Green Endeavors, Inc. - FORM 10-Q/A

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EXCEL - IDEA: XBRL DOCUMENT - Green Endeavors, Inc.	Financial_Report.xls
EX-31.2 - EXHIBIT 31.2 - Green Endeavors, Inc.	ex312.htm
EX-31.1 - EXHIBIT 31.1 - Green Endeavors, Inc.	ex311.htm
EX-32.2 - EXHIBIT 32.2 - Green Endeavors, Inc.	ex322.htm
EX-32.1 - EXHIBIT 32.1 - Green Endeavors, Inc.	ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q/A

Amendment No. 2

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

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

For the transition period from __________ to __________

Commission file number 000-54018

______________________

GREEN ENDEAVORS, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________

Utah (State or Other Jurisdiction of Incorporation or Organization)	27-3270121 (I.R.S. Employer Identification No.)
59 West 100 South 2nd Floor Salt Lake City, Utah (Address of Principal Executive Offices)	84101 (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 o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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	Non-accelerated filer o	Smaller reporting company x
	(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 December 3, 2012, 4,463.589,292 shares of the registrant’s common stock, $0.001 par value, were outstanding.

EXPLANATORY NOTE

This Second Amendment on Form 10-Q/A (“Form 10-Q-A”) amends and restates the Quarterly Report on Form 10-Q/A of Green Endeavors, Inc. (the “Company”) for the quarter ended June 30, 2011, as originally filed with the Securities and Exchange Commission (the “SEC”) on August 11, 2011 (the “Original Filing”). This Form 10-Q/A is being filed to restate the Company’s consolidated financial statements in Item 1 and related disclosures (including certain amounts and disclosures in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2) for the three and six-month periods ended June 30, 2011, as discussed in Notes 7 and 11 to the consolidated financial statements included in Item 1.

The Company’s consolidated financial statements have been restated to correct the reporting of obligations arising from convertible debt of the Company as derivative obligations of the Company and to report the calculations of the potential obligations that arise from that classification.

Although this Form 10-Q/A supersedes the Original Filing in its entirety, this Form 10-Q/A only amends and restates Items 1 and 2 solely as a result of, and to reflect the restatement and adjustments referred to above, and no other information in the Original Filing is amended hereby. While the foregoing items have been updated, this amended report does not reflect any other events occurring after the Original Filing. In addition, currently-dated certifications from our Chief Executive Office and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, are attached to this Form 10-Q/A as Exhibits 31.01, 31.02, 32.01 and 32.02, respectively.

GREEN ENDEAVORS, INC. AND SUBSIDIARIES

INDEX

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Consolidated Balance Sheets:
	June 30, 2011 and December 31, 2010	1

	Consolidated Statements of Operations:
	Three and Six Months Ended June 30, 2011 and June 30, 2010	2

	Consolidated Statements of Cash Flows:
	Six Months Ended June 30, 2011 and June 30, 2010	3

	Notes to Consolidated Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

PART II.	OTHER INFORMATION

Item 6.	Exhibits	28

	Signatures	29

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Green Endeavors, Inc. and Subsidiaries

Consolidated Balance Sheets

	(Restated)
	June 30,			December 31,
	2011			2010
Assets	(Unaudited)
Current Assets:
Cash	$	87,798		$	67,593
Accounts receivable		112			941
Inventory		103,649			107,365
Prepaid expenses		1,327			3,317
Total current assets		192,886			179,216

Property, plant and equipment, net of accumulated depreciation of $296,254 and $248,939 respectively		452,381			493,205
Other assets		403,168			408,614
Total Assets	$	1,048,435		$	1,081,035

Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	311,429		$	200,327
Deferred revenue		48,433			48,525
Due to related parties		839,150			893,405
Derivative liability – convertible notes		126,698			- - - -
Convertible notes payable, net of debt discount of $82,497 and $0, respectively		25,002			- - - -
Current portion of notes payable, related party		- - - -			125,584
Current portion of notes payable		198,480			198,248
Total current liabilities		1,549,192			1,466,089

Long-Term Liabilities:
Notes payable, related party		105,000			105,000
Notes payable		88,277			102,056
Convertible debentures, net of debt discount of $102,680 and $110,193, respectively		2,757,120			2,749,607
Total long-term liabilities		2,950,397			2,956,663

Stockholders’ Deficit:
Convertible supervoting preferred stock, $0.001 par value, 10,000,000 shares authorized; 5,850,000 and 5,850,000 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively, no liquidation value		5,850			5,850
Convertible preferred series B stock - $0.001 par value 2,000,000 shares authorized, 626,532 and 610,332 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively		627			610
Preferred stock - $0.001 par value 3,000,000 shares authorized, no shares issued and outstanding		- - - -			- - - -
Common stock, $0.001 par value, 2,500,000,000 shares authorized; 454,348,797 and 430,149,464 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively		454,349			430,150
Additional paid in capital		(1,659,066	)		(1,694,506	)
Accumulated deficit		(2,252,914	)		(2,083,821	)
Total Stockholders’ Deficit		(3,451,154	)		(3,341,717	)
Total Liabilities and Stockholders’ Deficit	$	1,048,435		$	1,081,035

