Green Endeavors (GRNE) 10-Q 2015 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q
(Mark One)
X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
OR
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 000-54018
______________________
GREEN ENDEAVORS, INC.
(Exact Name of Registrant as Specified in Its Charter)
______________________
Utah	27-3270121
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
59 W 100 S, 2nd Floor, Salt Lake City, UT	84101
(Address of Principal Executive Offices)	(Zip Code)
(801) 575-8073
Registrant’s Telephone Number, including Area Code
______________________
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
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes X        No
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. (Check one):
Large accelerated filer	Accelerated filer
Smaller reporting company   X	Non-accelerated filer
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes        No  X
On November 4, 2015, approximately 445, 917,936 shares of the registrant’s common stock, $0.0001 par value, were outstanding.

GREEN ENDEAVORS, INC. AND SUBSIDIARIES

INDEX

	PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets - September 30, 2015 (unaudited) and December 31, 2014	1
Condensed Consolidated Statements of Operations – Three and Nine Months Ended
September 30, 2015 and 2014 (unaudited)	2
Condensed Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 2015 and 2014 (unaudited)	3
Notes to Condensed Consolidated Financial Statements	4
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.Controls and Procedures	19
PART I OTHER INFORMATION
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults upon Senior Securities	20
Item 4. [Reserved]	21
Item 5. Other Information	21
Item 6. Exhibits	22
Signatures	23

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
	September 30, 2015			December 31, 2014
	(Unaudited)
Assets
Current Assets:
Cash	$	53,550		$	100,628
Certificate of deposit, restricted		-			28,660
Accounts receivable		12,729			15,764
Inventory		119,172			152,758
Note receivable, related party		202,974			-
Prepaid expenses		26,187			22,800
Notes receivable - current		735			-
Total current assets		415,347			320,610
Property, plant, and equipment, net of accumulated depreciation of $830,115 and $727,328, respectively		307,932			402,152
Other assets		24,475			24,475
Total Assets	$	747,754		$	747,237
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	385,693		$	336,569
Deferred revenue		56,241			62,755
Deferred rent		92,716			103,174
Due to related parties		144,524			77,132
Derivative liability		223,441			31,424
Current portion of notes payable		417,872			181,762
Current portion of notes payable, related party		67,710			52,250
Current portion of capital lease obligations		15,491			21,701
Current portion of convertible notes payable, net of debt discount of $18,514 and $0, respectively		99,486			110,000
Total current liabilities		1,503,174			976,767
Long-Term Liabilities:
Notes payable		34,764			114,147
Notes payable, related party		16,110			-
Convertible notes payable, net of debt discount of $35,718 and $0, respectively		2,782
Capital lease obligations		-			12,945
Convertible debentures, related party, net of debt discount of $32,349 and $41,741, respectively		2,181,242			2,171,850
Total long-term liabilities		2,234,898			2,298,942
Total Liabilities		3,738,072			3,275,709
Stockholders’ Deficit:
Convertible supervoting preferred stock, $0.001 par value, 10,000,000 shares authorized; 10,000,000 shares issued and outstanding at September 30, 2015 and December 31, 2014; no liquidation value		10,000			10,000
Convertible preferred series B stock - $0.001 par value, 2,000,000 shares authorized, 737,307 and 760,488 shares issued and outstanding at September 30, 2015, and December 31, 2014, respectively		738			760
Preferred, undesignated stock - $0.001 par value 3,000,000 shares authorized, no shares issued and outstanding at September 30, 2015, and December 31, 2014		-			-
Common stock, $0.0001 par value, 10,000,000,000 shares authorized; 321,006,247 and 195,414,505 shares issued and outstanding at September 30, 2015, and December 31, 2014, respectively		32,100			19,541
Subscription receivable		(97,050	)		-
Additional paid-in capital		1,060,232			643,547
Accumulated deficit		(3,996,338	)		(3,202,320	)
Total stockholders’ deficit		(2,990,318	)		(2,528,472	)
Total Liabilities and Stockholders’ Deficit	$	747,754		$	747,237
The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Revenue:
Services, net of discounts	$	534,352		$	538,341		$	1,590,009		$	1,783,767
Product, net of discounts		199,290			206,515			603,781			644,963
Total revenue		733,642			744,856			2,193,790			2,428,730
Costs and expenses:
Cost of services		316,872			286,979			941,184			1,000,280
Cost of product		119,153			102,923			347,954			368,430
Depreciation		34,517			33,219			102,787			99,250
General and administrative		336,101			294,513			1,223,199			963,201
Total costs and expenses		806,643			717,634			2,615,124			2,431,161
Income (loss) from operations		(73,001	)		27,222			(421,334	)		(2,431	)
Other income (expenses):
Interest income		422			216			3,989			633
Interest expense		(73,679	)		(14,155	)		(156,470	)		(56,260	)
Interest expense, related parties		(54,474	)		(50,345	)		(147,425	)		(148,705	)
Gain (loss) on derivative fair value adjustment		35,501			128			(46,379	)		32,147
Gain (loss) on derivative due to conversion		-						-
Gain on settlement of debt		-			33,535			110,220			33,535
Loss on settlement of subscription receivable		-			-			(139,304	)		212,194
Other income (expense)		3,737			345			2,685			(2,052	)
Total other income (expenses)		(88,493	)		(30,276	)		(372,684	)		71,492
Income (loss) before income taxes		(161,494	)		(3,054	)		(794,018	)		69,061
Provision for income taxes		-			-			-			-
Net income (loss)	$	(161,494	)	$	(3,054	)	$	(794,018	)	$	69,061
Net income (loss) per common share – basic and diluted
Basic:
Basic earnings per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	0.00
Weighted-average common shares outstanding		283,205,423			195,414,505			266,389,932			188,036,954
Diluted:
Diluted earnings per common share		N/A		$	(0.00	)		N/A		$	0.00
Weighted-average common shares outstanding		283,205,423			195,414,505			266,389,932			2,145,152,298
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
		Nine Months Ended
		September 30, 2015			September 30, 2014
Cash Flows from Operating Activities:
Net income (loss)		$	(794,018	)	$	69,061
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation		102,787			99,250
	Amortization of debt issuance costs		6,362			-
	Amortization of debt discount costs		87,708			31,223
	Stock-based compensation		140,304			-
	Gain on forgiveness of capital lease		(3,223	)		-
	Gain on settlement of debt		139,304			(212,194	)
	Gain on forgiveness of debt		(110,220	)		(33,535	)
	(Gain) loss on derivative liability fair value adjustment		46,379			(32,147	)
	Initial derivative expense		27,178			-
	Changes in operating assets and liabilities:
	Accounts receivable		3,035			3,151
	Accounts receivable  related party		(2,974	)		-
	Notes receivable		(735	)		-
	Certificate of deposit		28,660			-
	Inventory		33,586			(7,476	)
	Prepaid expenses		-			(26,400	)
	Other assets		-			(28,759	)
	Accounts payable and accrued expenses		49,124			115,929
	Due to (from) related parties		67,392			(59,953	)
	Deferred rent		(10,458	)		(5,593	)
	Deferred revenue		(6,514	)		(11,330	)
	Net cash provided by (used in) operating activities		(196,323	)		(98,773	)
Cash Flows from Investing Activities:
Purchases of property, plant, and equipment			(8,567	)		(28,603	)
Payment to related party for note receivable			(200,000	)		-
Net cash used in investing activities			(208,567	)		(28,603	)
Cash Flows from Financing Activities:
Payments made on notes payable			(176,153	)		(58,311	)
Payments made on notes payable, related party			(3,512	)		(38,395	)
Payments made on capital lease obligations			(15,932	)		(13,490	)
Proceeds from issuance of notes payable			326,630			280,821
Proceeds from issuance of notes payable, related party			35,082			-
Proceeds from issuance of convertible notes payable			133,000			-
Proceeds from stock subscriptions			58,697			-
Proceeds from issuance of convertible series B preferred stock			-			75,000
Net cash provided by (used in) financing activities			357,812			245,625
Increase (decrease) in cash			(47,078	)		118,249
Cash at beginning of period			100,628			105,984
Cash at end of period		$	53,550		$	224,233
Supplemental cash flow information:
Cash paid during the period for:
Interest		$	92,849		$	22,157
Non-cash investing and financing activities:
Debt discount on derivative liability, convertible notes		$	132,548		$	-
Common stock issued in conversion of debt					$	945,615
Conversion of Series B preferred shares to common stock		$	1,842		$	2,850
Return of Series B preferred stock		$	14		$	-
Exercised options for subscription receivable		$	295,050		$	-
Settlement of debt		$	35,805		$	-
Conversion of debt		$	29,088		$	-
The accompanying notes are an integral part of these condensed consolidated financial Statements.

