10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
	For the quarterly period ended June 30, 2014

or

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _________________ to _________________

Commission File Number 000-54514

VIASPACE GREEN ENERGY INC.

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

British Virgin Islands	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

131 Bells Ferry Lane, Marietta, Georgia  30066

(Address of principal executive offices)

(678) 805-7472

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 10,480,400 shares of $0.001 par value common stock issued and outstanding as of August 11, 2014. 

VIASPACE GREEN ENERGY INC.

INDEX

FISCAL QUARTER ENDED JUNE 30, 2014

		Page
Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2014 (Unaudited ) and December 31, 2013	3
	Consolidated Statements of Operations For the Six Months Ended June 30, 2014 and 2013 (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	5
	Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2014 and 2013 (Unaudited)	6
	Notes to Consolidated Financial Statements June 30, 2014 and December 31, 2013 (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
Part II.	Other Information
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
Signatures		16

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIASPACE GREEN ENERGY INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2014			December 31, 2013
	(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	203,000		$	144,000
Accounts receivable		234,000			59,000
Inventory		222,000			225,000
Prepaid expenses		27,000			26,000
Related party receivables		43,000			135,000
Other current assets		9,000			10,000
TOTAL CURRENT ASSETS		738,000			599,000
FIXED ASSETS, net		943,000			1,013,000
OTHER ASSETS:
Land use rights, net		651,000			702,000
License to grass, net		364,000			376,000
Goodwill		602,000			602,000
Marketable securities		1,425,000			1,791,000
Related party receivables		–			40,000
Other assets		10,000			10,000
TOTAL OTHER ASSETS		3,052,000			3,521,000
TOTAL ASSETS	$	4,733,000		$	5,133,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	303,000		$	112,000
Related party payables		166,000			63,000
Accrued expenses		170,000			208,000
Income taxes payable		27,000			28,000
TOTAL CURRENT LIABILITIES		666,000			411,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value, 50,000,000 shares authorized, 10,480,400 issued and outstanding as of June 30, 2014 and December 31, 2013		10,000			10,000
Additional paid-in capital		17,983,000			17,983,000
Accumulated other comprehensive income		(251,000	)		115,000
Accumulated deficit		(13,675,000	)		(13,386,000	)
Total stockholders’ equity		4,067,000			4,722,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,733,000		$	5,133,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIASPACE GREEN ENERGY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
REVENUES	$	823,000		$	945,000		$	1,030,000		$	1,694,000
REVENUES - RELATED PARTIES		–			10,000			14,000			64,000
TOTAL REVENUE		823,000			955,000			1,044,000			1,758,000
COST OF REVENUES		570,000			614,000			740,000			1,165,000
GROSS PROFIT		253,000			341,000			304,000			593,000
OPERATING EXPENSES
Operations		25,000			34,000			52,000			57,000
Selling, general and administrative		277,000			294,000			585,000			602,000
Total operating expenses		302,000			328,000			637,000			659,000
INCOME (LOSS) FROM OPERATIONS		(49,000	)		13,000			(333,000	)		(66,000	)
OTHER INCOME (EXPENSE)
Other expense		(4,000	)		(9,000	)		(4,000	)		(8,000	)
Other income		36,000			6,000			48,000			12,000
Total other income (expense)		32,000			(3,000	)		44,000			4,000
INCOME (LOSS) BEFORE INCOME TAXES		(17,000	)		10,000			(289,000	)		(62,000	)
Income taxes		–			–			–			–
NET INCOME (LOSS)	$	(17,000	)	$	10,000		$	(289,000	)	$	(62,000	)
NET LOSS PER SHARE OF COMMON STOCK – Basic and Diluted	$	0.00		$	0.00		$	(0.03	)	$	(0.01	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – Basic and Diluted		10,480,400			10,480,400			10,480,400			10,480,400

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

VIASPACE GREEN ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
NET INCOME (LOSS)	$	(17,000	)	$	10,000		$	(289,000	)	$	(62,000	)
Other Comprehensive Income:
Unrealized gain (loss) on marketable securities		(257,000	)		(358,000	)		(366,000	)		74,000
Foreign currency translation		–			14,000			–			14,000
Subtotal		(257,000	)		(344,000	)		(366,000	)		88,000
COMPREHENSIVE INCOME (LOSS)	$	(274,000	)	$	(334,000	)	$	(655,000	)	$	26,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIASPACE GREEN ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Six Months Ended June 30,
		2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(289,000	)	$	(62,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		68,000			58,000
Amortization		63,000			29,000
Gain on disposal of fixed assets		(3,000	)		–
Changes in operating assets and liabilities:
Accounts receivable		(175,000	)		(175,000	)
Inventory		2,000			(58,000	)
Related party receivables		131,000			(50,000	)
Prepaid expenses		(1,000	)		(16,000	)
Other assets		1,000			–
Accounts payable		192,000			108,000
Related party payables		103,000			(20,000	)
Accrued expenses		(37,000	)		51,000
Income tax payable		(1,000	)		–
Net cash provided by (used in) operating activities		54,000			(135,000	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of fixed assets		(2,000	)		(41,000	)
Proceeds from disposal of fixed assets		8,000			–
Net cash provided by (used in) investing activities		6,000			(41,000	)
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS		(1,000	)		14,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		59,000			(162,000	)
CASH AND CASH EQUIVALENTS, Beginning of period		144,000			202,000
CASH AND CASH EQUIVALENTS, End of period	$	203,000		$	40,000
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	–		$	–
Income taxes	$	1,000		$	–
Noncash Investing and Financing Activities:
Change in fair value of available-for-sale securities	$	366,000		$	74,000
Available-for-sale securities received for related party receivable	$	–		$	1,221,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIASPACE GREEN ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business – VIASPACE Green Energy Inc., a British Virgin Islands (“BVI”) international business company (“we”, “us”, “VGE” or the “Company”) is a renewable energy company. Our renewable energy is based on biomass -- in particular our dedicated energy crop with the trademarked name “Giant King^® Grass”. VGE is the parent company of Inter Pacific Arts Corporation, a BVI international business company (“IPA BVI”) and Guangzhou Inter Pacific Arts, a People’s Republic of China (“PRC”) company (“IPA China”). IPA China is a wholly-owned foreign enterprise headquartered in Guangdong province of China. IPA BVI owns all equity interests of IPA China. IPA BVI and IPA China specialize in the manufacturing of high quality, copyrighted, wall décor sold in US retail chain stores. IPA China also has a license for and produces Giant King Grass (“GKG”), a proprietary dedicated energy crop, which can be burned in 100% biomass power plants to generate electricity, made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants, generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation, biochemicals and bio plastics. GKG can also be used as animal feed. GKG has been independently tested by customers and been shown to have excellent energy content, high bio methane production, and the cellulosic sugar content needed for biofuels and biochemicals.