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Green Endeavors, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	(Restated)						(Restated)
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Revenue:
Services, net of discounts	$	522,424		$	409,578		$	1,018,000		$	782,816
Product, net of discounts		165,885			138,542			332,392			273,465
Total revenue		688,309			548,120			1,350,392			1,056,281

Costs and expenses:
Cost of services		329,162			205,170			608,465			442,694
Cost of product		108,365			73,927			177,281			146,324
Depreciation and amortization		22,156			13,666			47,314			38,811
General and administrative		255,980			214,166			511,498			439,219
Total costs and expenses		715,663			506,929			1,344,558			1,067,048

Income (loss) from operations		(27,354	)		41,191			5,834			(10,767	)

Other income (expense):
Interest expense		(118,275	)		(64,128	)		(178,655	)		(125,621	)
Gain (loss) on derivative liability fair value adjustment		9,867			0			9,867			0
Other (income) expense		(1,984	)		(3,037	)		(6,139	)		36,705
Total other income (expense)		(110,392	)		(67,165	)		(174,927	)		(88,916	)

Net loss	$	(137,746	)	$	(25,974	)	$	(169,093	)	$	(99,683	)

Net loss per common share – basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding – basic and diluted		450,735,244			362,967,079			446,470,182			354,695,650

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Green Endeavors, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	(Restated)
	June 30, 2011			June 30, 2010
Cash Flows from Operating Activities:
Net loss	$	(169,093	)	$	(99,683	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		47,315			38,811
Gain on derivative fair value adjustment		(9,867	)		- - - -
Debt discount amortization and initial recording		57,823			- - - -
Changes in operating assets and liabilities:
Due from related parties		(758	)		(112,482	)
Inventories		3,716			20,127
Prepaid expenses		1,990			(1,093	)
Other assets		5,446			(81,000	)
Accounts payable and accrued expenses		56,847			175,761
Deferred revenue		(92	)		2,273
Other long-term liabilities		- - - -			(9,795	)
Net cash used in operating activities		(6,673	)		(67,081	)

Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(6,491	)		(42,312	)
Purchase of long-term investment		- - - -			(25,085	)
Net cash used in investing activities		(6,491	)		(67,397	)

Cash Flows from Financing Activities:
Payments made on notes payable		(139,131	)		(10,000	)
Proceeds from loan		107,500			100,000
Proceeds from issuance of preferred stock		65,000			161,000
Net cash provided by financing activities		33,369			251,000

Increase in cash		20,205			116,522

Cash at beginning of period		67,593			33,656

Cash at end of period	$	87,798		$	150,178

Supplemental cash flow information:
Cash paid during the period for:
Interest	$	3,371	$	3,252
Non-cash investing and financing activities:
Derivative liability	$	136,565	$	- - - -
Issuance of series B preferred shares	$	- - - -	$	260,000

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Basis of Financial Statement 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.

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. On August 26, 2010 Green effected a forward split of the issued and outstanding shares of its common stock on a one for five basis and by the same proportion the number of authorized shares were increased to 2.5 billion to maintain the same ratios of authorized shares to issued shares and amended the designations of its Preferred Stock. All share and per share information included in these financial statements has been adjusted to reflect this forward stock split. The change in the designation of the Supervoting Preferred Stock will increase its voting rights from 10 votes per share to 100 votes per share, and the amendment to the designation of the Series B Preferred Shares will modify the language in the designation regarding changes in the Common stock and the time period allowed to the corporation to respond to request for conversion up to 90 days. All share and per share information included in these financial statements has been adjusted to reflect this forward stock split. Green is quoted on the OTC Markets as an OTCQB issuer under the symbol GRNE.

Green is a 90% controlled subsidiary of Nexia Holdings, Inc (“Nexia”). Green was acquired by Nexia in October 2007 in exchange for 150,000 shares of Nexia Series C Preferred Stock valued at $750,000. Nexia is not currently a reporting company and is quoted on the OTC Markets under the symbol NXHD.

Landis Salons, Inc., a Utah corporation, was organized on May 4, 2005 for the purpose of operating an Aveda Lifestyle Salon. As of December 31, 2009, Landis was 99% owned by Green and a noncontrolling interest of 1% was held by a former employee. During the three months ended March 31, 2010, Green issued 10,000 Series B Preferred shares for the remaining 1% noncontrolling interest in Landis.

Newby Salon, L.L.C. (“Newby”), a Utah limited liability company, organized on July 8, 2005 in the state of Utah, formerly owned and operated a Landis Aveda Concept Salon in Bountiful, Utah. On December 1, 2010, Green sold its ownership interest in Newby to Diversified Holdings X, Inc. whose president is also the president of Green Endeavors, Inc. Up until the time of sale, Newby was wholly-owned by Green. Newby was closed on August 15, 2010 because it did not meet our operational performance measurements or real estate requirements.

Landis Salons II, Inc. was organized on March 17, 2010 as a wholly owned subsidiary for the purpose of opening a second Aveda Lifestyle Salon. On September 20, 2010, Landis II commenced operations.