3

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

September 30, 2015 (Unaudited)

Note 1 – Nature of Operations and Basis of Presentation

Business Description

Green Endeavors, Inc., (“Green”) owns and operates two hair salons carrying the Aveda™ product line through its wholly-owned subsidiaries Landis Salons, Inc. (“Landis”) and Landis Salons II, Inc. (“Landis II”) in Salt Lake City, Utah. Green also owns and operates Landis Experience Center LLC (“LEC”), an Aveda™ retail store in Salt Lake City, Utah.

Organization

Green Endeavors, Inc. was incorporated under the laws of the State of Delaware on April 25, 2002 as Jasper Holdings.com, Inc. During the year ended December 2004, Green changed its name to Net2Auction, Inc. In July of 2007, Green changed its name to Green Endeavors, Ltd. On August 23, 2010, Green changed its name to Green Endeavors, Inc. and moved the corporate domicile from Delaware to Utah. Green has four classes of stock as follows: common with 10,000,000,000 shares authorized; preferred with 3,000,000 shares authorized; convertible preferred with 2,000,000 shares authorized; and, convertible supervoting preferred with 10,000,000 shares authorized. Green is quoted on the “OTC Pink” marketplace segment under the symbol GRNE.

Green is a more than 50% controlled subsidiary of Sack Lunch Productions, Inc. (“SAKL”). Sack Lunch Productions, Inc. is listed at OTC Markets trading under the symbol SAKL and is not currently a reporting company. Previous to April 15, 2015, SAKL was known as Nexia Holdings, Inc. and was trading under its symbol NXHD.

Landis Salons, Inc., a Utah corporation, was organized on May 4, 2005 for the purpose of operating an Aveda™ Lifestyle Salon. Landis Salons, Inc. is a wholly-owned subsidiary of Green.

Landis Salons II, Inc., a Utah corporation was organized on March 17, 2010 as a wholly-owned subsidiary of Green for the purpose of opening a second Aveda™ Lifestyle Salon.

Landis Experience Center, LLC (“LEC”), a Utah limited liability company, was organized on January 23, 2012 as a wholly-owned subsidiary of Green for the purpose of operating an Aveda™ retail store in the City Creek Mall in Salt Lake City, Utah.

Basis of Presentation

The consolidated financial statements include the accounts of Green and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly-owned by Green.

These statements should be read in conjunction with the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. In particular, the Company’s significant accounting policies were presented as Note 2 to the consolidated financial statements in that Annual Report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed consolidated financial statements for the nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for the 12 months ending December 31, 2015.

Use of Estimates in the Preparation of the Financial Statements

The consolidated financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the amounts of assets and liabilities at the reporting date and the amounts of revenue and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

4

Note 2 – Summary of Significant Accounting Policies

Cash and Cash Equivalents

Investments with original maturities of three months or less at the time of purchase are considered cash equivalents. As of September 30, 2015 and December 31, 2014, Green had no cash equivalents.

Inventory

Inventory consists of items held for resale and is carried at the lower of cost or market. Cost is determined using the first in, first out (“FIFO”) method.

Property, Plant, and Equipment

Property, plant, and equipment are stated at historical cost. Depreciation is generally provided over the estimated useful lives, using the straight-line method, as follows:

Leasehold improvements	Shorter of the lease term or the estimated useful life
Computer equipment and related software	3 years
Furniture and fixtures	3-10 years
Equipment	3-10 years
Vehicle	7 years
Signage	10 years

For the nine month periods ended September 30, 2015 and 2014, Green recorded depreciation expense of $102,787 and $99,250, respectively.

Long-Lived Assets

We periodically review the carrying amount of our long-lived assets for impairment. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. There were no impairments of long-lived assets during the nine month periods ended September 30, 2015 and 2014.

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Revenue Recognition

There are two primary two types of revenue for the Company: 1) providing hair salon services, and 2) selling hair salon products. Revenue is recognized at the time the service is performed or the product is delivered. All revenue sources are domestic. In some cases, such as the sale of gift cards, revenue is deferred until the gift card is redeemed.

5

Deferred Revenue

Deferred revenue arises when customers pay for products and/or services in advance of receiving the product or service. Green’s deferred revenue consists solely of unearned revenue associated with the purchase of gift certificates for which revenue is recognized only when the service is performed or the product is delivered. As of September 30, 2015 and December 31, 2014, deferred revenue was $56,241 and $62,755, respectively.

Advertising

The Company expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. For the nine month period ended September 30, 2015 and 2014, advertising costs amounted to $92,029 and $79,354, respectively.

Stock-Based Compensation

Green recognizes the cost of employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the fair value of the restricted stock award, option, or purchase right and is recognized as expense, less expected forfeitures, over the requisite service period, which typically equals the vesting period. Because the employee is expected to and has historically received shares of common stock on or about the date of the employee stock option grant date as part of the exercise process, the fair value of each stock issuance is determined using the fair value of Green’s common stock on the grant date.

Income Taxes

Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Also, Green's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Green is 100% consolidated into its parent company, SAKL, and therefore does not file an income tax return. Its financial amounts are consolidated into the SAKL income tax returns. As of September 30, 2015 and December 31, 2014, a 100% valuation allowance has been placed against the deferred tax asset and therefore is not reflected on the balance sheets.

Net Loss Per Share

Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the nine months ended September 30, 2015, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were approximately 6,528,041,422 such potentially dilutive shares excluded as of September 30, 2015.

Reclassification of Financial Statement Accounts

Certain amounts in the December 31, 2014 financial statements have been reclassified to conform to the presentation in the September 30, 2015 financial statements.