We are growing GKG on approximately 457 acres of leased land in China, which serves as a nursery to provide seedlings for large bioenergy projects, a demonstration plantation for potential partners and customers to visit, to provide samples for testing by potential customers, and as a grass source for our own pellet products.

Corporate History – VGE was formed on July 1, 2008. Prior to October 21, 2008, VGE was 100% owned by VIASPACE Inc. (“VIASPACE”) and had no active operations. On October 21, 2008, the majority shareholder of IPA BVI and IPA China, Sung Hsien Chang (“Chang”), entered into a Securities Purchase Agreement (the "Purchase Agreement") with VGE, VIASPACE and China Gate Technology Co., Ltd., a Brunei Darussalam company ("China Gate"). Under the Purchase Agreement, VGE acquired 100% of IPA BVI and the entire equity interest of IPA China from Chang. In exchange, VIASPACE agreed to pay approximately $16 million in cash and newly issued shares of VIASPACE and VGE stock. In addition, VIASPACE issued shares of its common stock to China Gate for China Gate’s sublicense of certain grass technology to IPA China. On September 30, 2012, VIASPACE, VGE and Chang entered into a recapitalization agreement whereby VIASPACE returned the shares it owned in VGE back to VGE, and VGE subsequently issued 8,384,320 shares to Changs, LLC, a limited liability company controlled by Chang. These shares represented 80% of the outstanding shares of VGE. The shares were issued to Changs, LLC during the fourth quarter of 2012. As of June 30, 2014 and December 31, 2013, Changs, LLC owned 80% of the outstanding shares of the Company.

Basis of Presentation - The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Results for interim periods should not be considered indicative of results for a full year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The accounting policies used in preparing these consolidated financial statements are the same as those described in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of the consolidated 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 revenues and expenses during the reporting period. Significant estimates are required as part of determining the allowance for doubtful accounts, estimated lives of property and equipment and intangibles, and long-lived asset impairments. Actual results and outcomes may materially differ from management’s estimates and assumptions.

NOTE 2 – MARKETABLE SECURITIES, AVAILABLE FOR SALE

The Company owns common shares of VIASPACE Inc., a company quoted on the OTC Capital Markets under the symbol “VSPC”. Prior to the separation of the Company from VIASPACE on September 30, 2012, the Company accounted for the common shares it held in VIASPACE, its parent company, on a cost basis. Subsequent to the separation, the Company has determined that its VSPC shares are available-for-sale securities in accordance with ASC Topic 320-10-35-1; therefore, unrealized holding gains and losses are reported as a component of accumulated other comprehensive loss until realized.

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On April 5, 2013, JJ International Inc. (“JJ”), a related party of the Company, entered into a Payment of Obligation and Limited Release Agreement (the “Agreement”) with VGE, IPA BVI and IPA China, whereby the parties agreed that JJ would give the Company 78,801,687 common shares of VIASPACE Inc., in full satisfaction of certain outstanding receivables. The number of common shares given by JJ was determined based on a closing price of $0.0155 of VIASPACE Inc. common stock on that date and had a fair market value of $1,221,426 on the date of the Agreement. No gain or loss was generated as there is no difference between the fair value of the shares received and the related party receivables settled.

As of June 30, 2014, the Company owned 135,691,337 common shares of VSPC, with an estimated fair value of $1,425,000, which is based on the closing price of VSPC’s common stock on June 30, 2014. For the three months ended June 30, 2014, the Company recorded an unrealized holding loss of approximately $257,000, as a component of accumulated other comprehensive loss on the consolidated balance sheet. For the six months ended June 30, 2014, the Company recorded an unrealized holding loss of approximately $366,000, as a component of accumulated other comprehensive loss on the consolidated balance sheet.

The Company’s investments owned by level within the fair value hierarchy at June 30, 2014 and December 31, 2013 are as follows:

Assets	Fair value				Fair value Hierarchy
	June 30, 2014		December 31, 2013
Stocks	$	1,425,000	$	1,791,000	Level 1

Below is a summary of changes in the Company’s investment in VSPC for the six months ended June 30, 2014:

	2014
Balance as January 1, 2014	$	1,791,000
Additional shares received at fair market value to settle related party receivables		–
Subtotal		1,791,000
Change in unrealized loss included in comprehensive income		(366,000	)
Balance as of June 30, 2014	$	1,425,000

NOTE 3 – RELATED PARTIES

Other than as listed below, we have not been a party to any significant transactions, proposed transactions, or series of transactions, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest.

Related Party Receivables

Included in the Company’s consolidated balance sheets at June 30, 2014 and December 31, 2013 are Related Party Receivables and Payables. The Related Party Receivables and Payables are as follows. Sung Hsien Chang is a director and president of the Company and CEO of IPA China and IPA BVI. Chang is also an owner of JJ. As discussed in Note 2, JJ paid down $1,221,426 of the amount owed to the Company on April 5, 2013 with shares of VSPC common stock. As of June 30, 2014 and December 31, 2013, the Company had a receivable due from JJ in the amount of $3,000 and $105,000, respectively. This balance consists of the following:

· Advances are made to JJ by IPA BVI and VGE. Expenses that JJ pays on behalf of IPA BVI and VGE reduce these advances.  As of June 30, 2014 and December 31, 2013, included in the Due from JJ receivable shown below are net advances made to JJ by VGE in the amount of $3,000 and $6,000, respectively.  Additionally, at June 30, 2014 and December 31, 2013, $52,000 and $56,000, respectively, owed by IPA BVI to JJ is included in the related party payables summary below.

· IPA China recorded revenues of zero and $10,000 for sales made to JJ for the three months ended June 30, 2014 and 2013, respectively. IPA China recorded revenues of $14,000 and $64,000 for sales made to JJ for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, $61,000 is owed by IPA China to JJ and is included in the related party payables summary below.  As of December 31, 2013, included in the Due from JJ receivable are trade receivables of $99,000.

8

The following table represents a summary of Related Party Receivables at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Short Term
Due from JJ International	$	3,000	$	105,000
Due from employee of IPA China		–		30,000
Due from VIASPACE		40,000		–
Total short term		43,000		135,000
Long Term
Due from VIASPACE		–		40,000
Total long term		–		40,000
Total short term and long term	$	43,000	$	175,000

VIASPACE has agreed to pay the Company $40,000 as reimbursement for legal fees and costs in connection with the separation of the Company and VIASPACE in 2012. This amount is due by September 30, 2014.

Related Party Payables

The following table is a summary of Related Party Payables at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Due to Cindy Chang	$	14,000	$	7,000
Due to JJ International		113,000		56,000
Due to employee of IPA China		39,000		–
Total	$	166,000	$	63,000

On October 1, 2012, IPA BVI and VGE entered into an office lease agreement with Cindy Chang, spouse of Sung Hsien Chang, whereby IPA BVI and VGE would each pay to Cindy Chang $1,200 per month for rent on the Company’s headquarters in Marietta, Georgia. For the three months ended June 30, 2014 and 2013, the Company recorded rent expense of $7,200 under this lease for each period. For the six months ended June 30, 2014 and 2013, the Company recorded rent expense of $14,400 under this lease for each period.

