of 2005 was positive $1,515,902. This is due to a $1,000,000 investment by SNK Capital, a member in ViaSpace LLC, prior to that company’s reverse merger with us. In addition, on June 28, 2005 we received $500,000 from SNK Capital as a deposit for the exercise of a stock option. The stock option agreement was signed and effective on July 14, 2005.

We have incurred losses during the first six months of 2005; however we have adequate financial resources for the next twelve months of operations. In addition, as explained in Note 6, we have granted a stock option to SNK Capital that could raise approximately $9,500,000 of additional funds if and when the option to SNK Capital is exercised. There is no assurance that any portion of this option will be exercised, nor is there any assurance that the Company will be able to raise additional capital, if needed.

Inflation and Seasonality

We have not experienced material inflation during the past five years. Seasonality has historically not had a material effect on our operations.

RISKS RELATED TO OUR FUTURE OPERATIONS

An investment in our common stock involves a high degree of risk. In addition to the other information in this prospectus, you should carefully consider the following risk factors before deciding to invest in shares of our common stock. If any of the following risks actually occurs, it is likely that our business, financial condition and operating results would be harmed. As a result, the trading price of our common stock could decline, and you could lose part or all of your investment.

Risks Related To Our Business

Uncertainty of Market Acceptance and Product Development.

The markets for our technologies are either new or non-existent at the present time. Our success will depend upon the market acceptance of our various products and services. This may require in certain instances a modification to the culture and behavior of customers to be more accepting of technology and automation. Potential customers may be reluctant or slow to adopt changes or new ways of performing processes. There is no assurance that our current or future products or services will gain widespread acceptance or that we will generate sufficient revenues to allow us to ever achieve profitability.

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In addition, our products require continuing improvement and development. Some of our products, whether in the market or in development, may not succeed or may not succeed as intended. As a result, we may need to change our product offerings, discontinue certain products and services or pursue alternative product strategies. There is no assurance that we will be able to successfully improve our current products or that we will continue to develop or market some of our products and services.

Due to uncertainties in our business, the capital on hand may not be sufficient to fund our operations until we achieve positive cash flow.

We have expended and will continue to expend substantial amounts of money for research and development, capital expenditures, working capital needs and manufacturing and marketing of our products and services. Our future research and development efforts, in particular, are expected to include development of additional products and services which will require additional funds. We anticipate that expenditures on research and development will increase as we continue to develop and commercialize our technologies.

The exact timing and amount of spending required cannot be accurately determined and will depend on several factors, including:

• progress of our research and development efforts;

• competing technological and market developments;

• commercialization of products currently under development by us and our competitors; and

• market acceptance and demand for our products and services.

The cost of developing our technologies may require financial resources greater than we current have available. Therefore, in order to successfully complete development of our technologies, we may be required to obtain additional financing. We cannot assure you that additional financing will be available if needed or on terms acceptable to us. If adequate and acceptable financing is not available, we may have to delay development or commercialization of certain of our products and services or eliminate some or all of our development activities. We may also reduce our marketing or other resources devoted to our products and services. Any of these options could reduce our sales growth and result in continued net losses.

If we lose key personnel or are unable to hire additional qualified personnel, it could impact our ability to grow our business.

We believe our future success will depend in large part upon our ability to attract and retain highly skilled technical, managerial, sales and marketing, finance and operations personnel. We face intense competition for all such personnel, and we may not be able to attract and retain these individuals. Our failure to do so could delay product development, affect the quality of our products and services, and/or prevent us from sustaining or growing our business. In addition, employees may leave our company and subsequently compete against us. Our key personnel include Dr. Carl Kukkonen, our Chief Executive Officer, Amjad Abdallat, Chief Operating Officer, and Sandeep Gulati, Director.

We have taken steps to retain our key employees and we have entered into employment agreements with some of our key employees. The loss of key personnel, especially if without advanced notice; could harm our ability to maintain and build our business operations. Furthermore, we have no key man life insurance on any of our key employees.

Our products and services could infringe on the intellectual property rights of others, which may lead to costly litigation, lead to payment of substantial damages or royalties and/or prevent us from manufacturing and selling our current and future products and services.

If third parties assert that our products and services or technologies infringe their intellectual property rights, our reputation and ability to license or sell our products and services could be harmed. Whether or not a claim has merit, it could be time consuming and expensive for us and divert the attention of our technical and management personnel from other work. In addition, these types of claims could be costly to defend and result in our loss of significant intellectual property rights.