Recent Accounting Pronouncements

Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on Green’s consolidated financial position, results of operations or cash flows upon adoption.

6

Note 3 – Inventory

Green’s inventory consists of items held for resale and product that is used in services by the Landis and Landis II salons, and all are considered finished goods. Inventory is carried at the lower of cost or market. As of September 30, 2015 and December 31, 2014, inventory amounted to $119,172 and $152,758, respectively.

Note 4 – Property, Plant, and Equipment

The following is a summary of Green’s Property, plant, and equipment by major category as of September 30, 2015:

	Cost		Accumulated Depreciation		Net
Computer equipment and related software	$	39,247	$	27,936	$	11,311
Construction in process		1,512		-		1,512
Leasehold improvements		639,254		466,884		172,370
Furniture and fixtures		27,201		24,388		2,813
Leased equipment		76,298		50,247		26,051
Equipment		281,188		209,596		71,592
Vehicle		48,193		37,866		10,327
Signage		25,154		13,198		11,956
Total	$	1,138,047	$	830,115	$	307,932

The following is a summary of Green’s Property, plant, and equipment by major category as of December 31, 2014:

	Cost		Accumulated Depreciation		Net
Computer equipment and related software	$	39,247	$	22,189	$	17,058
Construction in process		24,905		-		24,905
Leasehold improvements		625,004		410,010		214,994
Furniture and fixtures		27,201		22,117		5,084
Leased equipment		76,298		38,803		37,495
Equipment		263,478		190,114		73,364
Vehicle		48,193		32,703		15,490
Signage		25,154		11,392		13,762
Total	$	1,129,480	$	727,328	$	402,152

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Note 5 – Fair Value Measurements

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of September 30, 2015 and December 31, 2014, consisted of the following:

	Total fair		Quoted prices		Significant other		Significant
	value at		in active		observable		unobservable
	September 30,		markets		Inputs		inputs
Description	2015		(Level)		(Level 2)		(Level)
Derivative liability (1)	$	223,441	$	-	$	223,441	$	-
	Total fair		Quoted prices		Significant other		Significant
	value at		in active		Observable		unobservable
	December 31,		markets		Inputs		inputs
Description		2014	(Level)		(Level 2)		(Level)
Derivative liability (1)	$	31,424	$	-	$	31,424	$	-

(1)   Derivative liability amounts are due to the embedded derivatives of certain convertible notes payable issued by the Company and are calculated using the Black Scholes pricing model (see Note 6 - Derivative liability)

Note 6 – Derivative Liability

As of September 30, 2015, the Company had a $223,441 derivative liability balance on the balance sheet, and for the nine months ended September 30, 2015, the Company recorded a $46,379 net loss from derivative liability activity. The derivative liability activity comes from convertible notes payable as follows:

Eastshore Enterprises, Inc.

On August 17, 2012, Green issued a $35,000 Convertible Promissory Note to Eastshore Enterprises, Inc. (“Eastshore Note”) that matured August 17, 2014. The Eastshore Note bears interest at a rate of 8% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 54% of the market price (a 46% discount) of the lowest trading price of Green’s common shares during the ten-day period ending one trading day prior to the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the Eastshore Note is carried on Green’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. Green fair values the embedded derivative using the Black-Scholes option pricing model. The fair value of the derivative at the inception date of the Eastshore Note was $63,636. Of the total, $35,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the note. $28,636 was charged to operations as non-cash interest expense. The fair value of $63,636 was recorded as a derivative liability on the balance sheet.

The debt discount for the Eastshore Note is amortized over the life of the note (approximately two years). On September 30, 2015, Green marked-to-market the fair value of the derivative liabilities related to the Eastshore Note and determined an aggregate fair value of $53,101 and recorded a $21,677 loss from change in fair value of derivative for the nine month period ended September 30, 2015. The fair value of the embedded derivative for the note was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 198.34%, (3) risk-free interest rate of 0.08%, (4) expected life of .50 years, and (5) estimated fair value of Green’s common stock of $0.0007 per share.

KBM Worldwide, Inc.

As discussed in Note 8 – “Debt”, on January 26, 2015, Green issued a $64,000 Convertible Promissory Note to KBM Worldwide, Inc. (“KBM Note”) that matures October 28, 2015. The KBM Note bears interest at a rate of 8% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 58% of the market price (a 42% discount) of an average of the three lowest trading price of Green’s common shares during the ten-day period ending one day prior to the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

8

The embedded derivative for the KBM Note is carried on Green’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. Green fair values the embedded derivative using the Black-Scholes option pricing model. The fair value of the derivative at the inception date of the KBM Note was $60,048. Of the total, $60,048 was recorded as a debt discount, which is up to but not more than the net proceeds of the note. $0 was charged to operations as non-cash interest expense. The fair value of $60,048 was recorded as a derivative liability on the balance sheet.

The debt discount for the KBM Note is amortized over the life of the note (approximately nine months). On September 30, 2015, Green marked-to-market the fair value of the derivative liabilities related to the KBM Note and determined an aggregate fair value of $46,549 and recorded a $13,499 gain from changes in the fair value of derivative for the nine month period ended September 30, 2015. The fair value of the embedded derivative for the note was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 205.81%, (3) risk-free interest rate of 0.00%, (4) expected life of .25 years, and (5) estimated fair value of Green’s common stock of $0.0007 per share.

On August 10, 2015, subject to the terms of the convertible note, KBM converted $15,000 of note principle into 23,437,500 shares of the Company’s common stock. On October 19, 2015, subject to the terms of the convertible note, KBM converted $8,025 of note principle into 29,722,222 shares of the Company’s common stock. On October 22, 2015, subject to the terms of the convertible note, KBM converted $7,430 of note principle into 29,720,000 shares of the Company’s common stock. On October 27, 2015, subject to the terms of the convertible note, KBM converted $6,835 of note principle into 29,717,391 shares of the Company’s common stock.

LG Capital Funding, LLC

As discussed in Note 8 – “Debt”, on March 25, 2015, Green issued a $34,000 Convertible Promissory Note to LG Capital Funding, LLC (“LGCF Note”) that matures March 26, 2016. The LGCF Note bears interest at a rate of 8% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 58% of the market price (a 42% discount) of an average of the three lowest trading price of Green’s common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the LGCF Note is carried on Green’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. Green fair values the embedded derivative using the Black-Scholes option pricing model. The fair value of the derivative at the inception date of the LGCF Note was $40,018. Of the total, $34,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the note. $6,018 was charged to operations as non-cash interest expense. The fair value of $40,018 was recorded as a derivative liability on the balance sheet.

The debt discount for the LGCF Note is amortized over the life of the note (approximately twelve months). On September 30, 2015, Green marked-to-market the fair value of the derivative liabilities related to the LGCF Note and determined an aggregate fair value of $48,821 and recorded an $8,803 loss from change in fair value of derivative for the nine month period ended September 30, 2015. The fair value of the embedded derivative for the note was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 193.39%, (3) risk-free interest rate of 0.08%, (4) expected life of 0.48 years, and (5) estimated fair value of Green’s common stock of $0.0007 per share.

