Quarterly Report (10-q)

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 March 31, 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 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 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. (Check one):
Large accelerated filer o	Accelerated filer o
Smaller reporting company x	Non-accelerated filer o
(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 o No x
On May 26, 2015, approximately 246,568,747 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 - March 31, 2015 (unaudited) and December 31, 2014	1

Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2015 and 2014 (unaudited)	2

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 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	16

Item 3.Quantitative and Qualitative Disclosures About Market Risk	20

Item 4.Controls and Procedures	20

PART I OTHER INFORMATION

Item 1. Legal Proceedings	20

Item 1A. Risk Factors	20

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3. Defaults Upon Senior Securities	21

Item 4. [Reserved]	21

Item 5. Other Information	21

Item 6. Exhibits	22

Signatures	24

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
	March 31, 2015			December 31, 2014
	(unaudited)
Assets
Current Assets:
Cash	$	154,970		$	100,628
Certificate of deposit		-			28,660
Accounts receivable		12,096			15,764
Inventory		142,756			152,758
Prepaid expenses		27,340			22,800
Notes receivable - current		1,034			-
Total current assets		338,196			320,610

Property, plant, and equipment, net of accumulated depreciation of $759,975 and $727,328, respectively		372,958			402,152
Other assets		24,475			24,475
Total Assets	$	735,629		$	747,237

Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	397,201		$	336,569
Deferred revenue		54,020			62,755
Deferred rent		98,441			103,174
Due to related parties		53,373			77,132
Derivative liability		161,870			31,424
Current portion of notes payable		216,194			181,762
Current portion of related party notes payable		58,017			52,250
Current portion of capital leases payable		22,626			21,701
Current portion of convertible notes payable, net of debt discount of $79,516 and $0, respectively		53,484			110,000
Total current liabilities		1,115,226			976,767

Long-Term Liabilities:
Notes payable related party		19,315			-
Notes payable		115,569			114,147
Capital lease obligations		6,928			12,945
Convertible debentures related party, net of debt discount of $38,610 and $41,741, respectively		2,174,981			2,171,850
Total long-term liabilities		2,316,793			2,298,942
Total Liabilities		3,432,019			3,275,709

Stockholders’ Deficit:
Convertible supervoting preferred stock, $0.001 par value, 10,000,000 shares authorized; 10,000,000 and 10,000,000 shares issued and outstanding at March 31, 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, 742,383 and 760,488 shares issued and outstanding at March 31, 2015, and December 31, 2014, respectively		742			760
Preferred, undesignated stock - $0.001 par value 3,000,000 shares authorized, no shares issued and outstanding at March 31, 2015, and December 31, 2014		-			-
Common stock, $0.0001 par value, 10,000,000,000 shares authorized; 246,568,747 and 195,414,505 shares issued and outstanding at March 31, 2015, and December 31, 2014, respectively		24,656			19,541
Subscription Receivable		(198,000	)		-
Additional paid-in capital		946,328			643,547
Accumulated deficit		(3,480,116	)		(3,202,320	)
Total stockholders’ deficit		(2,696,390	)		(2,528,472	)
Total Liabilities and Stockholders’ Deficit	$	735,629		$	747,237

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

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)


	Three Months Ended
	March 31, 2015			March 31, 2014
Revenue:
Services, net of discounts	$	504,517		$	616,567
Product, net of discounts		197,239			220,898
Total revenue		701,756			837,465

Costs and expenses:
Cost of services		297,443			370,484
Cost of product		110,285			128,803
Depreciation		32,648			32,926
General and administrative		464,493			355,262
Total costs and expenses		904,869			887,475
Loss from operations		(203,113	)		(50,010	)

Other income (expenses):
Interest income		1,109			207
Interest expense		(37,962	)		(31,094	)
Interest expense, related parties		(45,739	)		(49,765	)
Gain (loss) on derivative fair value adjustment		(30,380	)		7,766
Gain on settlement of debt		39,195			6,994
Other expense		(906	)		(1,256	)
Total other expenses		(74,683	)		(67,148	)
Loss before income taxes		(277,796	)		(117,158	)
Provision for income taxes		-			-
Net loss	$	(277,796	)	$	(117,158	)

Net loss per common share
Basic and Diluted:
Basic loss per common share	$	(0.00	)	$	(0.00	)
Weighted-average common shares outstanding		226,463,991			173,177,202