A determination that we are infringing the proprietary rights of others could have a material adverse effect on our products and services, revenues and income. In the event of any infringement by us, we cannot assure you that we will

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be able to successfully redesign our products and services or processes to avoid infringement. Accordingly, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling our products and services and could require us to pay substantial damages and royalties.

Risks Related To the Industry

If we fail to successfully introduce new products and services, our future growth may suffer. Our areas of future growth are certain products and services at an early stage of development.

As part of our strategy, we intend to develop and introduce a number of new products and services. Such products and services are currently in research and development. We have generated no revenues from such potential products and services and may never generate revenues. A substantial portion of our resources have been and for the foreseeable future will continue to be dedicated to our research programs and the development of products and services. If we do not introduce these new products and services on a timely basis, or if they are not well accepted by the market, our business and the future growth of our business may suffer. There is no assurance that we will be able to develop a commercial product from these projects. Our competitors may succeed in developing technologies or products and services that are more effective than ours.

If we do not update and enhance our technologies, they will become obsolete or noncompetitive. Our competitors may succeed in developing products and services faster than us.

We operate in a highly competitive industry and competition is likely to intensify. Emerging technologies, extensive research and new product introductions characterize the market for our products and services. We believe that our future success will depend in large part upon our ability to conduct successful research in our fields of expertise, to discover new technologies as a result of that research, to develop products and services based on our technologies, and to commercialize those products and services. If we fail to stay at the forefront of technological development, we will be unable to compete effectively.

Certain of our existing and potential competitors possess substantial financial and technical resources and production and marketing capabilities greater than ours. We cannot assure you that we will be able to compete effectively with existing or potential competitors or that these competitors will not succeed in developing technologies and products and services that would render our technology and products and services obsolete and noncompetitive. Our position in the market could be eroded rapidly by our competitors’ product advances.

Our success depends, in part, on attracting customers who will embrace the new technologies offered by our products and services.

It is vital to our long-term growth that we establish customer awareness and persuade the market to embrace the new technologies offered by our products and services. This may require in certain instances a modification to the culture and behavior of customers to be more accepting of technology and automation. Organizations may be reluctant or slow to adopt changes or new ways of performing processes and instead may prefer to resort to habitual behavior within the organization. Our marketing plan must overcome this obstacle, invalidate deeply entrenched assumptions and reluctance to behavioral change and induce customers to utilize our products and services rather than the familiar options and processes they currently use. If we fail to attract additional customers at this early stage, our business and the future growth of our business may suffer.

Our success depends, in part, on our ability to protect our intellectual property rights.

Our success is heavily dependent upon the development and protection of proprietary technology. We rely on patents, trade secrets, copyrights, know-how, trademarks, license agreements and contractual provisions to establish our intellectual property rights and protect our products and services. These legal means, however, afford only limited protection and may not adequately protect our rights. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Litigation could result in substantial costs and diversion of resources and management attention.

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We cannot assure you that competitors or other parties have not filed or in the future will not file applications for, or have not received or in the future will not receive, patents or obtain additional proprietary rights relating to products and services or processes used or proposed to be used by us. In that case, our competitive position could be harmed and we may be required to obtain licenses to patents or proprietary rights of others.

In addition, the laws of some of the countries in which our products and services are or may be sold may not protect our products and services and intellectual property to the same extent as U.S. laws, if at all. We may be unable to protect our rights in proprietary technology in these countries.

Risks Related To Registration of Stock

Any future sale of a substantial number of shares of our common stock could depress the trading price of our common stock, lower our value and make it more difficult for us to raise capital.

Any sale of a substantial number of shares of our common stock (or the prospect of sales) may have the effect of depressing the trading price of our common stock. In addition, these sales could lower our value and make it more difficult for us to raise capital. Further, the timing of the sale of the shares of our common stock may occur at a time when we would otherwise be able to obtain additional equity capital on terms more favorable to us.

Our stock price is likely to be highly volatile because of several factors, including a limited public float.

The market price of our stock is likely to be highly volatile because there has been a relatively thin trading market for our stock, which causes trades of small blocks of stock to have a significant impact on our stock price. You may not be able to resell our common stock following periods of volatility because of the market’s adverse reaction to volatility.

Other factors that could cause such volatility may include, among other things:

• actual or anticipated fluctuations in our operating results;

• announcements concerning our business or those of our competitors or customers;

• changes in financial estimates by securities analysts or our failure to perform as anticipated by the analysts;

• announcements of technological innovations;

• conditions or trends in the industry;

• introduction or withdrawal of products and services;

• variation in quarterly results due to the fact our revenues are generated by sales to a limited number of customers which may vary from period to period;

• litigation;

• patents or proprietary rights;

• departure of key personnel;

• failure to hire key personnel; and

• general market conditions.

