3. RELATED PARTIES

6 Months Ended

Jun. 30, 2013

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, 2013 and December 31, 2012 are Related Party Receivables and Payables. The Related Party Receivables and Payables are detailed below. Sung Hsien Chang is a director and president of the Company and CEO of IPA China and IPA BVI. As discussed in Note 6, 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, 2013 and December 31, 2012, the Company had a receivable due from JJ International Inc. (“JJ”), a company owned by Sung Hsien Chang in the amount of $67,000 and $1,241,000, respectively. This balance consists of the following:

Loan made to JJ by IPA BVI in the amount of $0 and $400,000 at June 30, 2013 and December 31, 2012, respectively.

Advances made to JJ by IPA BVI and VGE. These advances are reduced by expenses that JJ pays on behalf of IPA BVI and VGE. As of June 30, 2013 and December 31, 2012, included in the Due from JJ receivable shown below are net advances made to JJ in the amount of $3,000 and $20,000, respectively. Additionally, at June 30, 2013 is $12,000 owed by IPA BVI to JJ which is included in the related party payables summary below.

Interest accruing on the loan receivable and other outstanding balances due to IPA BVI. For the three months ended June 30, 2013 and 2012, the Company recorded interest income from JJ in the amount of $0 and $9,000, respectively, which is included in Other Income in the Company’s Consolidated Statements of Operations. For the six months ended June 30, 2013 and 2012, the Company recorded interest income from JJ in the amount of $0 and $19,000, respectively, which is included in Other Income in the Company’s Consolidated Statements of Operations. As of June 30, 2013 and December 31, 2012, included in the Due from JJ receivable shown below is cumulative interest charged to JJ in the amount of $0 and $176,000, respectively.

IPA China recorded revenues of $10,000 and $37,000 for sales made to JJ for the three months ended June 30, 2013 and 2012, respectively. IPA China recorded revenues of $64,000 and $44,000 for sales made to JJ for the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013 and December 31, 2012, included in the Due from JJ receivable are trade receivables of $64,000 and $645,000, respectively.

The following table represents a summary of Related Party Receivables at June 30, 2013 and December 31, 2012:

	2013		2012
Short Term
Due from JJ International	$	67,000	$	20,000
Due from employee of IPA China		149,000		146,000
Total short term		216,000		166,000
Long Term
Due from JJ International		―		1,221,000
Due from VIASPACE		40,000		40,000
Total long term		40,000		1,261,000
Total short term and long term	$	256,000	$	1,427,000

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. This amount is due by September 30, 2014.

Related Party Payables

The following table is a summary of Related Party Payables at June 30, 2013 and December 31, 2012:

	2013		2012
Due to employee of IPA China	$	―	$	23,000
Due to Cindy Chang				9,000
Due to JJ International		12,000		―
Total	$	12,000		32,000

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

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

VIASPACE Green Energy Inc. 10-Q