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

Green Endeavors, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)


	Three Months Ended March 31,
	2015			2014
Cash Flows from Operating Activities:
Net loss	$	(277,796	)	$	(117,158	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		32,648			32,926
Debt discount amortization		17,663			18,298
Stock based compensation		74,073			-
(Gain) on settlement of debt		(39,195	)		(6,994	)
Gain on derivative liability fair value adjustment		30,380			(7,766	)
Initial derivative expense		6,018
Changes in operating assets and liabilities:
Accounts receivable		3,668			4,358
Notes receivable		(1,034	)		-
Certificate of deposit		28,660			-
Inventory		10,002			(8,693	)
Prepaid expenses		(4,540	)		-
Other assets		-			(15,981	)
Accounts payable and accrued expenses		60,632			101,699
Due to related parties		(23,759	)		61,541
Deferred rent		(4,733	)		(1,307	)
Deferred revenue		(8,735	)		(8,484	)
Net cash provided by (used in) operating activities		(96,048	)		52,439

Cash Flows from Investing Activities:
Purchases of property, plant, and equipment		(3,454	)		(19,473	)
Net cash used in investing activities		(3,454	)		(19,473	)

Cash Flows from Financing Activities:
Payments made on notes payable		(47,026	)		(13,186	)
Payments made on convertible notes payable		-			-
Payments made on related party notes payable		-			(38,395	)
Payments made on related party convertible notes payable		-			-
Payments made on capital lease obligations		(5,092	)		(4,309	)
Proceeds from issuance of notes payable		82,880			12,021
Proceeds from issuance of related party notes payable		25,082			-
Proceeds from issuance of convertible series B preferred stock		98,000			40,000
Net cash provided by (used in) financing activities		153,844			(3,869	)

Increase in cash		54,342			29,097

Cash at beginning of period		100,628			105,984

Cash at end of period	$	154,970		$	135,081

Supplemental cash flow information:
Cash paid during the period for:
Interest	$	56,173		$	5,264
Non-cash investing and financing activities:
Debt discount on derivative liability, convertible notes	$	94,048		$	-
Conversion of Series B preferred stock to common stock	$	492		$	2,350
Return of Series B preferred stock	$	14		$	-
Exercised options for stock subscription	$	198,000		$	-
Issuance of Common stock for settlement of debt	$	35,085		$	-

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

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

March 31, 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 three months ended March 31, 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.

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 March 31, 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.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

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 three month periods ended March 31, 2015 and 2014, Green recorded depreciation expense of $32,648 and $32,926, 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 three month periods ended March 31, 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.

Deferred Revenue

Deferred revenue arises when customers pay for products and/or services in advance of revenue recognition. 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 March 31, 2015 and December 31, 2014, deferred revenue was $54,020 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 three month period ended March 31, 2015 and 2014, advertising costs amounted to $25,108 and $19,472, respectively.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

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 March 31, 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 three months ended March 31, 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 3,220,829,732 such potentially dilutive shares excluded as of March 31, 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 March 31, 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.

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 March 31, 2015 and December 31, 2014, inventory amounted to $142,756 and $152,758, respectively.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

Note 4 – Property, Plant, and Equipment

The following is a summary of Green’s Property, plant, and equipment by major category as of March 31, 2015:

	Cost		Accumulated Depreciation		Net

Computer equipment and related software	$	39,247	$	24,268	$	14,979
Construction in process		1,000		-		1,000
Leasehold improvements		630,834		428,806		202,028
Furniture and fixtures		27,201		22,923		4,278
Leased equipment		76,298		42,618		33,680
Equipment		285,006		194,943		90,063
Vehicle		48,193		34,424		13,769
Signage		25,154		11,993		13,161
Total	$	1,132,933	$	759,975	$	372,958

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

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

Note 5 – Fair Value Measurements

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

Total fair

Quoted prices

Significant other

Significant

value at

in active

observable

unobservable

March 31,

markets

inputs

Description

2015

(Level)

(Level 2)

(Level)

Derivative liability (1)

161,870

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

(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 March 31, 2015, the Company had a $161,870 derivative liability balance on the balance sheet, and for the three months ended March 31. 2015, the Company recorded a $30,380 loss from derivative liability fair value adjustment. 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 March 31, 2015, Green marked-to-market the fair value of the derivative liabilities related to the Eastshore Note and determined an aggregate fair value of $46,705 and recorded a $15,281 loss from change in fair value of derivative for the three month period ended March 31, 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 197.97%, (3) risk-free interest rate of 0.14%, (4) expected life of .50 years, and (5) estimated fair value of Green’s common stock of $0.0015 per share.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