NOTE 4 – OPERATING SEGMENTS

The Company evaluates its reportable segments in accordance with FASB ASC Topic 280 “Disclosures about Segments of an Enterprise and Related Information”. As of June 30, 2014, the Company’s President, Sung Hsien Chang, was the Company’s Chief Operating Decision Maker (“CODM”) pursuant to FASB ASC Topic 280. The CODM allocates resources to the segments based on their business prospects, product development and engineering, and marketing and strategy.

The Company operates in two reportable segments:

Framed-Artwork Segment:

(i) IPA China and IPA BVI: Specialize in manufacturing high-quality, copyrighted, framed artwork in the PRC which is sold to retail stores in the US.

Grass Segment:

(i) VGE (but not including operations of its subsidiaries, IPA China and IPA BVI): VGE grows a fast-growing, high yield, low carbon, nonfood energy crop called Giant King Grass (“GKG”) in the PRC. GKG can be burned in 100% biomass power plants to generate electricity; made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants; generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation. GKG can also be used as animal feed.  On September 30, 2012, VGE obtained a worldwide sublicense regarding GKG from IPA China.  On the same date, VGE then entered into a sublicense agreement with VIASPACE whereby VGE retains the exclusive rights to the GKG license in China and Taiwan, and VIASPACE has an exclusive GKG worldwide license outside of China and Taiwan.  The sublicense agreement has milestones that VIASPACE must meet every two years in order to retain rights to the sublicense.

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The accounting policies of the reportable segments are described in the summary of significant accounting policies (see Note 1 to these financial statements). The Company evaluates segment performance based on income (loss) from operations excluding infrequent and unusual items.

Information on reportable segments for the three and six months ended June 30, 2014 and 2013 are shown below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Framed-Artwork	$	823,000		$	954,000		$	1,038,000		$	1,737,000
Grass		–			1,000			6,000			21,000
Total	$	823,000		$	955,000		$	1,044,000		$	1,758,000
Income (Loss) From Operations:
Framed-Artwork	$	125,000		$	200,000		$	51,000		$	307,000
Grass		(174,000	)		(187,000	)		(384,000	)		(373,000	)
Income (Loss) From Operations	$	(49,000	)	$	13,000		$	(333,000	)	$	(66,000	)
Depreciation and amortization:
Framed-Artwork	$	26,000		$	22,000		$	52,000		$	43,000
Grass		39,000			22,000			79,000			44,000
Total	$	65,000		$	44,000		$	131,000		$	87,000

	June 30, 2014		December 31, 2013
Assets:
Framed-Artwork	$	3,633,000	$	3,877,000
Grass		1,100,000		1,256,000
Total Assets	$	4,733,000	$	5,133,000

	June 30, 2014		December 31, 2013
Identifiable long-lived assets, net:
Framed-Artwork	$	963,000	$	1,012,000
Grass		995,000		1,079,000
Total Identifiable long-lived assets, net	$	1,958,000	$	2,091,000

For the three months ended June 30, 2014 and 2013, the Company had one customer which made up 99% of our total revenues. For the six months ended June 30, 2014 and 2013, the Company had one customer which made up 98% and 96%, respectively, of our total revenues.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion contains certain statements that may constitute “forward-looking statements.” 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 “Item 1A, Risk Factors” and our other filings with the Securities and Exchange Commission (“SEC”).  The following should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto that appear elsewhere in this Report and in conjunction with our 2013 Annual Report on Form 10-K as filed with the SEC.

Our Business

VIASPACE Green Energy Inc. was incorporated in the British Virgin Islands as an international business company on July 1, 2008. We are a renewable energy company. Our renewable energy is based on biomass -- in particular our dedicated energy crop with the trademarked name “Giant King^® Grass”. We are the parent company of Inter Pacific Arts Corporation and indirect parent company of Guangzhou Inter Pacific Arts.

IPA BVI and IPA China specialize in the manufacturing of high quality, copyrighted, framed artwork sold in US retail chain stores. IPA China also has a license for and produces Giant King Grass, a proprietary dedicated energy crop, which can be burned in 100% biomass power plants to generate electricity, made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants, generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation, biochemicals and bio plastics. GKG can also be used as animal feed. GKG has been independently tested by customers and been shown to have excellent energy content, high bio methane production, and the cellulosic sugar content needed for biofuels and biochemicals.

We are growing GKG on approximately 457 acres of leased land in China, which serves as a nursery to provide seedlings for large bioenergy projects, a demonstration plantation for potential partners and customers to visit, to provide samples for testing by potential customers, and as a grass source for our own pellet products.

Results of Operations

Three Months Ended June 30, 2014 Compared to June 30, 2013

Revenues

Revenues were $823,000 and $955,000 for the three months ended June 30, 2014 and 2013, respectively, a decrease of $132,000, or 14%, due to lower customer orders for artwork in the US. All of revenues recorded during the three months ended June 30, 2014 are from framed artwork sales.  For the three months ended June 30, 2013, framed artwork sales were $954,000 and grass related sales were $1,000.

Cost of Revenues

Costs of revenues were $570,000 and $614,000 for the three months ended June 30, 2014 and 2013, respectively, a decrease of $44,000, or 7%.  Cost of revenues in producing framed artwork were $570,000 and $613,000 for the three months ended June 30, 2014 and 2013, respectively.  Cost of revenues in grass related sales were $1,000 for the three months ended June 30, 2013 and zero for the three months ended June 30, 2014.

Gross Profit

The resulting effect on these changes in revenues and cost of revenues for the three months ended June 30, 2014 compared to the same period in 2013 was a decrease in gross profit from $341,000 (gross margin of 36%) for the three months ended June 30, 2013 to $253,000 (gross margin of 31%) for the three months ended June 30, 2014, a decrease of $88,000, or 26%.

Operations Expenses

Operations expenses were $25,000 and $34,000 for the three months ended June 30, 2014 and 2013, respectively, a decrease of $9,000.  Operations expenses are composed salaries, consulting, plantation costs, travel costs, depreciation, fertilizer, maintenance, utilities and fuel costs associated with growing Giant King Grass.  The decrease is primarily due to lower payroll expenses.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses were $277,000 and $294,000 for the three months ended June 30, 2014 and 2013, respectively, a decrease of $17,000.

Selling expenses decreased $9,000 in the three months ended June 30, 2014 compared with the same period in 2013 due to the lower sales volume for the Company in 2014 compared with 2013. Amortization expense increased $17,000 in 2014 as compared with 2013 due to the Company purchasing an additional land lease in 2013 and incurring amortization on this land lease for the three months ended June 30, 2014 and no comparable amortization in 2013. Travel expense decreased $6,000 in 2014 compared with 2013 due to reduced travel to the PRC in 2014 compared with 2013. Accounting expenses decreased $10,000 in 2014 compared with 2013 due to lower audit fees. Legal fees decreased $8,000 in 2014 compared with 2013 due to lower lawyer fees. Other selling, general and administrative expenses, net, decreased $1,000 during the three months ended June 30, 2014 compared to the same period in 2013.