Because our common stock is considered a “penny stock” any investment in our common stock is considered to be a high-risk investment and is subject to restrictions on marketability.

Our common stock is currently traded on the Over-The-Counter Bulletin Board (“OTC Bulletin Board”) and is considered a “penny stock.” The OTC Bulletin Board is generally regarded as a less efficient trading market than the NASDAQ SmallCap Market.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and

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significance of risks of the penny stock market. The broker-dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer and any salesperson in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock.

Since our common stock is subject to the regulations applicable to penny stocks, the market liquidity for our common stock could be adversely affected because the regulations on penny stocks could limit the ability of broker-dealers to sell our common stock and thus your ability to sell our common stock in the secondary market. There is no assurance our common stock will be quoted on NASDAQ or the NYSE or listed on any exchange, even if eligible.

We have additional securities available for issuance, including preferred stock, which if issued could adversely affect the rights of the holders of our common stock.

Our articles of incorporation authorize the issuance of 400,000,000 shares of common stock and 5,000,000 shares of preferred stock. The common stock and the preferred stock can be issued by, and the terms of the preferred stock, including dividend rights, voting rights, liquidation preference and conversion rights can generally be determined by, our board of directors without stockholder approval. Any issuance of preferred stock could adversely affect the rights of the holders of common stock by, among other things, establishing preferential dividends, liquidation rights or voting powers. Accordingly, our stockholders will be dependent upon the judgment of our management in connection with the future issuance and sale of shares of our common stock and preferred stock, in the event that buyers can be found therefore. Any future issuances of common stock or preferred stock would further dilute the percentage ownership of our Company held by the public stockholders. Furthermore, the issuance of preferred stock could be used to discourage or prevent efforts to acquire control of our Company through acquisition of shares of common stock.

ITEM 3 – CONTROLS AND PROCEDURES

Our management; with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a–15(e) and 15(d)–15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based upon such evaluation, our chief executive officer and chief financial officer believe that, as of the end of such period, our disclosure controls and procedures are effective in causing materials to be recorded, processed, summarized and reported by our management on a timely basis and to ensure that the quality and timeliness of our public disclosures complies with our Securities and Exchange Commission disclosure obligations.

Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity’s disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.

There were no significant changes in our internal controls or in other factors that could significantly affect these internal controls, known to our chief executive officer or chief financial officer, after the date of the most recent evaluation.

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PART II — OTHER INFORMATION

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 15, 2005, the shareholders and directors of the Company entered into an Agreement and Plan of Merger with ViaSpace Technologies LLC (“VST”). Pursuant to the closing of the Merger Agreement on June 22, 2005, the Company issued 226,800,000 shares of Common Stock to the members of VST in exchange for 100% of the membership units of VST.

On June 15, 2005, the Company, VST and SNK Capital Trust (“SNK”) entered into a stock option agreement granting SNK an option (the “Option”) to purchase up to 36,000,000 shares of common stock of the Company for $0.28 per share, or proceeds of $10,080,000. The option shall expire on (i) July 15, 2005, if less than $500,000 of the Option has been exercised prior to such time; (ii) August 31, 2005, if less than an aggregate of $1,000,000 of the Option has been exercised prior to such time; (iii) February 15, 2006, if less than an aggregate of $2,000,000 of the Option has been exercised prior to such time or (iv) the close of business on February 15, 2007 if the Option has not previously expired. The exercise of this Option may be accelerated at any time at the election of the optionee.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The following resolution was approved on May 4, 2005 by written consent by shareholders representing 71.42% of the issued and outstanding share capital of the company in accordance with the Company’s bylaws:

a. On May 23, 2005, a forward split of its capital stock such as every one share of common stock issued and outstanding prior to the split be exchanged for six post-split shares of common stock.

The following resolutions were approved on May 27, 2005 by written consent by shareholders representing 71.42% of the issued and outstanding share capital of the company in accordance with the Company’s bylaws:

a.	On June 22, 2005, a forward split of its capital stock such as every one share of common stock issued and outstanding prior to the split be exchange for five post-split share of common stock.
b.	On June 15, 2005, the shareholders and directors of the Company entered into an Agreement and Plan of Merger with ViaSpace Technologies LLC (“VST”). Pursuant to the closing of the Merger Agreement on June 22, 2005, the Company issued 226,800,000 shares of Common Stock to the members of VST in exchange for 100% of the membership units of VST.
c.	Subsequent to effective date of the merger with VST, the resulting number of the authorized capital stock of the company will be fixed at 400,000,000 common shares with a par value of $0.001 per share. The authorized preferred capital stock of the company will remain unchanged at 5,000,000 shares with a par value of $0.001 per share.