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 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 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 March 31, 2015, Green marked-to-market the fair value of the derivative liabilities related to the KBM Note and determined an aggregate fair value of $73,674 and recorded a $13,626 loss from change in fair value of derivative for the three month period ended March 31, 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 187.19%, (3) risk-free interest rate of 0.13%, (4) expected life of .58 years, and (5) estimated fair value of Green’s common stock of $0.0017 per share.

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 25, 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 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 March 31, 2015, Green marked-to-market the fair value of the derivative liabilities related to the LGCF Note and determined an aggregate fair value of $41,491 and recorded a $1,473 loss from change in fair value of derivative for the three month period ended March 31, 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 155.95%, (3) risk-free interest rate of 0.26%, (4) expected life of 1.00 year, and (5) estimated fair value of Green’s common stock of $0.0017 per share.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

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 March 31, 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:

		March 31,			December 31,
		2015			2014
Convertible Debenture - Related Party
Principal amount		$	2,213,591		$	2,213,591
Debt discount			(38,610	)		(41,741	)
	Convertible debenture, net of debt discount	$	2,174,981		$	2,171,850

As of both March 31, 2015 and December 31, 2014, the principal balance of related party convertible debentures was $2,213,591 and the balance of accrued interest was $0.

As of March 31, 2015 and December 31, 2014, amounts due to related parties are $53,373 and $77,132, respectively. The $53,373 consists of $5,024 of accrued interest for the notes payable to Richard Surber, and $48,349 from various amounts owed to SAKL and its subsidiaries. The $77,132 consists of $3,704 of accrued interest for the note payable to Richard Surber and $73,428 from various amounts owed to SAKL's subsidiaries.

Richard Surber is also 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 $103,789. Subsequent to March 31, 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.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

Note 8 – Debt

During the three month period ending March 31, 2015, the Company has entered into four new loan agreements in the total amount of $199,962.

A summary of the new note payable as of March 31, 2015 and December 31, 2014 is as follows:

	Interest			Maturity	March 31,			December 31,
Creditor	Rate			Date	2015			2014
American Express Bank, FSB (1)		11.13	%	2/3/2017	$	78,352		$	-
Total						78,352			-
Less: Current portion						(40,503	)		-
Long-term portion					$	37,849		$	-

A summary of the new convertible notes payable as of March 31, 2015 and December 31, 2014 is as follows:

	Interest			Maturity	March 31,			December 31,
Creditor	Rate			Date	2015			2014
KBM Worldwide, Inc. (2)		8.00	%	10/28/2015	$	64,000		$	-
LG Capital Funding, LLC (3)		8.00	%	3/25/2016		34,000			-
Debt discount - convertible notes, net						(79,516	)		-
Total, net						18,484			-
Less: Current portion						(18,484	)		-
Long-term portion					$	-		$	-

A summary of the new related party note payable as of March 31, 2015 and December 31, 2014 is as follows:

	Interest			Maturity	March 31,			December 31,
Creditor	Rate			Date	2015			2014
Richard D. Surber (related party) (4)		18.00	%	3/12/2018	$	25,082		$	-
Total						25,082			-
Less: Current portion						(5,767	)		-
Long-term portion					$	19,315		$	-

(1)

On February 3, 2015, the Landis Salons II, Inc. entered into a loan agreement with American Express Bank, FSB in the amount of $74,000. The note is a merchant account financing arrangement wherein Landis repays the loan at the rate of 30% of the American Express credit card sales receipts that are collected each month. The loan requires a prepaid interest charge that is 12% ($8,880) of the $74,000 loan amount. These financing costs are being amortized monthly to interest expense during the two year term of the loan. The total amount due at the inception date is $82,880. As of March 31, 2015, the loan balance was $78,352. Payments made during the three months ended March 31, 2015, amounted to $4,528.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

(2)

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 convertible into Green’s common shares, at the holder’s option, at the conversion rate of 58% of the parket 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. 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 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, which was recorded on the balance sheet. $60,048 was recorded as a debt discount on the balance sheet and $0 was recorded as a credit to non-cash interest expense. As of March 31, 2015, the balance of the note was $64,000 and the balance of the debt discount was $46,073. No payments were made on the note during the three months ended March 31, 2015.