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JMJ Financial

As discussed in Note 8 – “Debt”, on July 30, 2015, Green issued a $38,500 Convertible Promissory Note to JMJ Financial (“JMJ Note”) that matures July 30, 2017. The JMJ Note bears interest at a rate of 10% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 60% of the market price (a 40% discount) of an average of the three lowest trading price of Green’s common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the JMJ Note is carried on Green’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. Green fair values the embedded derivative using the Black-Scholes option pricing model. The fair value of the derivative at the inception date of the JMJ Note was $59,660. Of the total, $38,500 was recorded as a debt discount, which is up to but not more than the net proceeds of the note. $21,160 was charged to operations as non-cash interest expense. The fair value of $59,660 was recorded as a derivative liability on the balance sheet.

The debt discount for the JMJ Note is amortized over the life of the note (approximately twenty-four months). On September 30, 2015, Green marked-to-market the fair value of the derivative liabilities related to the JMJ Note and determined an aggregate fair value of $74,970 and recorded a $15,310 loss from change in fair value of derivative for the nine month period ended September 30, 2015. The fair value of the embedded derivative for the note was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 164.67%, (3) risk-free interest rate of 0.64%, (4) expected life of 1.83 years, and (5) estimated fair value of Green’s common stock of $0.0007 per share.

Note 7 – Related Party Transactions

On April 30, 2008, Green entered into a stock transfer agreement with its parent company SAKL and SAKL’s wholly-owned subsidiary DHI whereby they would each sell their holdings in Landis and Newby in exchange for an 8% Series A Senior Subordinated Convertible Debenture with a face amount of $3,000,000. Interest on the debenture commenced on December 30, 2008. DHI has the option, at any time, to convert all or any amount over $10,000 of principal face amount and accrued interest into shares of Common stock, $0.0001 par value per share, at a conversion price equal to 95% of the average closing bid price of the Common stock three days prior to the date notice is received by Green. Green determined that there is a beneficial conversion feature for the debt and recorded a debt discount of $150,000 on April 30, 2008, which is being amortized for 10 years to the maturity date of the debenture. In December 2009, SAKL converted $125,000 of the debenture into common stock of Green and during 2010 Green paid $15,200 of principal on the debenture. During 2010, SAKL sold $500,000 of its holdings of the debenture to unrelated parties for cash thus leaving the related and unrelated party portions of the debenture at $2,359,800 and $500,000, respectively for a total amount of $2,859,800. As of September 30, 2015 and December 31, 2014, the entire amount is considered long-term. The following table shows the related party debenture and the amortized debt discount amounts:

	September 30,			December 31,
	2015			2014
Convertible Debenture - Related Party
Principal amount	$	2,213,591		$	2,213,591
Debt discount		(32,349	)		(41,741	)
Convertible debenture, net of debt discount	$	2,181,242		$	2,171,850

As of September 30, 2015 and December 31, 2014, the principal balance of related party convertible debentures was $2,213,591. As of September 30, 2015 the balance of accrued interest was $54,651 which is included in amounts due to related parties.  As of September 30, 2015 and December 31, 2014, amounts due from related parties were $202,974 and $0, respectively. As of September 31, 2015 and December 31, 2014 amounts due to related parties were $144,524 and $77,132, respectively.

Richard Surber, a related party, is providing his personal guaranty for several lines of credit and credit cards that are being utilized by the Company and its operating subsidiaries. In addition to the above, Mr. Surber is a personal guarantor to notes payable by the Company with remaining principal balances of $104,153. Subsequent to September 30, 2015, Mr. Surber continues to provide his personal guaranty for several lines of credit, credit cards, and loans that are being utilized by the Company and its subsidiaries. The total amount of these credit obligations could exceed the amount of $300,000 from time to time.

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Note 8 –Debt

During the three month period ending September 30, 2015, the Company has entered into two new loan agreements in the total amount of $288,500.

On July 28, 2015, Landis Salons, Inc. issued a promissory note to On Deck Capital, Inc. in the principal amount of $250,000. The note bears interest at the rate of 20% per annum, has a maturity date of October 31, 2016, and requires weekly payments of $4,346.15. The note is personally guaranteed by Richard Surber.  On October 16, 2015, the note balance plus accrued interest was paid in full.

On July 30, 2015, Green issued a $38,500 Convertible Promissory Note to JMJ Financial (“JMJ Note”) that matures July 30, 2017. See the complete description of the JMJ Note at Note 6 above.

As of September 30, 2015, Mr. Surber is a personal guarantor to various notes payable by the Company. Subsequent to September 30, 2015, Mr. Surber continues to provide his personal guaranty for several lines of credit, credit cards, and loans that are being utilized by the Company and its subsidiaries. The total amount of these credit obligations could exceed the amount of $300,000 from time to time.

Note 9 – Stockholders’ Deficit

Preferred Stock

Green is authorized to issue 15,000,000 shares of preferred stock (par value $.001 per share). Green’s preferred stock may be divided into such series as may be established by the Board of Directors. As of September 30, 2015, Green has designated 12,000,000 of the preferred stock into two series as follows: 2,000,000 shares of Convertible Series B Preferred and 10,000,000 shares of Convertible Supervoting Preferred.

The Preferred Stock is classified as equity as long as there are sufficient shares available to effect the conversion. In some instances certain contracts may pass the option to receive cash or common stock to the shareholder. In this case, it is assumed that a cash settlement will occur and balance sheet classification of the affected Preferred Stock and related preferred paid-in capital as a liability.

Convertible Supervoting Preferred Stock

Each share of the Convertible Supervoting Preferred Stock is convertible into 100 shares of Green’s Common stock and has the voting rights equal to 100 shares of common stock.

During the nine month period ended September 30, 2015, there were no issuances or conversions of Convertible Supervoting Preferred shares.

As of both September 30, 2015 and December 31, 2014, Green had 10,000,000 shares of Convertible Supervoting Preferred stock issued and outstanding.

Convertible Series B Preferred Stock

Each share of Green’s Convertible Series B Preferred Stock (Series B) has one vote per share and is convertible into $5.00 worth of common stock. The number of common shares received is based on the average closing bid market price of Green's common stock for the five days before conversion notice date by the shareholder. Series B shareholders, at the option of Green, can receive cash or common stock upon conversion.

On July 8, 2015, the Board of Directors approved the exchange of 5,076 shares of Series B into 13,500,000 shares of the Company’s common stock.

As of September 30, 2015 and December 31, 2014, Green had 737,307 and 760,488 shares of Series B issued and outstanding, respectively.

Common Stock

Green is authorized to issue 10,000,000,000 shares of common stock (par value $0.0001 per share).

Note 10 – Stock-Based Compensation

On December 2, 2011, the Board of Directors approved a stock-based compensation program entitled The 2011 Benefit Plan of Green Endeavors, Inc. (the “Plan”) wherein common stock options are granted to employees. A total of 1,500,000 shares of the Green’s common stock (par value $0.0001) are authorized to be issued or granted to employees (“Employees”) under the Plan. Employees include actual employees or certain non-employee, consultants and advisors of Green, its subsidiaries, and parent company. The Plan is designed to attract and retain employees.