Loss from Operations

The resulting effect on these changes in gross profits, operations expenses, and selling, general and administrative expenses was an increase in the loss from operations from operating income of $13,000 for the three months ended June 30, 2013 to a loss from operations of $49,000 for the three months ended June 30, 2014, an increase of $62,000.

Of the total amounts, the framed artwork segment had a decrease in income from operations of $75,000 for the three months ended June 30, 2014 compared to the same period in 2013. The grass segment had a decrease in loss from operations of $13,000 for the three months ended June 30, 2014 compared to the same period in 2013.

Six Months Ended June 30, 2014 Compared to June 30, 2013

Revenues

Revenues were $1,044,000 and $1,758,000 for the six months ended June 30, 2014 and 2013, respectively, a decrease of $714,000, or 41%, due to lower customer orders for artwork in the US. For the six months ended June 30, 2014, framed artwork sales were $1,038,000 and grass related sales were $6,000.  For the six months ended June 30, 2013, framed artwork sales were $1,737,000 and grass related sales were $21,000.

Cost of Revenues

Costs of revenues were $740,000 and $1,165,000 for the six months ended June 30, 2014 and 2013, respectively, a decrease of $425,000, or 36%.  Cost of revenues in producing framed artwork were $736,000 and $1,160,000 for the six months ended June 30, 2014 and 2013, respectively.  Cost of revenues in grass related sales were $4,000 and $5, for the six months ended June 30, 2014 and 2013, respectively.  

Gross Profit

The resulting effect on these changes in revenues and cost of revenues for the six months ended June 30, 2014 compared to the same period in 2013 was a decrease in gross profit from $593,000 (gross margin of 34%) for the six months ended June 30, 2013 to $304,000 (gross margin of 30%) for the six months ended June 30, 2014, a decrease of $289,000, or 49%.

Operations Expenses

Operations expenses were $52,000 and $57,000 for the six months ended June 30, 2014 and 2013, respectively, a decrease of $5,000.  Operations expenses are composed salaries, consulting, plantation costs, travel costs, depreciation, fertilizer, maintenance, utilities and fuel costs associated with growing Giant King Grass.  The decrease is primarily due to lower plantation supply costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $585,000 and $602,000 for the six months ended June 30, 2014 and 2013, respectively, a decrease of $17,000.

Selling expenses decreased $24,000 in the six months ended June 30, 2014 compared with the same period in 2013 due to the lower sales volume for the Company in 2014 compared with 2013. Payroll and benefits increased $7,000 for the six month ended June 30, 2014 as compared with the same period in 2013 due to higher health insurance costs. Amortization expense increased $35,000 in 2014 as compared with 2013 due to the Company purchasing an additional land lease in 2013 and incurring amortization on this land lease for the six months ended June 30, 2014 and no comparable amortization in 2013. Travel expense decreased $16,000 in 2014 compared with 2013 due to reduced travel to the PRC in 2014 compared with 2013. Accounting expenses decreased $15,000 in 2014 compared with 2013 due to lower audit fees. Legal fees decreased $5,000 in 2014 compared with 2013 due to lower lawyer fees. Other selling, general and administrative expenses, net, increased $1,000 during the six months ended June 30, 2014 compared to the same period in 2013.

12

Loss from Operations

The resulting effect on these changes in gross profits, operations expenses, and selling, general and administrative expenses was an increase in the loss from operations from $66,000 for the six months ended June 30, 2013 to a loss from operations of $333,000 for the six months ended June 30, 2014, an increase of $267,000.

Of the total amounts, the framed artwork segment had a decrease in income from operations of $256,000 for the six months ended June 30, 2014 compared to the same period in 2013. The grass segment had an increase in loss from operations of $11,000 for the six months ended June 30, 2014 compared to the same period in 2013.

Liquidity and Capital Resources

The Company’s net loss for the six months ended June 30, 2014 was $289,000.   Non-cash expenses totaled $131,000 for the six months ended June 30, 2014 composed of depreciation expense of $68,000 and amortization expense of $63,000. The Company also had a gain on the sale of a vehicle of $3,000 in 2014. Related party receivables and payables, net, provided $234,000 of cash from operating activities. Working capital used $19,000 in 2014.  Total net cash provided by operating activities was $54,000 for the six months ended June 30, 2014.  

Net cash provided by investing activities was $6,000 in 2014 due to proceeds of $8,000 received from the sale of a vehicle and $2,000 that was incurred for purchase of fixed assets in the Company’s framed artwork division.

The Company expects cash on hand as of June 30, 2014 and future operating cash flow to fund operations for a minimum of the next twelve months, and as such, the Company has no immediate need for additional outside financing.  However, if revenue forecasts are not met or if future operating expenses or capital requirements increase beyond our control; the Company may need to seek additional cash resources through the sale of equity securities or debt securities.

Contractual Obligations

The Company does not have any other major outstanding contractual obligations except for the following:

Leases

On October 1, 2012, IPA BVI and VGE entered into an office lease agreement with Cindy Chang, spouse of Company president Sung Chang, whereby IPA BVI and VGE would each pay to Cindy Chang $1,200 per month for rent on the Company’s headquarters in Marietta, Georgia. Previously, no rent was charged to either IPA BVI or VGE. For the three months ended June 30, 2014 and 2013, the Company recorded rent expense of $7,200 under this lease for each period. For the six months ended June 30, 2014 and 2013, the Company recorded rent expense of $14,400 under this lease for each period.

Rent expense of the lease on land in the PRC charged to operations for IPA China for the three months ended June 30, 2014 and 2013 was $9,000 for each period. Rent expense of the lease on land in the PRC charged to operations for IPA China for the six months ended June 30, 2014 and 2013 was $17,000 for each period.

Employment Agreements

On April 19, 2012, our board of directors approved a one-year employment agreement beginning June 1, 2012 for Mr. Chang. Mr. Chang would receive a salary of $240,000 per annum and would also be entitled to a bonus as determined by the VGE Board of Directors, customary insurance and health benefits, 20 business days paid leave per year, and reimbursement for out-of-pocket expenses in the course of his employment. This agreement is still ongoing.

On September 30, 2012, Mr. Muzi signed a consulting agreement with VGE that will pay Mr. Muzi $5,000 monthly to serve as the chief financial officer, treasurer and secretary of the Company. This agreement will automatically renew monthly unless either party terminates the agreement.

13

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.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as of June 30, 2014.   

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information is not required of smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures that are designed for the purpose of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Principal Accounting Officer, as appropriate to allow timely decisions regarding required disclosures.