Item 6. Exhibits.

(a) Exhibits

10.1	Employment Agreement dated October 14, 2004 between DMFCC and Dr. Carl Kukkonen.
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
32.1	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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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VIASPACE Inc. (Registrant)
Date: August 15, 2005	/s/ CARL KUKKONEN
	Carl Kukkonen
	Chief Executive Officer
Date: August 15, 2005	/s/ STEPHEN J. MUZI
	Stephen J. Muzi
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT
(CARL KUKKONEN)

     This Employment Agreement (“Employment Agreement “) is made this 14^th day of October 2004 by and between Direct Methanol Fuel Cell Corporation, a Delaware corporation (the “Company”), and Carl Kukkonen (“Employee”).

     Whereas, Employee is currently employed by the Company as President and Chief Executive Officer and the parties desire to enter into this Employment Agreement to modify and supersede Employee’s current at-will relationship and evidence the terms and conditions of such employment.

     Now, Therefore, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties agree as follows:

     1. Employment. The Company agrees to employ Employee and Employee agrees to be employed by the Company upon the terms and conditions of this Employment Agreement. Employee hereby represents and warrants that neither Employee’s entry into this Employment Agreement nor Employee’s performance of Employee’s obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Employee is a party or by which Employee is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement previously entered into by Employee.

     2. Term of Employment. The term of Employee’s employment under this Employment Agreement will commence on the date hereof and will continue until three years thereafter (the “Initial Employment Term”). The Initial Employment Term and any Renewal Employment Term (as defined herein) shall automatically be renewed and extended on the same terms and conditions contained herein for consecutive one year periods (the “Renewal Employment Terms”), unless not later than ninety (90) days prior to the end of the Initial Employment Term or any Renewal Employment Term, as the case may be, either party shall give written notice to the other party of its election to terminate this Employment Agreement. The Initial Employment Term and the Renewal Employment Terms are hereinafter referred to as the “Employment Term.” Notwithstanding anything to the contrary contained herein, the Employment Term is subject to termination pursuant to Section 9 below.

     3. Position and Responsibilities. Employee will be employed as Chief Executive Officer and President. Employee shall report to and be subject to the direction of the Board of Directors (the “Board”) of the Company. Employee shall perform and discharge such duties and responsibilities for the Company as the Board may from time to time reasonably assign to Employee. During the

Employment Term, Employee shall devote Employee’s full business time, attention, skill and efforts to the faithful performance of Employee’s duties herein, and shall perform the duties and carry out the responsibilities assigned to Employee, to the best of Employee’s ability, in a diligent, trustworthy, businesslike and efficient manner for the purpose of advancing the Company.

     4. Compensation.

     (a) During the Employment Term, the Company shall pay to Employee a base salary at the rate of $225,000 per year, subject to increase from time to time, solely at the discretion of the Board, payable at the Company’s regular employee payroll intervals.

     (b) Employee shall be eligible for an annual performance-based bonus of up to 25% of Employee’s base salary as determined by the Compensation Committee of the Board.

     (c) All compensation payable to Employee hereunder is stated in gross amount and shall be subject to all applicable withholding taxes, other normal payroll and any other amounts required by law to be withheld.

     5. Benefit Plans. During the Employment Term, Employee will be entitled to receive benefits comparable to those provided to the other employees of the Company in similar positions and with similar responsibilities (subject to any applicable waiting periods and other restrictions).

     6. Vacation. Employee shall be entitled to vacation and sick days in accordance with the Company’s vacation policy, but in no event, less than fifteen (15) days of vacation per year.

     7. Confidentiality, Inventions and Non-Solicitation. Employee and the Company have entered into the Confidentiality, Inventions and Non-Solicitation Agreement attached hereto as Schedule A.

     8. Equitable Remedies.

     Employee acknowledges and agrees that the agreements and covenants set forth in Sections 7 are reasonable and necessary for the protection of the Company’s business interests, that irreparable injury will result to the Company if Employee breaches any of the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any such covenants, the Company will have no adequate remedy at law. Employee accordingly agrees that, in the event of any actual or threatened breach by Employee of any of said covenants, the Company will be entitled to immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing in this Section 8 will be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.