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On January 21, 2015, the Board of Directors approved a stock-based compensation plan entitled The 2015 Benefit Plan of Green Endeavors Inc. (the “2015 Plan”) wherein common stock options are granted to employees of the Company. A total of 80,000,000 shares of the Company’s common stock (par value $0.0001) are authorized to be issued or granted to employees under the 2015 Plan. Employees as designated by the 2015 Plan include actual employees and others, consultants and advisors to the Company, its subsidiaries and the parent company. The 2015 Plan is designed to attract and retain employees.

On July 9, 2015, the Board of Directors approved an amendment to The 2015 Plan wherein an additional 100,000,000 shares were added to the plan.

As of September 30, 2015, the Company has granted 73,500,000 stock options to four employees and one independent contractor for services provided to the Company. The stock based-compensation expense of $140,304 was accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The weighted average components used for the calculation of the fair value for the options granted were approximately between: $0.0032 - $0.0060 exercise price, one year term, 160.93% – 164.25% volatility, and 0.17% – 0.26% risk free rates.

Under the 2015 Plan, the Company has granted stock options to four employees and one independent contractor during the nine months ended September 30, 2015 at option prices ranging from $0.0032 to $0.0060 per share for an aggregate of 73,500,000 shares. Each of the four employees and the consultant exercised the options on the same day they were granted by each issuing a promissory note to the Company  appearing on the balance sheet as subscription receivable of $97,050 as of September 30, 2015. The promissory notes mature 12 months from their issuance date and the Company is entitled to 4% interest per annum. The accrued interest receivable is included in notes receivable – current. For the nine months ended September 30, 2015, there were cancelled grants totaling $139,304. As of September 30, 2015, there were 104,500,000 and 470, 000 shares available for future stock-based compensation grants between the 2015 plan and the 2011 plan, respectively.

Note 11 – Litigation

Southridge Partners II, LP, v. Green Endeavors, Inc. This action was filed on or about August 13, 2014 in the State Courts of Connecticut and was subsequently removed to the United States District Court, District of Connecticut, Case No. 3:13-cv-01358 (SRU). Suit was filed based upon the breach in the payment of promissory note in the face amount of $75,000 and the refusal by Green Endeavors to allow Southridge Partners to convert shares of preferred stock. Green Endeavors filed a counterclaim and an answer denying the claims to damages alleged by Southridge and seeking to recover damages resulting from Southridge’s Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing and Negligent Misrepresentation-Fraud in the Inducement. On January 13, 2015, the parties entered into a Settlement Agreement and Release whereby they have settled the litigation (see Note 9 – “Settlement of Convertible Debt” for details of the agreement) As of September 30, 2015, the $75,000 amount owed to Southridge has been removed from the balance sheet per the settlement agreement.

Note 12 – Concentration of Risk

Supplier Concentrations

The Company purchases most of its salon inventory that is used for service and product sales from Aveda™. Aveda™ product purchases for the nine months ended September 30, 2015 and for the year ended December 31, 2014 accounted for approximately 99% and 99%, respectively, of salon products purchased.

Market or Geographic Area Concentrations

100% of the Company's sales are in the salon services and products market and are concentrated in the Salt Lake City, Utah geographic area.

Note 13 – Going Concern

Generally accepted accounting principles in the United States of America contemplate the continuation of Green as a going concern. As of and for the nine months ended September 30, 2015, Green had negative working capital of $1,087,827 and a net loss of $794,018, respectively, which raises substantial doubt about Green’s ability to continue as a going concern. Green’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to successfully fulfill its business plan. Management plans to attempt to raise additional funds to finance the operating and capital requirements of Green through a combination of equity and debt financings. While Green is making its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be sufficient for operations.

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Note 14 – Subsequent Events

On October 16, 2015, LG Capital Funding LLC, subject to the terms of the convertible note, converted $2,000 of convertible debt principle into 6,351,937 shares of the Company’s common stock.

On October 19, 2015, KBM Worldwide, Inc., subject to the terms of the convertible note, converted $8,025 of convertible debt principle into 29,722,222 shares of the Company’s common stock.

On October 22, 2015, KBM Worldwide, Inc., subject to the terms of the convertible note, converted $7,430 of convertible debt principle into 29,720,000 shares of the Company’s common stock.

On October 23, 2015, LG Capital Funding LLC, subject to the terms of the convertible note, converted $3,500 of convertible debt principle into 13,526,231 shares of the Company’s common stock.

On October 27, 2015, KBM Worldwide, Inc., subject to the terms of the convertible note, converted $6,835 of convertible debt principle into 26,710,000 shares of the Company’s common stock.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q, or this Quarterly Report, and in conjunction with our Form 10-K for the fiscal year ended December 31, 2014 and Form 10-Q for the quarter ended September 30, 2015. Certain of these statements, including, without limitation, statements regarding the extent and timing of future revenues and expenses, customer demand and other statements using words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecast,” “intends,” “may,” “plans,” “projects,” “should,” “will” and “would,” and words of similar import and the negatives thereof, constitute forward-looking statements. These statements are predictions based upon management’s best judgment at the time they are made about future events that are not historical facts. Actual results could vary materially as a result of certain factors, including but not limited to, those expressed in these statements. We refer you to the “Risk Factors,” “Results of Operations,” and “Liquidity and Capital Resources” sections contained in this Quarterly Report, which identify important risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.

We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this Quarterly Report. All subsequent written or oral forward-looking statements attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report. We do not intend, and undertake no obligation, to update these forward-looking statements.

Overview

Green Endeavors, Inc. (“Green”) is a Utah corporation originally formed on April 25, 2002. Our fiscal year ends on December 31. We have never filed bankruptcy nor been through any similar financial reorganization.

As of September 30, 2015, we operate two high-quality hair care salons that feature Aveda™ products for retail sale. Landis Salons, Inc. (“Landis I”) operates its business within a 4,000 square foot space located in the Liberty Heights District of Salt Lake City, Utah as an Aveda™ Lifestyle Salon. Landis Salons II, Inc. (“Landis II”) operates within a 3,024 square foot space located in the Marmalade District of Salt Lake City, Utah under the Landis Lifestyle Salon brand as an Aveda™ Lifestyle Salon. A third location opened August 16, 2012, and operates as an Aveda™ Experience Center ("LEC") in the City Creek Mall in Salt lake City, Utah.

Aveda™ Lifestyle Salons can be distinguished from Aveda™ Concept Salons in that Aveda™ Lifestyle Salons are required to carry all of Aveda’s products and must meet a higher threshold for product sales than Aveda™ Concept Salons. An Aveda™ Lifestyle Salon is the highest level within the Aveda™ hierarchy of salons which is classified by higher purchasing volume, location, array of products carried and size of retail space.

Salon operations consist of three major components, an Aveda™ retail store, an advanced hair salon, and a training academy, which educates and prepares future staff about the culture, services, and products provided by the salon. The design of the salons is intended to look modern and feel comfortable, appealing to both genders, and all age groups.

Additional information on Landis can be found on its website at: www.landissalons.com.

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Critical Accounting Estimates

In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our Consolidated Balance Sheets. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. At least quarterly, we evaluate our assumptions, judgments and estimates and make changes accordingly. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

Results of Operations

The following discussion examines our results of operations and financial condition based on our Condensed Consolidated Financial Statements for the nine month periods ended September 30, 2015 and 2014.