For the period ended June 30, 2014, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. In the course of this evaluation, our management considered the material weakness in our internal control over financial reporting as discussed in our Annual Report on Form 10-K for the period ended December 31, 2013. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. To overcome this weakness, our principal executive and financial officers have reviewed and provided additional substantive accounting information and data in connection with the preparation of this quarterly report. Therefore, despite the weaknesses identified, our principal executive and financial officers believe that there are no material inaccuracies or omissions of material facts necessary to make the statements included in this report not misleading in light of the circumstances under which they are made.  

Changes in Internal Control over Financial Reporting

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financing reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2014 that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

14

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company does not have any material legal proceedings as of June 30, 2014.

ITEM 1A. RISK FACTORS

There have been no material changes to the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, other than as set forth below:

Risks Related To Our Business

Substantially all of our revenues to date have been to one customer, the loss of which could result in a severe decline in revenues.

For the three months ended June 30, 2014 and 2013, the Company had one customer which made up 99% of our total revenues. For the six months ended June 30, 2014 and 2013, the Company had one customer which made up 98% and 96%, respectively, of our total revenues. We believe that this trend of revenues to one customer will continue in the near future. A loss of any customer by the Company, and in particular, our leading customer, could significantly reduce recognized revenues.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

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	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.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

[SIGNATURES PAGE FOLLOWS]

15

SIGNATURES

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

	VIASPACE GREEN ENERGY INC. (Registrant)
Date: August 11, 2014	By:	/s/ SUNG HSIEN CHANG
		Sung Hsien Chang
		President (Principal Executive Officer)
Date: August 11, 2014	By:	/s/ STEPHEN J. MUZI
		Stephen J. Muzi
		Chief Financial Officer (Principal Financial and Accounting Officer)

16

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Sung Hsien Chang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VIASPACE Green Energy Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

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

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

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

Date:  August 11, 2014	By:	/s/ Sung Hsien Chang
		Sung Hsien Chang
		President
		(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Stephen J. Muzi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VIASPACE Green Energy Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

c. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

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

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.

Date:  August 11, 2014	By:	/s/ Stephen J. Muzi
		Stephen J. Muzi
		Chief Financial Officer
		(principal financial and accounting officer)

EX-32

EXHIBIT 32

CERTIFICATION

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)

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 Green Energy Inc., a British Virgin Islands international company (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended June 30, 2014 as filed with the Securities and Exchange Commission (the “10-Q Report”) that:

(1) the 10-Q 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 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company.        

Date: August 11, 2014	/s/ Sung Hsien Chang
	Sung Hsien Chang
	President (principal executive officer)
Date: August 11, 2014	/s/ Stephen J. Muzi
	Stephen J. Muzi
	Chief Financial Officer (principal financial and accounting officer)

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3. RELATED PARTIES

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTIES

Other than as listed below, we have not been a party to any significant transactions, proposed transactions, or series of transactions, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest.

Related Party Receivables

Included in the Company’s consolidated balance sheets at June 30, 2014 and December 31, 2013 are Related Party Receivables and Payables. The Related Party Receivables and Payables are as follows. Sung Hsien Chang is a director and president of the Company and CEO of IPA China and IPA BVI. Chang is also an owner of JJ. As discussed in Note 2, JJ paid down $1,221,426 of the amount owed to the Company on April 5, 2013 with shares of VSPC common stock. As of June 30, 2014 and December 31, 2013, the Company had a receivable due from JJ in the amount of $3,000 and $105,000, respectively. This balance consists of the following:

· Advances are made to JJ by IPA BVI and VGE. Expenses that JJ pays on behalf of IPA BVI and VGE reduce these advances.  As of June 30, 2014 and December 31, 2013, included in the Due from JJ receivable shown below are net advances made to JJ by VGE in the amount of $3,000 and $6,000, respectively.  Additionally, at June 30, 2014 and December 31, 2013, $52,000 and $56,000, respectively, owed by IPA BVI to JJ is included in the related party payables summary below.

· IPA China recorded revenues of zero and $10,000 for sales made to JJ for the three months ended June 30, 2014 and 2013, respectively. IPA China recorded revenues of $14,000 and $64,000 for sales made to JJ for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, $61,000 is owed by IPA China to JJ and is included in the related party payables summary below.  As of December 31, 2013, included in the Due from JJ receivable are trade receivables of $99,000.

The following table represents a summary of Related Party Receivables at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Short Term
Due from JJ International	$	3,000	$	105,000
Due from employee of IPA China		–		30,000
Due from VIASPACE		40,000		–
Total short term		43,000		135,000
Long Term
Due from VIASPACE		–		40,000
Total long term		–		40,000
Total short term and long term	$	43,000	$	175,000

VIASPACE has agreed to pay the Company $40,000 as reimbursement for legal fees and costs in connection with the separation of the Company and VIASPACE in 2012. This amount is due by September 30, 2014.

Related Party Payables

The following table is a summary of Related Party Payables at June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013
Due to Cindy Chang	$	14,000	$	7,000
Due to JJ International		113,000		56,000
Due to employee of IPA China		39,000		–
Total	$	166,000	$	63,000

On October 1, 2012, IPA BVI and VGE entered into an office lease agreement with Cindy Chang, spouse of Sung Hsien Chang, whereby IPA BVI and VGE would each pay to Cindy Chang $1,200 per month for rent on the Company’s headquarters in Marietta, Georgia. For the three months ended June 30, 2014 and 2013, the Company recorded rent expense of $7,200 under this lease for each period. For the six months ended June 30, 2014 and 2013, the Company recorded rent expense of $14,400 under this lease for each period.

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2. MARKETABLE SECURITIES, AVAILABLE FOR SALE

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

2. MARKETABLE SECURITIES, AVAILABLE FOR SALE

The Company owns common shares of VIASPACE Inc., a company quoted on the OTC Capital Markets under the symbol “VSPC”. Prior to the separation of the Company from VIASPACE on September 30, 2012, the Company accounted for the common shares it held in VIASPACE, its parent company, on a cost basis. Subsequent to the separation, the Company has determined that its VSPC shares are available-for-sale securities in accordance with ASC Topic 320-10-35-1; therefore, unrealized holding gains and losses are reported as a component of accumulated other comprehensive loss until realized.

On April 5, 2013, JJ International Inc. (“JJ”), a related party of the Company, entered into a Payment of Obligation and Limited Release Agreement (the “Agreement”) with VGE, IPA BVI and IPA China, whereby the parties agreed that JJ would give the Company 78,801,687 common shares of VIASPACE Inc., in full satisfaction of certain outstanding receivables. The number of common shares given by JJ was determined based on a closing price of $0.0155 of VIASPACE Inc. common stock on that date and had a fair market value of $1,221,426 on the date of the Agreement. No gain or loss was generated as there is no difference between the fair value of the shares received and the related party receivables settled.