(3)

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 convertible into Green’s common shares, at the holder’s option, at the conversion rate of 58% (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. 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, which was recorded on the balance sheet. $34,000 was recorded as a debt discount on the balance sheet and $6,018 was recorded as non-cash interest expense. As of March 31, 2015, none of the note had been converted into shares of common stock. As of March 31, 2015, the balance of the note was $34,000 and the balance of the debt discount was $33,443. No payments have been made on the note as of March 31, 2015.

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. As a result, 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 (see Note 6 - Derivative Liability).

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

(4)

On March 24, 2015, Green Endeavors, Inc. and Landis Salons, Inc. (the "Company") issued a promissory note to Richard Surber, President, CEO and Director of Green, in the principal amount of $25,082 for funds loaned. The note bears interest at the rate of 18% per annum, has a maturity date of March 12, 2018, and requires monthly payments of $806. The Company shall be credited for satisfaction of the note for any payment that it makes of a loan that Mr. Surber is obligated to pay to Upstart Network, Inc., the reported source of the funds loan to the Company by Mr. Surber. As of March 31, 2015, the balance of the note was $25,082. No principal payments have been made on the note as of March 31, 2015. Mr. Surber is also providing his personal guaranty for several lines of credit and credit cards that are being utilized by the company and its operating subsidiaries.

As of March 31, 2015, Mr. Surber is a personal guarantor to various notes payable by the Company with remaining principal balances of $103,787. Subsequent to March 31, 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 – Settlement of Convertible Note Payable

On January 13, 2015, Green Endeavors entered into a Settlement Agreement and Release for the litigation between itself and Southridge Partners as described in Note 10 below. The settlement required that Southridge deliver to Green 14,205 shares of Green's series B preferred convertible stock and deliver, release, and mark satisfied in full the August 15, 2013, $75,000 promissory note that Green had issued to Southridge. In return, on January 14, 2015 Green issued to Southridge 10,230,000 shares of its common stock at a price of $0.0035 for a value of $35,805, resulting in a non-cash gain on settlement of debt of $39,195.

Note 10 – 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 March 31, 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 three month period ended March 31, 2015, there were no issuances or conversions of Convertible Supervoting Preferred shares.

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

Convertible Series B Preferred Stock

Each share of Green’s Convertible Series B Preferred Stock 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. Convertible Series B Preferred Stock shareholders, at the option of Green, can receive cash or common stock upon conversion.

On January 13, 2015, Green Endeavors entered into a Settlement Agreement and Release for the litigation between itself and Southridge Partners as described in Note 9 above. The settlement required that Southridge deliver to Green 14,205 shares of Green's series B preferred convertible stock and deliver, release, and mark satisfied in full the August 15, 2013, $75,000 promissory note that Green had issued to Southridge. In return, on January 14, 2015 Green issued to Southridge 10,230,000 shares of its common stock at a price of $0.0035 as a partial non-cash payment of the promissory note, resulting in a non-cash gain on settlement of debt of $39,195.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

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

As of March 31, 2015 and December 31, 2014, Green had 742,383 and 760,488 shares of Convertible Series B Preferred stock 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).

As of March 31, 2015 and December 31, 2014, Green had 246,568,747 and 195,414,505 shares of common stock issued and outstanding, respectively. This 51,154,242 increase of common shares is due to the conversion of 3,900 shares of Convertible Series B Preferred stock into 4,924,242 shares of Common Stock mentioned above; the partial conversion of the $75,000 promissory note to 10,230,000 shares mentioned above; and the exercising of 36,000,000 options issued (see Note 11 – Stock Based Compensation).

Note 11 – 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.

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.

As of March 31, 2015, the Company has granted 36,000,000 stock options to three employees for services provided to the Company. The stock based-compensation expense of $74,073 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: $0.0015 - $0.0027 exercise price, one year term, 162.49% – 164.25% volatility, and 0.17% – 0.26% risk free rates.

Under the 2015 Plan, the Company has granted stock options to three employees during the three months ended March 31, 2015 at option prices ranging from $0.0045 to $0.006 per share for an aggregate of 36,000,000 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 $198,000 appearing on the balance sheet as subscription receivable. The promissory notes mature in 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 three months ended March 31, 2015, there were no expired or cancelled grants. As of March 31, 2015, there were 44,000,000 and 470, 000 shares available for future stock-based compensation grants between the 2015 plan and the 2011 plan, respectively.