     9. Termination.

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     (a) The Company may terminate the Employment Term immediately upon written notice to Employee if there has been a breach of this Employment Agreement by Employee. Without limiting the generality of the preceding sentence, any material breach by Employee of any of Employee’s obligations under Section 7 will be deemed a breach of this Employment Agreement, and any of the following events will also be deemed a material breach of this Employment Agreement:

(i)	Employee’s continued and deliberate neglect of, willful misconduct in connection with the performance of or refusal to perform Employee’s duties in accordance with, Section 3 of this Employment Agreement; or
(ii)	Employee’s personally engaging in illegal conduct which causes material harm to the reputation of the Company or its affiliates; or
(iii)	Employee’s conviction or being found liable for a felony, misdemeanor or gross misdemeanor relating to, an act of dishonesty or fraud against, or a misappropriation of property belonging to, the Company or its affiliates; or
(iv)	Employee’s engagement in substance abuse which substantially impairs his ability to perform the duties and obligations of your employment or causes material harm to the reputation of the Company; or
(v)	Employee personally engaging in any act of moral turpitude that causes material harm to the reputation of the Company; or
(vi)	Employee knowingly and intentionally breaching in any material respect the terms of this Agreement (or any confidentiality agreement or invention or proprietary information agreement with the Company).

     If the Employment Term is terminated by the Company pursuant to this Section 9(a) or in accordance with Section 2, the Company shall have no further obligation hereunder or otherwise with respect to Employee (except payment of Employee’s base salary under Section 4(a) and benefits under Section 5 accrued through the date of termination).

     (b) The Employment Term will terminate upon the death or upon written notice from the Company to Employee upon the Disability (as defined below) of Employee. “Disability” of Employee will be deemed to have occurred whenever Employee has suffered physical or mental illness, injury, or infirmity that prevents Employee from performing, with

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or without reasonable accommodation, Employee’s essential job functions under this Employment Agreement for any ninety (90) days in any one hundred twenty (120) day period and the Company determines in good faith that such illness or other disability is likely to continue for at least the next following thirty (30) days. Employee’s salary prior to the Disability of Employee will be reduced by any benefits Employee receives from disability insurance provided by the Company or pursuant to a plan providing disability benefits maintained by the Company (if any such insurance or plan exists). In the event of termination due to death or Disability, the Employee shall be deemed to have earned the pro rata portion of any bonus for the then current year based on measuring the performance standards to the date of death or onset of the applicable illness, injury or infirmity and then annualizing the same, as determined in the sole discretion of the Company. Except as set forth in the preceding sentence, if the Employment Term is terminated pursuant to this Section 9(b), the Company shall have no further obligation hereunder or otherwise with respect to Employee (except payment of Employee’s base salary under Section 4(a) and benefits under Section 5 accrued through the date of termination).

     (c) The Company may elect to terminate Employee’s employment hereunder without cause upon ten (10) days’ prior written notice; provided that if it does so elect the Company shall continue to pay Employee’s base salary in accordance with Section 4(a) and provide the benefits to Employee in accordance with Section 5 for six (6) months following such termination date. Except as specifically set forth in this Section 9(c), if the Employment Term is terminated pursuant to this Section 9(c), the Company shall have no further obligation hereunder or otherwise with respect to Employee and no options will vest during that time.

     (d) Employee has the power to terminate Employee’s employment with the Company without cause, in which event the Company shall have no further obligation hereunder or otherwise with respect to Employee (except payment of Employee’s base salary under Section 4(a) and benefits under Section 5 accrued through the date of termination).

     (e) Employee has the power to terminate Employee’s employment with the Company for good reason immediately upon written notice to the Company upon the occurrence of any of the following events:

          (i) the Company’s failure to pay the base salary earned by Employee pursuant to Section 4(a) when such base salary has become due and owing, provided that the Company has previously been notified in writing by Employee that the Company has failed to pay Employee such base salary and the Company has failed to cure such violation within thirty (30) days of receiving such notice; or

          (ii) the Company shall materially reduce Employee’s benefits due hereunder, provided that the Company has previously been notified in writing by Employee that the Company has materially reduced Employee’s benefits hereunder and the Company

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has failed to cure such violation within thirty (30) days of receiving such notice; or

     (iii) the Company has assigned Employee duties which are materially inconsistent with his position as contemplated by this Employment Agreement, provided that the Company has previously been notified by Employee that the Company has assigned Employee duties which are materially inconsistent with his position as contemplated by this Employment Agreement and the Company has failed to cure such violation within thirty (30) days of receiving such notice.