As of June 30, 2014, the Company owned 135,691,337 common shares of VSPC, with an estimated fair value of $1,425,000, which is based on the closing price of VSPC’s common stock on June 30, 2014. For the three months ended June 30, 2014, the Company recorded an unrealized holding loss of approximately $257,000, as a component of accumulated other comprehensive loss on the consolidated balance sheet. For the six months ended June 30, 2014, the Company recorded an unrealized holding loss of approximately $366,000, as a component of accumulated other comprehensive loss on the consolidated balance sheet.

The Company’s investments owned by level within the fair value hierarchy at June 30, 2014 and December 31, 2013 are as follows:

Assets	Fair value				Fair value Hierarchy
	June 30, 2014		December 31, 2013
Stocks	$	1,425,000	$	1,791,000	Level 1

Below is a summary of changes in the Company’s investment in VSPC for the six months ended June 30, 2014:

	2014
Balance as January 1, 2014	$	1,791,000
Additional shares received at fair market value to settle related party receivables		–
Subtotal		1,791,000
Change in unrealized loss included in comprehensive income		(366,000	)
Balance as of June 30, 2014	$	1,425,000

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash and equivalents	$ 203,000	$ 144,000
Accounts receivable	234,000	59,000
Inventory	222,000	225,000
Prepaid expenses	27,000	26,000
Related party receivables	43,000	135,000
Other current assets	9,000	10,000
TOTAL CURRENT ASSETS	738,000	599,000
FIXED ASSETS, NET	943,000	1,013,000
OTHER ASSETS:
Land use right, net	651,000	702,000
License to grass, net	364,000	376,000
Goodwill	602,000	602,000
Marketable securities	1,425,000	1,791,000
Related party receivables	0	40,000
Other assets	10,000	10,000
TOTAL OTHER ASSETS	3,052,000	3,521,000
TOTAL ASSETS	4,733,000	5,133,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	303,000	112,000
Related party payables	166,000	63,000
Accrued expenses	170,000	208,000
Income taxes payable	27,000	28,000
TOTAL CURRENT LIABILITIES	666,000	411,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value, 50,000,000 shares authorized, 10,480,400 issued and outstanding as of June 30, 2014 and December 31, 2013	10,000	10,000
Additional paid-in capital	17,983,000	17,983,000
Accumulated other comprehensive income	(251,000)	115,000
Accumulated deficit	(13,675,000)	(13,386,000)
Total stockholders' equity	4,067,000	4,722,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 4,733,000	$ 5,133,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (289,000)	$ (62,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	68,000	58,000
Amortization	63,000	29,000
Gain on disposal of fixed assets	(3,000)	0
Changes in operating assets and liabilities:
Accounts receivable	(175,000)	(175,000)
Inventory	2,000	(58,000)
Related party receivables	131,000	(50,000)
Prepaid expenses	(1,000)	(16,000)
Other assets	1,000	0
Accounts payable	192,000	108,000
Related party payables	103,000	(20,000)
Accrued expenses	(37,000)	51,000
Income tax payable	(1,000)	0
Net cash provided by (used in) operating activities	54,000	(135,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of fixed assets	(2,000)	(41,000)
Proceeds from disposal of fixed assets	8,000	0
Net cash used in investing activities	6,000	(41,000)
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS	(1,000)	14,000
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS	59,000	(162,000)
CASH AND CASH EQUIVALENTS, Beginning of period	144,000	202,000
CASH AND CASH EQUIVALENTS, End of period	203,000	40,000
Supplemental Disclosure of Cash Flow Information:
Interest	0	0
Income taxes	1,000	0
Noncash Investing and Financing Activities:
Change in fair value of available-for-sale securities	366,000	74,000
Available-for-sale securities received for related party receivable	$ 0	$ 1,221,000

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business – VIASPACE Green Energy Inc., a British Virgin Islands (“BVI”) international business company (“we”, “us”, “VGE” or the “Company”) is a renewable energy company. Our renewable energy is based on biomass -- in particular our dedicated energy crop with the trademarked name “Giant King^® Grass”. VGE is the parent company of Inter Pacific Arts Corporation, a BVI international business company (“IPA BVI”) and Guangzhou Inter Pacific Arts, a People’s Republic of China (“PRC”) company (“IPA China”). IPA China is a wholly-owned foreign enterprise headquartered in Guangdong province of China. IPA BVI owns all equity interests of IPA China. IPA BVI and IPA China specialize in the manufacturing of high quality, copyrighted, wall décor sold in US retail chain stores. IPA China also has a license for and produces Giant King Grass (“GKG”), a proprietary dedicated energy crop, which can be burned in 100% biomass power plants to generate electricity, made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants, generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation, biochemicals and bio plastics. GKG can also be used as animal feed. GKG has been independently tested by customers and been shown to have excellent energy content, high bio methane production, and the cellulosic sugar content needed for biofuels and biochemicals.

We are growing GKG on approximately 457 acres of leased land in China, which serves as a nursery to provide seedlings for large bioenergy projects, a demonstration plantation for potential partners and customers to visit, to provide samples for testing by potential customers, and as a grass source for our own pellet products.

Corporate History – VGE was formed on July 1, 2008. Prior to October 21, 2008, VGE was 100% owned by VIASPACE Inc. (“VIASPACE”) and had no active operations. On October 21, 2008, the majority shareholder of IPA BVI and IPA China, Sung Hsien Chang (“Chang”), entered into a Securities Purchase Agreement (the "Purchase Agreement") with VGE, VIASPACE and China Gate Technology Co., Ltd., a Brunei Darussalam company ("China Gate"). Under the Purchase Agreement, VGE acquired 100% of IPA BVI and the entire equity interest of IPA China from Chang. In exchange, VIASPACE agreed to pay approximately $16 million in cash and newly issued shares of VIASPACE and VGE stock. In addition, VIASPACE issued shares of its common stock to China Gate for China Gate’s sublicense of certain grass technology to IPA China. On September 30, 2012, VIASPACE, VGE and Chang entered into a recapitalization agreement whereby VIASPACE returned the shares it owned in VGE back to VGE, and VGE subsequently issued 8,384,320 shares to Changs, LLC, a limited liability company controlled by Chang. These shares represented 80% of the outstanding shares of VGE. The shares were issued to Changs, LLC during the fourth quarter of 2012. As of June 30, 2014 and December 31, 2013, Changs, LLC owned 80% of the outstanding shares of the Company.