Green Endeavors, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2015 (Unaudited)

Note 12 – 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 March 31, 2015, the $75,000 amount owed to Southridge has been removed from the balance sheet per the settlement agreement.

Note 13 – 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 three months ended March 31, 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 14 – 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 three months ended March 31, 2015, Green had negative working capital of $777,030 and a net loss of $277,796, 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.

Note 15 – 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.

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 March 31, 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 March 31, 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.

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 three month periods ended March 31, 2015 and 2014.

For the three months ended March 31, 2015, we owned and operated two 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 March 31, 2015 and 2014, we had net sales of $701,756 and $837,465, respectively. Our net sales decreased 135,709 or 16.2% for the three months ended March 31, 2015.

The following table shows the change in service revenue by salon for the three month periods ended March 31, 2015 and 2014:

	Three Months Ended				Increase (Decrease)
	March 31,		March 31,		Over Prior Fiscal Year
Salon	2015		2014		Dollar			Percentage
Liberty Heights	$	372,378	$	437,151	$	(64,773	)		-14.8	%
Marmalade		131,994		179,001		(47,007	)		-26.3	%
City Creek		145		415		(270	)		-65.1	%
Total Service Revenue	$	504,517	$	616,567	$	(112,050	)		-18.2	%

As can be seen from the above table our three locations experienced a decline of 18.2% in service revenues for the three month period ending March 31, 2015 over the comparable period of service sales for 2014. This decrease is mostly due to reduced staffing wherein several of the of the senior stylists who produce more revenue have been 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 March 31, 2015 and 2014:

	Three Months Ended				Increase (Decrease)
	March 31,		March 31,		Over Prior Fiscal Year
Salon	2015		2014		Dollar			Percentage
Liberty Heights	$	108,267	$	123,388	$	(15,121	)		-12.3	%
Marmalade		42,498		49,200		(6,702	)		-13.6	%
City Creek		46,474		48,310		(1,836	)		-3.8	%
Total Product Revenue	$	197,239	$	220,898	$	(23,659	)		-10.7	%

As can be seen from the above table our three locations experienced a decline of 10.7% in product revenues for the three month period ended March 31, 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

The following table shows cost of revenue by type as a percentage of related revenue for the three month periods ended March 31, 2015 and 2014:

	Three Months Ended
	March 31,			March 31,
Revenue Type	2015			2014
Services		59.0	%		60.1	%
Product		55.9	%		58.3	%

The above table shows the cost of services revenue being 1.1% less for the three month period ended March 31, 2015 over the comparable period of service sales for 2014. This decrease in service cost is primary due to the Company having less staff employed, which generates less payroll expenses. The 2.4% decrease in product costs for the same comparable period is primarily due to less inventory shrinkage.

Operating Expenses

The following table shows general and administrative expenses for the three months ended March 31, 2015 and 2014:

	Three Months Ended
	March 31,		March 31,
	2015		2014		Change
Salaries and wages	$	181,907	$	112,380	$	69,527
Rent		49,207		52,738		(3,531	)
Advertising		25,108		19,472		5,636
Credit card merchant fees		12,208		15,037		(2,829	)
Insurance		12,759		15,229		(2,470	)
Utilities and telephone		15,279		15,149		130
Professional services		96,961		78,609		18,352
Repairs and maintenance		3,149		9,910		(6,761	)
Dues and subscriptions		8,514		6,634		1,880
Office expense		14,704		9,210		5,494
Travel		1,389		3,914		(2,525	)
Investor relations and company promotion		37,564		8,265		29,299
Other		5,744		8,715		(2,971	)
Total general and administrative expenses	$	464,493	$	355,262	$	109,231

The above table shows an increase of $109,231 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 $98,826 in the three month period ended March 31, 2015 compared to the three month period ended March 31, 2014.

Depreciation expense for the three months ended March 31, 2015, was $32,648 compared to $32,926 for the comparable three months ended March 31, 2014. The relatively small decrease of $278 is primarily due to an increase in equipment fully depreciated prior to the three months ended March 31, 2015.