If Employee terminates his employment pursuant to this Section 9(e), the Company shall continue to pay Employee’s base salary in accordance with Section 4(a) and provide the benefits to Employee in accordance with Section 5 for the earlier of (i) six (6) months following such termination date; or (ii) the expiration of the then current Employment Term (as provided in Section 2). Except as specifically set forth in this Section 9(c), if the Employment Term is terminated pursuant to this Section 9(c), the Company shall have no further obligation hereunder or otherwise with respect to Employee and no options will vest during that time.

          (f) Termination of the Employment Term in accordance with this Section 9, or expiration of the Employment Term, will not affect the provisions of this Employment Agreement that survive such termination, including, without limitation, the provisions in Sections 7 and will not limit either party’s ability to pursue remedies at law or equity.

          (g) Notwithstanding anything to the contrary herein, no payments shall be due under Section 9(c) above unless and until Employee shall have executed a general release and waiver of claims of the Company, in form reasonably satisfactory to the Company, and the execution of such general release and waiver of claims shall be a condition to Employee’s rights under Section 9(c).

     10. Effect of Prior Agreements. This Employment Agreement contains the entire understanding between the Company and Employee relating to the subject matter hereof and supersedes any prior employment agreement between Employee and the Company or other agreement relating to the subject matter hereof between the Company and Employee including the Offer Letter and any discussions related thereto.

     11. Modification and Waiver. This Employment Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Employment Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

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     12. Severability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with law continue in full force and effect. If any provision of this Employment Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect.

     13. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below:

          If to the Company:

Direct Methanol Fuel Cell Corporation
2400 Lincoln Avenue
Altadena, California 91001
Attn: Legal Department
Telecopy No.: (626) 296-6311

          If to Employee:

Carl Kukkonen
                                        
                                        

     Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 13.

     14. Headings. The headings and other captions in this Employment Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Employment Agreement.

     15. Governing Law. This Employment Agreement has been executed in the State of California, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. The parties hereby consent to the exclusive jurisdiction of the Federal or state courts in Los Angeles County, California in any action or claim arising out of, under or in connection with this Employment Agreement, or the relationship between the parties hereto.

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     16. Waiver of Jury. The Company and the Employee knowingly and voluntarily waive any and all right to a trial by jury in any action or proceeding arising out of, under or in connection with this Employment Agreement, or the relationship between the parties hereto.

     17. Binding Effect. This Employment Agreement will be binding upon and inure to the benefit of Employee, the Company, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Employment Agreement provided that the Company will remain liable to Employee should such assignee fail to perform its obligations under this Employment Agreement.

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     18. No Strict Construction. The language used in this Employment Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person.

     In Witness Whereof, the Company has caused this Employment Agreement to be executed by its duly authorized officer and Employee has signed this Employment Agreement, as of the date first above written.

Direct Methanol Fuel Cell Corporation
By:	/s/ CARL KUKKONEN
	Name: Carl Kukkonen
	Title: CEO
Employee:
	/s/ CARL KUKKONEN
	Carl Kukkonen

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EX-31.1

Exhibit 31.1

VIASPACE INC.
Certification of Chief Executive Officer Pursuant to Section 302 to the Sarbanes-Oxley Act of 2002

I, Carl Kukkonen, President and Chief Executive Officer of VIASPACE Inc., certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of VIASPACE Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officer 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)) for the registrant and we have:

a) 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant’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 based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case o an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2005

/s/ CARL KUKKONEN

Carl Kukkonen

Chief Executive Officer

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EX-31.2

Exhibit 31.2

VIASPACE INC.
Certification of Chief Financial Officer Pursuant to Section 302 to the Sarbanes-Oxley Act of 2002

     I, Stephen J. Muzi, Chief Financial Officer of VIASPACE Inc., certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of VIASPACE Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officer 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)) for the registrant and we have:

a) 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant’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 based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case o an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2005	/s/ STEPHEN J. MUZI
	Stephen J. Muzi
	Chief Financial Officer

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EX-32.1

Exhibit 32.1

VIASPACE INC.

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), each of the undersigned officers of VIASPACE Inc., (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-QSB for the period ending June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), to the best of the undersigned’s knowledge that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 15, 2005	/s/ CARL KUKKONEN
	Carl Kukkonen
	Chief Executive Officer
Date: August 15, 2005	/s/ STEPHEN J. MUZI
	Stephen J. Muzi
	Chief Financial Officer

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