Basis of Presentation - The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Results for interim periods should not be considered indicative of results for a full year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The accounting policies used in preparing these consolidated financial statements are the same as those described in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of the consolidated 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 revenues and expenses during the reporting period. Significant estimates are required as part of determining the allowance for doubtful accounts, estimated lives of property and equipment and intangibles, and long-lived asset impairments. Actual results and outcomes may materially differ from management’s estimates and assumptions.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock shares authorized	50,000,000	50,000,000
Common stock, shares issued	10,480,400	10,480,400
Common stock, shares outstanding	10,480,400	10,480,400

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3. RELATED PARTY TRANSACTIONS (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Related party receivables	$ 43,000	$ 135,000
Related party receivables, long term	0	40,000
Related party receivables	43,000	175,000
Related party payables	166,000	63,000
Cindy Chang
Related party payables	14,000	7,000
JJ International
Related party receivables	3,000	105,000
Related party payables	113,000	56,000
Employee of IPA China
Related party receivables	0	30,000
Related party payables	39,000	0
VIASPACE
Related party receivables	40,000	0
Related party receivables, long term	$ 0	$ 40,000

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 11, 2014
3. LAND USE RIGHT
Entity Registrant Name	VIASPACE Green Energy Inc.
Entity Central Index Key	0001465062
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,480,400
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

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3. RELATED PARTIES (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
Rent expense	$ 7,200	$ 7,200	$ 14,400	$ 14,400

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
REVENUES	$ 823,000	$ 945,000	$ 1,030,000	$ 1,694,000
REVENUES - RELATED PARTIES	0	10,000	14,000	64,000
TOTAL REVENUE	823,000	955,000	1,044,000	1,758,000
COST OF REVENUES	570,000	614,000	740,000	1,165,000
GROSS PROFIT	253,000	341,000	304,000	593,000
OPERATING EXPENSES
Operations	25,000	34,000	52,000	57,000
Selling, general and administrative	277,000	294,000	585,000	602,000
Total operating expenses	302,000	328,000	637,000	659,000
INCOME (LOSS) FROM OPERATIONS	(49,000)	13,000	(333,000)	(66,000)
OTHER INCOME (EXPENSE)
Other expense	(4,000)	(9,000)	(4,000)	(8,000)
Other income	36,000	6,000	48,000	12,000
Total other income (expense)	32,000	(3,000)	44,000	4,000
INCOME (LOSS) BEFORE INCOME TAXES	(17,000)	10,000	(289,000)	(62,000)
Income taxes	0	0	0	0
NET INCOME ( LOSS)	$ (17,000)	$ 10,000	$ (289,000)	$ (62,000)
NET LOSS PER SHARE OF COMMON STOCK - Basic and diluted	$ 0.00	$ 0.00	$ (0.03)	$ (0.01)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and diluted	10,480,400	10,480,400	10,480,400	10,480,400

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2. MARKETABLE SECURITIES, AVAILABLE FOR SALE (Tables)

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Fair value schedule

Assets	Fair value				Fair value Hierarchy
	June 30, 2014		December 31, 2013
Stocks	$	1,425,000	$	1,791,000	Level 1

Changes in investments

	2014
Balance as January 1, 2014	$	1,791,000
Additional shares received at fair market value to settle related party receivables		–
Subtotal		1,791,000
Change in unrealized loss included in comprehensive income		(366,000	)
Balance as of June 30, 2014	$	1,425,000

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Description of Business

Description of Business – VIASPACE Green Energy Inc., a British Virgin Islands (“BVI”) international business company (“we”, “us”, “VGE” or the “Company”) is a renewable energy company. Our renewable energy is based on biomass -- in particular our dedicated energy crop with the trademarked name “Giant King^® Grass”. VGE is the parent company of Inter Pacific Arts Corporation, a BVI international business company (“IPA BVI”) and Guangzhou Inter Pacific Arts, a People’s Republic of China (“PRC”) company (“IPA China”). IPA China is a wholly-owned foreign enterprise headquartered in Guangdong province of China. IPA BVI owns all equity interests of IPA China. IPA BVI and IPA China specialize in the manufacturing of high quality, copyrighted, wall décor sold in US retail chain stores. IPA China also has a license for and produces Giant King Grass (“GKG”), a proprietary dedicated energy crop, which can be burned in 100% biomass power plants to generate electricity, made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants, generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation, biochemicals and bio plastics. GKG can also be used as animal feed. GKG has been independently tested by customers and been shown to have excellent energy content, high bio methane production, and the cellulosic sugar content needed for biofuels and biochemicals.

We are growing GKG on approximately 457 acres of leased land in China, which serves as a nursery to provide seedlings for large bioenergy projects, a demonstration plantation for potential partners and customers to visit, to provide samples for testing by potential customers, and as a grass source for our own pellet products.

Corporate History

Corporate History – VGE was formed on July 1, 2008. Prior to October 21, 2008, VGE was 100% owned by VIASPACE Inc. (“VIASPACE”) and had no active operations. On October 21, 2008, the majority shareholder of IPA BVI and IPA China, Sung Hsien Chang (“Chang”), entered into a Securities Purchase Agreement (the "Purchase Agreement") with VGE, VIASPACE and China Gate Technology Co., Ltd., a Brunei Darussalam company ("China Gate"). Under the Purchase Agreement, VGE acquired 100% of IPA BVI and the entire equity interest of IPA China from Chang. In exchange, VIASPACE agreed to pay approximately $16 million in cash and newly issued shares of VIASPACE and VGE stock. In addition, VIASPACE issued shares of its common stock to China Gate for China Gate’s sublicense of certain grass technology to IPA China. On September 30, 2012, VIASPACE, VGE and Chang entered into a recapitalization agreement whereby VIASPACE returned the shares it owned in VGE back to VGE, and VGE subsequently issued 8,384,320 shares to Changs, LLC, a limited liability company controlled by Chang. These shares represented 80% of the outstanding shares of VGE. The shares were issued to Changs, LLC during the fourth quarter of 2012. As of June 30, 2014 and December 31, 2013, Changs, LLC owned 80% of the outstanding shares of the Company.

Basis of Presentation

Basis of Presentation - The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Results for interim periods should not be considered indicative of results for a full year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The accounting policies used in preparing these consolidated financial statements are the same as those described in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of the consolidated 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 revenues and expenses during the reporting period. Significant estimates are required as part of determining the allowance for doubtful accounts, estimated lives of property and equipment and intangibles, and long-lived asset impairments. Actual results and outcomes may materially differ from management’s estimates and assumptions.