For the nine months ended September 30, 2015, we owned and operated three wholly owned subsidiaries. Two of the subsidiaries, Landis Salons, Inc. and Landis Salons II, Inc., operate as full-service hair and retail salons featuring the Aveda™ line of products. The third subsidiary, Landis Experience Center, LLC, is a retail Aveda™ Experience Center.

Revenue

We generate revenue through the sale of services and products in the hair salon industry. For the three month periods ended September 30, 2015 and 2014, we had net sales of $733,642 and $744,856, respectively. For the nine month periods ended September 30, 2015 and 2014, we had net sales of $2,193,790 and $2,428,730, respectively.

Three months ended September 30, 2015 and 2014

The following table shows the change in service revenue by salon for the three month periods ended September 30, 2015 and 2014:

	Three Months Ended					Increase (Decrease)
	Sept 30,			Sept 30,		Over Prior Period
Salon	2015			2014		Dollar			Percentage
Liberty Heights	$	385,733		$	391,280	$	(5,547	)		-1.4	%
Marmalade		149,114			146,941		2,173			1.8	%
City Creek		(495	)		120		(615	)		(513.0	)%
Total Service Revenue	$	534,352		$	538,341	$	(3,989	)		-0.7	%

As can be seen from the above table our three locations experienced a decline of 0.7% in service revenues for the three month period ending September 30, 2015 over the comparable period of service sales for 2014. This decrease is mostly due to reduced staffing resulting from several of the of the senior stylists, who produce above average revenue, performing other non-revenue producing activities such as training new artists in the Landis II salon as well as attrition and vacations.

The following table shows the change in product revenue by salon for the three month periods ended September 30, 2015 and 2014:

	Three Months Ended				Increase (Decrease)
	Sept 30,		Sept 30,		Over Prior Period
Salon	2015		2014		Dollar			Percentage
Liberty Heights	$	105,063	$	115,333	$	(10,270	)		-8.9	%
Marmalade		44,283		42,667		1,616			3.8	%
City Creek		49,944		48,515		1,429			2.9	%
Total Product Revenue	$	199,290	$	206,515	$	(7,225	)		-3.5	%

As can be seen from the above table our three locations experienced a decline of 3.5% in product revenues for the nine month period ended September 30, 2015 over the comparable period of product sales for 2014. This decline in product revenue growth is primarily due to the Company's senior staff spending more time towards training programs for new artists. This, along with reduced service sales, reduces opportunity available for sales of products.

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Nine months ended September 30, 2015 and 2014

The following table shows the change in service revenue by salon for the nine month periods ended September 30, 2015 and 2014:

	Nine Months Ended				Increase (Decrease)
	Sept 30,		Sept 30,		Over Prior Period
Salon	2015		2014		Dollar			Percentage
Liberty Heights	$	1,160,854	$	1,260,478	$	(99,624	)		-7.9	%
Marmalade		429,155		523,004		(93,849	)		-17.9	%
City Creek		-		285		(285	)		-100.0	%
Total Service Revenue	$	1,590,009	$	1,783,767	$	(193,758	)		-10.9	%

As can be seen from the above table our three locations experienced a decline of 10.9% in service revenues for the nine month period ending September 30, 2015 over the comparable period of service sales for 2014. This decrease is primarily due to reduced staffing resulting from several of the of the senior stylists, who produce above average revenue, performing other non-revenue producing activities such as training new artists in the Landis Salon as well as attrition and vacations.

The following table shows the change in product revenue by salon for the nine month periods ended September 30, 2015 and 2014:

	Nine Months Ended				Increase (Decrease)
	Sept 30,		Sept 30,		Over Prior Period
Salon	2015		2014		Dollar			Percentage
Liberty Heights	$	330,187	$	353,473	$	(23,286	)		-6.6	%
Marmalade		133,159		142,177		(9,018	)		-6.3	%
City Creek		140,435		149,313		(8,878	)		-5.9	%
Total Product Revenue	$	603,781	$	644,963	$	(41,182	)		-6.4	%

As can be seen from the above table our three locations experienced a decline of 6.4% in product revenues for the nine month period ended September 30, 2015 over the comparable period of product sales for 2014. This decline in product revenue growth is primarily due the Company's senior staff spending more time towards training programs for new artists. This, along with reduced service sales, reduces time available for sales of products.

Costs of Revenue

Three months ended September 30, 2015 and 2014

The following table shows cost of revenue by type as a percentage of related revenue for the three month periods ended September 30, 2015 and 2014:

	Three Months Ended
	Sept 30,			Sept 30,
Revenue Type	2015			2014
Services		59.3	%		53.3	%
Product		59.8	%		49.8	%

The above table shows the cost of services revenue increasing by 6% for the three month period ended September 30, 2015 over the comparable period of service sales for 2014. This increase in service cost is primary due to the Company having more administrative staff employed, which generates more payroll expenses. The 10% increase in product costs for the same comparable period is primarily due to an increase in inventory shrinkage.

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Nine months ended September 30, 2015 and 2014

The following table shows cost of revenue by type as a percentage of related revenue for the nine month periods ended September 30, 2015 and 2014:

	Nine Months Ended
	Sept 30,			Sept 30,
Revenue Type	2015			2014
Services		59.2	%		56.1	%
Product		57.6	%		57.1	%

The above table shows the cost of services revenue being 3.1% more for the nine month period ended September 30, 2015 over the comparable period of service sales for 2014. This increase in service cost is primary due to the Company having more administrative staff employed, which generates more payroll expenses. The 0.5% increase in product costs for the same comparable period is primarily due to increased inventory shrinkage.

Operating Expenses

Three months ended September 30, 2015 and 2014

The following table shows general and administrative expenses for the three months ended September 30, 2015 and 2014:

	Three Months Ended
	Sept 30,		Sept 30,
	2015		2014		Change
Salaries and wages	$	116,715	$	105,430	$	11,285
Rent		42,470		49,654		(7,184	)
Advertising		28,426		33,765		(5,339	)
Credit card merchant fees		22,255		9,727		12,528
Insurance		9,914		10,394		(480	)
Utilities and telephone		13,741		14,947		(1,206	)
Professional services		24,250		33,800		(9,550	)
Repairs and maintenance		8,349		6,361		1,988
Dues and subscriptions		4,116		6,752		(2,636	)
Office expense		19,976		10,983		8,993
Travel		7,927		4,315		3,612
Investor relations and company promotion		36,452		490		35,962
Other		1,510		7,896		(6,386	)
Total general and administrative expenses	$	336,101	$	294,514	$	41,587

The above table shows an increase of $41,587 in general and administrative expenses. As can be seen above there are several increases and decreases in the various categories the most notable of which are those of credit card merchant fees and investor relations and company promotion for an aggregate increase of $48,490 in the three month period ended September 30, 2015 compared to the three month period ended September 30, 2014.

Depreciation expense for the three months ended September 30, 2015, was $34,517 compared to $33,219 for the comparable three months ended September 30, 2015. The increase of $1,298 is primarily due to an increase in new equipment.