Other Expense

Other expense for the three months ended March 31, 2015, increased to $74,683 from $67,148 for the comparable three months ended March 31, 2014, an increase of $7,535. The increase is primarily attributable to the derivative fair value adjustment change was $38,146 loss and an increase in interest expense from non-related parties of $6,868 due to the new convertible notes payable offset by a change of $32,201 in gain on the settlement of debt and a decrease in interest expense from related parties of $4,026 during the three month period ending March 31, 2014 compared to the comparable period of 2015.

Liquidity and Capital Resources

Cash and Investments in marketable securities

As of March 31, 2015, our principal source of liquidity consisted of $154,970 of cash, compared to $100,628 as of December 31, 2014. Our primary sources of cash during the three month period ended March 31, 2015 were customer payments for salon services and products and proceeds from issuance of convertible promissory notes. Our primary uses of cash during the three month period ended March 31, 2015 were 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 $777,030 as of March 31, 2015. Our current assets were $338,196, which consisted of $154,970 in cash, $12,096 in accounts receivable, $142,756 in inventory, and 1,034 in notes receivable. Our total assets were $735,629, which included $372,958 in property and equipment (net), and $51,815 in other assets. Our current liabilities were $1,115,226, including $397,201 in accounts payable and accrued expenses, $111,390 in amounts due to related parties, $292,304 in the current portion of convertible notes and notes payable and capital leases payable, $54,020 in deferred revenue, and a $161,870 derivative liability. Our long-term liabilities were $2,316,793. Our total stockholders’ deficit at March 31, 2015 was $2,696,390.

Working capital decreased by $120,873 as of March 31, 2015, compared to December 31, 2014 primarily due to the various changes in current assets and current liabilities that net to the overall change in working capital for the three month period.

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 three month period ended March 31, 2015 was $96,048 compared to $52,439 provided by operating activities for the three months ended March 31, 2014. This $148,487 change in cash is made up of several changes in the operating activities of the Company the most significant of which $41,067 and $85,300 more cash used for accounts payable and accrued expenses and amounts due to related parties, respectively.

Cash Flows from Investing Activities

Cash flow used in investing activities for the three months ended March 31, 2015 was $3,454 compared to $19,473 for the three months ended March 31, 2014, a $16,019 difference. The change was due to fewer purchases of property and equipment.

Cash Flows from Financing Activities

Cash flow provided by financing activities for the three months ended March 31, 2015 was $153,844 compared to $3,869 used in financing activities for the three months ended March 31, 2014, a change of $157,713. For the three months ended March 31, 2015 compared to the three months ended March 31, 2014, there was $153,941 more in the proceeds of new debt issuances offset by $3,772 more in payments made for debt obligations.

Other Factors Affecting Liquidity and Capital Resources

We have insufficient current assets to meet our current liabilities due to negative working capital of $777,030 as of March 31, 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 March 31, 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.

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 March 31, 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 March 31, 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 three months ended March 31, 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 March 3, 2015 at option prices ranging from $0.0045 to $0.006 per share for an aggregate of 36,000,000 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 $198,000 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.

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.

In the above transactions, the Board of Directors relied upon Rule 506 of the Securities Act of 1933 in originally issuing the convertible notes or preferred stock and in the subsequent issuances resulting from conversions of the notes and preferred securities into common stock were done pursuant to Rule 4(2) of the Securities Act of 1933 and the resales by the holders were carried out in reliance on Rule 144.

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.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Reserved]

Item 5. Other Information

None.

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)	None

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

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: May 26, 2015

By: /s/ Richard D. Surber

Richard D. Surber

President, Chief Executive Officer, Chief Financial Officer, and Director

Exhibit 31.01

CERTIFICATIONS

I, Richard D. Surber, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Green Endeavors, 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 registrant as of, and for, the periods presented in this report;

The registrant'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 registrant 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 registrant, 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 principles;

(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

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

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

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

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

Date: May 26, 2015

By: /s/ Richard D. Surber

Richard D. Surber

President, Chief Executive Officer, and Chief Financial Officer

(Principal Executive Officer and Principal Accounting and Financial Officer)

Exhibit 32.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended Mach 31, 2015 of Green Endeavors, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard D. Surber, President and Chief Executive Officer of Green Endeavors, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 26, 2015

By: /s/ Richard D. Surber

Richard D. Surber

President, Chief Executive Officer, and Chief Financial Officer

(Principal Executive Officer and Principal Accounting and Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Green Endeavors, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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