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4. OPERATING SEGMENTS (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Revenues	$ 823,000	$ 955,000	$ 1,044,000	$ 1,758,000
Income (Loss) From Operations	(49,000)	13,000	(333,000)	(66,000)
Depreciation and amortization	65,000	44,000	131,000	87,000
Total Assets	4,733,000		4,733,000		5,133,000
Identifiable long-lived assets	1,958,000		1,958,000		2,091,000
Framed-Artwork
Revenues	823,000	954,000	1,038,000	1,737,000
Income (Loss) From Operations	125,000	200,000	51,000	307,000
Depreciation and amortization	26,000	22,000	52,000	43,000
Total Assets	3,633,000		3,633,000		3,877,000
Identifiable long-lived assets	963,000		963,000		1,012,000
Grass [Member]
Revenues	0	1,000	6,000	20,000
Income (Loss) From Operations	(174,000)	(187,000)	(384,000)	(373,000)
Depreciation and amortization	39,000	22,000	79,000	44,000
Total Assets	1,100,000		1,100,000		1,256,000
Identifiable long-lived assets	$ 995,000		$ 995,000		$ 1,079,000

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2. MARKETABLE SECURITIES, AVAILABLE FOR SALE (Details-Fair value) (Fair Value, Inputs, Level 1 [Member], USD $)	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Inputs, Level 1 [Member]
Stocks	$ 1,425,000	$ 1,791,000

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3. RELATED PARTIES (Tables)

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Receivables

	June 30, 2014		December 31, 2013
Short Term
Due from JJ International	$	3,000	$	105,000
Due from employee of IPA China		–		30,000
Due from VIASPACE		40,000		–
Total short term		43,000		135,000
Long Term
Due from VIASPACE		–		40,000
Total long term		–		40,000
Total short term and long term	$	43,000	$	175,000

Related Party Payables

	June 30, 2014		December 31, 2013
Due to Cindy Chang	$	14,000	$	7,000
Due to JJ International		113,000		56,000
Due to employee of IPA China		39,000		–
Total	$	166,000	$	63,000

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4. OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Reportable Segments

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Framed-Artwork	$	823,000		$	954,000		$	1,038,000		$	1,737,000
Grass		–			1,000			6,000			21,000
Total	$	823,000		$	955,000		$	1,044,000		$	1,758,000
Income (Loss) From Operations:
Framed-Artwork	$	125,000		$	200,000		$	51,000		$	307,000
Grass		(174,000	)		(187,000	)		(384,000	)		(373,000	)
Income (Loss) From Operations	$	(49,000	)	$	13,000		$	(333,000	)	$	(66,000	)
Depreciation and amortization:
Framed-Artwork	$	26,000		$	22,000		$	52,000		$	43,000
Grass		39,000			22,000			79,000			44,000
Total	$	65,000		$	44,000		$	131,000		$	87,000

	June 30, 2014		December 31, 2013
Assets:
Framed-Artwork	$	3,633,000	$	3,877,000
Grass		1,100,000		1,256,000
Total Assets	$	4,733,000	$	5,133,000

	June 30, 2014		December 31, 2013
Identifiable long-lived assets, net:
Framed-Artwork	$	963,000	$	1,012,000
Grass		995,000		1,079,000
Total Identifiable long-lived assets, net	$	1,958,000	$	2,091,000

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2. MARKETABLE SECURITIES, AVAILABLE FOR SALE (Details - Investment summary) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Fair Value Disclosures [Abstract]
Investment in VSPC, beginning balance			$ 1,791,000
Additional shares transferred to Company at fair market value			0
Subtotal	1,791,000		1,791,000
Change in unrealized gain (loss) included in comprehensive income	(257,000)	(358,000)	(366,000)	74,000
Investment in VSPC, ending balance	$ 1,425,000		$ 1,425,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ (17,000)	$ 10,000	$ (289,000)	$ (62,000)
Other Comprehensive Income:
Unrealized gain (loss) on marketable securities	(257,000)	(358,000)	(366,000)	74,000
Foreign currency translation	0	14,000	0	14,000
Subtotal	(257,000)	(344,000)	(366,000)	88,000
COMPREHENSIVE INCOME (LOSS)	$ (274,000)	$ (334,000)	$ (655,000)	$ 26,000

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4. OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

OPERATING SEGMENTS

The Company evaluates its reportable segments in accordance with FASB ASC Topic 280 “Disclosures about Segments of an Enterprise and Related Information”. As of June 30, 2014, the Company’s President, Sung Hsien Chang, was the Company’s Chief Operating Decision Maker (“CODM”) pursuant to FASB ASC Topic 280. The CODM allocates resources to the segments based on their business prospects, product development and engineering, and marketing and strategy.

The Company operates in two reportable segments:

Framed-Artwork Segment:

(i) IPA China and IPA BVI: Specialize in manufacturing high-quality, copyrighted, framed artwork in the PRC which is sold to retail stores in the US.

Grass Segment:

(i) VGE (but not including operations of its subsidiaries, IPA China and IPA BVI): VGE grows a fast-growing, high yield, low carbon, nonfood energy crop called Giant King Grass (“GKG”) in the PRC. GKG can be burned in 100% biomass power plants to generate electricity; made into pellets that can be burned together with coal to reduce carbon emissions from existing power plants; generate bio methane through anaerobic digestion, and can be used as a feedstock for low carbon liquid biofuels for transportation. GKG can also be used as animal feed.  On September 30, 2012, VGE obtained a worldwide sublicense regarding GKG from IPA China.  On the same date, VGE then entered into a sublicense agreement with VIASPACE whereby VGE retains the exclusive rights to the GKG license in China and Taiwan, and VIASPACE has an exclusive GKG worldwide license outside of China and Taiwan.  The sublicense agreement has milestones that VIASPACE must meet every two years in order to retain rights to the sublicense.

The accounting policies of the reportable segments are described in the summary of significant accounting policies (see Note 1 to these financial statements). The Company evaluates segment performance based on income (loss) from operations excluding infrequent and unusual items.

Information on reportable segments for the three and six months ended June 30, 2014 and 2013 are shown below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Framed-Artwork	$	823,000		$	954,000		$	1,038,000		$	1,737,000
Grass		–			1,000			6,000			21,000
Total	$	823,000		$	955,000		$	1,044,000		$	1,758,000
Income (Loss) From Operations:
Framed-Artwork	$	125,000		$	200,000		$	51,000		$	307,000
Grass		(174,000	)		(187,000	)		(384,000	)		(373,000	)
Income (Loss) From Operations	$	(49,000	)	$	13,000		$	(333,000	)	$	(66,000	)
Depreciation and amortization:
Framed-Artwork	$	26,000		$	22,000		$	52,000		$	43,000
Grass		39,000			22,000			79,000			44,000
Total	$	65,000		$	44,000		$	131,000		$	87,000

	June 30, 2014		December 31, 2013
Assets:
Framed-Artwork	$	3,633,000	$	3,877,000
Grass		1,100,000		1,256,000
Total Assets	$	4,733,000	$	5,133,000

	June 30, 2014		December 31, 2013
Identifiable long-lived assets, net:
Framed-Artwork	$	963,000	$	1,012,000
Grass		995,000		1,079,000
Total Identifiable long-lived assets, net	$	1,958,000	$	2,091,000

For the three months ended June 30, 2014 and 2013, the Company had one customer which made up 99% of our total revenues. For the six months ended June 30, 2014 and 2013, the Company had one customer which made up 98% and 96%, respectively, of our total revenues.

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4. OPERATING SEGMENTS (Details Narrative) (Revenues, One Customer)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues | One Customer
Customer concentration from one customer for revenues	99.00%	99.00%	98.00%	96.00%