Nine months ended September 30, 2015 and 2014

The following table shows general and administrative expenses for the six months ended September 30, 2015 and 2014:

	Nine Months Ended
	Sept 30,		Sept 30,		Change
	2015		2014
Salaries and wages	$	450,309	$	324,754	$	125,555
Rent		144,604		155,297		(10,693	)
Advertising		92,029		79,354		12,675
Credit card merchant fees		47,540		30,752		16,788
Insurance		35,363		41,417		(6,054	)
Utilities and telephone		41,440		44,681		(3,241	)
Professional services		161,724		163,466		(1,742	)
Repairs and maintenance		19,063		24,163		(5,100	)
Dues and subscriptions		22,087		19,492		2,595
Office expense		49,316		33,791		15,525
Travel		11,143		9,113		2,030
Investor relations and company promotion		128,915		9,730		119,185
Other		19,666		27,192		(7,526	)
Total General and administrative expenses	$	1,223,199	$	963,201	$	259,998

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The above table shows an increase of $259,998 in general and administrative expenses. As can be seen above there are several increases and decreases in the various categories the most notable of which are those of salaries and wages and investor relations and company promotion for an aggregate increase of $244,740 in the nine month period ended September 30, 2015 compared to the nine month period ended September 30, 2014.

Depreciation expense for the nine months ended September 30, 2015, was $102,787 compared to $99,250 for the comparable nine months ended September 30, 2014. The increase of $3,537 is primarily due to an increase in new equipment purchased.

Other Income (Expense)

Three months ended September 30, 2015 and 2014

Other income (expense) for the three months ended September 30, 2015 was $88,493 compared to $30,276 for the three months ended September 30, 2014, an increase of $58,217. The increase is primarily attributable to an increase in interest expense of $59,524.

Nine months ended September 30, 2015 and 2014

Other expense for the nine months ended September 30, 2015, increased to $372,684 from other income of $71,492 for the comparable nine months ended September 30, 2014, an increase of $444,176 in expenses. The increase is primarily attributable to the derivative fair value adjustment change which created a $78,526 increased loss, an increase of $76,685 in gain on the settlement of debt, and a change in loss on settlement of subscription receivable of $351,498 during the nine month period ending September 30, 2015 compared to the comparable period of 2014.

Liquidity and Capital Resources

Cash and Investments in marketable securities

As of September 30, 2015, our principal source of liquidity consisted of $53,550 of cash, compared to $100,628 as of December 31, 2014. Our primary sources of cash during the nine month period ended September 30, 2015 were customer payments for salon services and products and proceeds from issuance of convertible promissory notes. Our primary uses of cash were for payments relating to salaries, rent, and other general operating expenses as well as payments of notes payable.

Working Capital

We had a working capital deficit of $1,087,827 as of September 30, 2015. Our current assets were $415,347, which consisted of $53,550 in cash, $12,729 in accounts receivable, $119,172 in inventory, $202,974 due from related parties, $26,187 in prepaid expenses and $735 in notes receivable. Our total assets were $747,754, which included $307,932 in property and equipment (net), and $24,475 in other assets. Our current liabilities were $1,503,174, including $385,693 in accounts payable and accrued expenses, $144,524 due to related parties, $709,023 in the current portion of convertible notes, notes payable, and capital leases payable; $148,957 in deferred revenue and rents, and a $223,441 derivative liability. Our long-term liabilities were $2,234,898. Our total stockholders’ deficit at September 30, 2015 was $2,990,318.

Working capital decreased by $431,670 as of September 30, 2015, compared to December 31, 2014 primarily due to the increase in notes payable.

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Cash Flows from Operating Activities

Cash flows from operating activities include net loss, adjusted for certain non-cash charges, as well as changes in the balances of certain assets and liabilities. Net cash used in operating activities for the nine month period ended September 30, 2015 was $196,323 compared to $98,773 used in operating activities for the same period in 2014.

Cash Flows from Investing Activities

Cash flow used in investing activities for the nine months ended September 30, 2015 was $208,567 compared to $28,603 for the nine months ended September 30, 2014, a $179,964 difference. The change was due to fewer purchases of property and equipment, offset by a $200,000 note receivable issued to a related party.

Cash Flows from Financing Activities

Cash flow provided by financing activities for the nine months ended September 30, 2015 was $357,812 compared to $245,625 provided by financing activities for the nine months ended September 30, 2014, a change of $112,187.  The increase is attributable to new debt issuances and proceeds from stock subscriptions, offset by increased payments on notes payable.

Other Factors Affecting Liquidity and Capital Resources

We have insufficient current assets to meet our current liabilities due to negative working capital of $1,087,827 as of September 30, 2015. Historically, we have funded our cash needs from a combination of revenues, carried payables, sales of equity, and debt transactions. Since we are not currently realizing net cash flows from our business, we may need to seek financing to continue our operations. Prospective sources of funding could include shareholder loans, equity sales or loans from other sources though no assurance can be given that such sources would be available or that any commitment of support is forthcoming to date.

8% Series A Senior Subordinated Convertible Redeemable Debentures

On April 30, 2008, we entered into a stock transfer agreement with our parent company SAKL and SAKL’s wholly-owned subsidiary DHI whereby they would each sell their holdings in Landis and Newby in exchange for an 8% Series A Senior Subordinated Convertible Debenture with a face amount of $3,000,000. Interest on the debenture commenced on December 30, 2008. The debenture holder has the option, at any time, to convert all or any amount over $10,000 of principal face amount and accrued interest into shares of Common stock, $0.0001 par value per share, at a conversion price equal to 95% of the average closing bid price of the common stock three days prior to the date we receive notice. In February of 2011, DHI transferred the Debenture to SAKL in exchange for the release of debt obligations owed to SAKL by DHI and SAKL is the current holder of the Debenture.

We do not intend to pay cash dividends in the foreseeable future.

We expect to purchase property or equipment as part of our normal ongoing operations.

Going Concern

Our audit opinion for the year ended December 31, 2014 expressed substantial doubt as to our ability to continue as a going concern as a result of recurring losses and negative working capital. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans to address our ability to continue as a going concern include raising additional funds to finance the operating and capital requirements through a combination of equity and debt financings. While we are making our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.

Impact of Inflation

We compensate some of our salon employees with percentage commissions based on sales they generate. Accordingly, this provides us certain protection against inflationary increases, as payroll expense is a variable cost of sales. In addition, we may increase pricing in our salons to offset any significant increases in wages and cost of services provided. Therefore, we do not believe inflation has had a significant impact on the results of our operations.

Off-Balance Sheet Arrangements

As of September 30, 2015 and December 31, 2014, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies pursuant to Item 305 of Regulation S-K.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, under the supervision and with the participation of our management, including the Chief Executive Officer, or CEO, and the Chief Financial Officer, or CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2015.

The evaluation of our disclosure controls and procedures included a review of our processes and the effect on the information generated for use in this Quarterly Report on Form 10-Q. In the course of this evaluation, we sought to identify any material weaknesses in our disclosure controls and procedures, to determine whether we had identified any acts of fraud involving personnel who have a significant role in our disclosure controls and procedures, and to confirm that any necessary corrective action, including process improvements, was taken. This type of evaluation is performed every fiscal quarter so that our conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. We intend to maintain these disclosure controls and procedures and to modifying them as circumstances warrant.

Based on evaluation as of September 30, 2015, the CEO and CFO have concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in our reports filed or submitted under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Based on management's most recent evaluation of our company's internal control over financial reporting, management determined that there were no changes in our company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting that occurred during the most recent fiscal quarter.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. Internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of internal control are met. Further, the design of internal control must reflect the fact that there are resource constraints, and the benefits of the control must be considered relative to their costs. While our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of their effectiveness, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Green Endeavors, Inc. have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

No material change in any legal matter, as reported in the Annual Report on Form 10-K for the years ended December 31, 2014 and 2013, occurred during the nine months ended September 30, 2015.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the years ended December 31, 2014 and 2013, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On January 21, 2015, the Board of Directors approved a stock-based compensation program entitled The 2015 Benefit Plan of Green Endeavors, Inc. (the “Plan”) wherein common stock options are granted to employees. A total of 80,000,000 shares of the Green’s common stock (par value $0.0001) are authorized to be issued or granted to employees (“Employees”) under the Plan. Employees include actual employees or certain non-employee, consultants and advisors of Green, its subsidiaries, and parent company. The Plan is designed to attract and retain employees. Under the Plan, the Company has granted stock options to three employees during 2015 from January 27, 2015 to April 27, 2015 at option prices ranging from $0.0032 to $0.0060 per share for an aggregate of 60,000,000 shares. Each of the three employees exercised the options on the same day they were granted by each issuing a promissory notes to the Company in the aggregate amount of $274,800 included in subscription receivable. The promissory notes mature in 12 months from their issuance date and the Company is entitled to 4% interest per annum.

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On January 23, 2015, the Board of Directors approved the conversion of 3,900 shares of Series B Preferred Stock held by an investor into 4,924,242 shares of Common Stock. The shares were converted at $0.00396 per share based on the conversion provisions for the Series B Preferred Stock designation.

On July 8, 2015, the Board of Directors approved the exchange of 5,076 shares of Series B into 13,500,000 shares of the Company’s common stock.

On January 26, 2015, pursuant to a Securities Purchase Agreement, Green issued a $64,000 Convertible Promissory Note (the "Note") to KBM Worldwide, Inc. (“KBM”) that matures October 28, 2015. The Note bears interest at a rate of 8% per annum and can be converted into Green’s common shares, at the holder’s option, at the conversion rate of 58% of a market price (a 42% discount) of the average of the three lowest trading price of Green’s common shares during the ten-day period ending one trading day prior to the date of the conversion, subject to a limitation that KBM and its affiliates cannot at any time hold, as a result of conversion, more than 9.99% of the outstanding common stock of Green.

On March 25, 2015, pursuant to a Securities Purchase Agreement, Green issued a $34,000 Convertible Promissory Note (the "Note") to LG Capital Funding, LLC (“LGCF") that matures March 25, 2016. The Note bears interest at a rate of 8% per annum and can be converted into Green’s common shares, at the holder’s option, at the conversion rate of 58% of a market price (a 42% discount) of the average of the three lowest trading price of Green’s common shares during the eighteen-day period ending on the trading day of the conversion notice date, subject to a limitation that LGCF and its affiliates cannot at any time hold, as a result of conversion, more than 9.99% of the outstanding common stock of Green.

On July 30, 2015, pursuant to a Securities Purchase Agreement, Green issued a $38,500 Convertible Promissory Note (the "Note") to JMJ Financial (“JMJ”) that matures July 30, 2017. The Note bears interest at a rate of 10% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 60% of the market price (a 40% discount) of an average of the three lowest trading prices of Green’s common shares during the eighteen-day period ending on the date of the conversion, subject to a limitation that JMJ and its affiliates cannot at any time hold, as a result of conversion, more than 9.99% of the outstanding common stock of Green.

Subsequent Events

In accordance with ASC 855-10 Company management reviewed all material events through the date of this report and there are no additional material subsequent events to report.

On October 13, 2015, LG Capital Funding LLC, subject to the terms of the convertible note, converted $2,000 of convertible debt principle into 6,351,937 shares of the Company’s common stock.

On October 19, 2015, KBM Worldwide, Inc., subject to the terms of the convertible note, converted $8,025 of convertible debt principle into 29,722,222 shares of the Company’s common stock.

On October 22, 2015, KBM Worldwide, Inc., subject to the terms of the convertible note, converted $7,430 of convertible debt principle into 29,720,000 shares of the Company’s common stock.

On October 23, 2015, LG Capital Funding LLC, subject to the terms of the convertible note, converted $3,500 of convertible debt principle into 13,526,231 shares of the Company’s common stock.

On October 27, 2015, subject to the terms of the convertible note, KBM converted $6,835 of note principle into 27,717,391 shares of the Company’s common stock.

Item 3. Defaults Upon Senior Securities

None.

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Item 4. [Reserved]

Item 5. Other Information

None.

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Item 6. Exhibits

(a)   The following exhibits are filed herewith or incorporated by reference as indicated in the table below:

		Incorporated by Reference
Exhibit Number	Description	Form	File Number	Exhibit Number	Filing Date	Provided Herewith
3(i)	Amended and Restated Certificate of Incorporation	10-12G/A	000-54018	3(i)	8/23/2010
3(ii)	Bylaws	10-12G/A	000-54018	3(ii)	8/23/2010
3(iii)	Plan of Merger	8-K	000-54018	3(iii)	8/26/2010
3(iv)	Plan of Merger and Share Exchange	8-K	000-54018	3(iv)	8/31/2010
3(v)	Utah Articles of Incorporation	8-K	000-54018	3(v)	8/31/2010
4(i)	Certificate of Designation for Series B Preferred Stock.	10-12G/A	000-54018	4(i)	8/23/2010
4(ii)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to DHI dated April 30, 2008.	10-12G/A	000-54018	4(ii)	8/23/2010
4(iii)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates, Inc. dated January 15, 2010.	10-12G/A	000-54018	4(iii)	8/23/2010
4(iv)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Desert Vista Capital, LLC. dated January 15, 2010.	10-12G/A	000-54018	4(iv)	8/23/2010
4(v)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates, Inc. dated March 16, 2010.	10-12G/A	000-54018	4(v)	8/23/2010
4(vi)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates dated May 11, 2010.	10-12G/A	000-54018	4(vi)	8/23/2010
4(vii)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Desert Vista Capital, LLC dated May 11, 2010.	10-12G/A	000-54018	4(vii)	8/23/2010
4(viii)	Amended Certificate of Designation for Series B Preferred Stock.	10-12G/A	000-54018	4(viii)	9/22/2010
10(i)	Credit Agreement, October 16, 2015	8-K	000-54018	10(i)	10/22/2015
31.01	Certification of the Registrant’s Chief Executive Officer, Richard D. Surber, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.					X
32.01	Certification of the Registrant’s Chief Executive Officer, Richard D. Surber, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

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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.

	GREEN ENDEAVORS, INC.
	(Registrant)
DATE: November 16, 2015	By: /s/ Richard D. Surber
	Richard D. Surber
	President, Chief Executive Officer, Chief Financial Officer, and Director

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