Basis of Financial Statement Presentation

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

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In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.

Green consolidates entities under control and records a noncontrolling interest for the portions not owned by Green. Control is determined, where applicable, by the sufficiency of equity invested and the rights of the equity holders, and by the ownership of a majority of the voting interests, with consideration given to the existence of approval or veto rights granted to the minority shareholder. If the minority shareholder holds substantive participating rights, it overcomes the presumption of control by the majority voting interest holder. In contrast, if the minority shareholder simply holds protective rights (such as consent rights over certain actions), it does not overcome the presumption of control by the majority voting interest holder.

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying values of all financial instruments are deemed to approximate fair value due to the short maturity of these instruments and interest rates that approximate current market rates.

Cash and Cash Equivalents

Investments with original maturities of three months or less at the time of purchase are considered cash equivalents. As of June 30, 2011 and December 31, 2010, 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 is stated at historical cost. Depreciation is generally provided over the estimated useful lives, using the straight-line method, as follows:

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

Green recorded depreciation expense in the amount of $22,157 for the three months ended June 30, 2011, $13,666 for the three months ended June 30, 2010, $47,315 for the six months ended June 30, 2011 and $38,811 for same period in 2010.

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The following is a summary of Green’s Property, plant and equipment by major category as of June 30, 2011:

	Cost		Accumulated Depreciation		Net
Computer equipment and related software	$	16,498	$	7,149	$	9,349
Leasehold improvements		441,078		180,758		260,320
Furniture and fixtures		19,998		10,465		9,533
Equipment		198,765		92,535		106,230
Vehicle		48,193		3,442		44,751
Signage		24,103		1,905		22,198
Total	$	748,635	$	296,254	$	452,381

The following is a summary of Green’s Property, plant and equipment by major category as of December 31, 2010:

	Cost		Accumulated Depreciation		Net
Computer equipment and related software	$	15,859	$	4,249	$	11,610
Leasehold improvements		438,678		155,993		282,685
Furniture and fixtures		20,473		9,239		11,234
Equipment		194,838		76,463		118,375
Vehicle		48,193		2,295		45,898
Signage		24,103		700		23,403
Total	$	742,144	$	248,939	$	493,205

Investments in Equity Securities

Marketable Securities

Green considers all of its investments in marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with the unrealized gains and losses presented net of tax and reported as a separate component of Stockholders' deficit. Realized gains and losses are determined using the specific identification method. Gains are recognized when realized and are recorded in the Consolidated Statements of Operations as Other income. Losses are recognized as realized or when Green has determined that an other-than-temporary decline in fair value has occurred.

Non-Marketable Securities

Green uses either the cost or equity method of accounting to account for its long-term, non-marketable investment securities. If Green determines that an other-than-temporary decline exists in a non-marketable equity security, Green writes down the investment to its fair value and records the related write-down as an impairment loss in the Consolidated Statements of Operations.

Series B Preferred Stock

Each share of Green’s Series B Preferred Stock is convertible into $5.00 worth of common stock and has one vote. The number of common shares received is based on the market value of the common stock on the date of conversion. Series B Preferred Stock shareholders, at the option of Green, can receive cash or common stock upon conversion. 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.

Deferred Revenue

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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.

Revenue Recognition

Revenue is recognized at the time the service is performed or the product is delivered.

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. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of each restricted stock issuance is determined using the closing price of Green’s common stock on the grant date.

Determining the fair value of stock-based awards at the grant date requires judgment, including estimating the following:

·	Expected volatility of our stock;

·	Expected term of stock options;

·	Risk-free interest rate for the period;

·	Expected dividends, if any; and

·	Expected forfeitures.

The computation of the expected volatility assumption used in the Black-Scholes option pricing model for new grants is based on implied volatility when the remaining maturities of the underlying traded options are at least one year and, when the remaining maturities of the underlying traded options are less than one year, it is based on an equal weighting of historical and implied volatilities.

When establishing the expected life assumption, Green reviews annual historical employee exercise behavior with respect to option grants having similar vesting periods. The risk-free interest rate for the period within the expected term of the option is based on the yield of United States Treasury notes in effect at the time of grant. Green has not historically paid dividends, thus the expected dividends used in any calculations are zero. Judgment is required in estimating the amount of stock-based awards that Green expects to be forfeited. Green calculates an expected forfeiture rate for stock options issuances based on historical trends.

The valuation of all options, including the expected life and forfeiture rates of stock options, are calculated based on one employee pool because there is no significant difference in exercise behavior between classes of employees.

As of June 30, 2011 and December 31, 2010, Green had no outstanding options or warrants to purchase shares of our common stock.

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.

As of June 30, 2011, Green’s deferred tax assets, which are solely related to net operating losses, have been fully offset by a valuation allowance.

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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.

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. Inventory is carried at the lower of cost or market. As of June 30, 2011, inventory amounted to $103,649 and $107,365 as of December 31, 2010.

Note 4 – Other Assets

The following table shows other assets as of June 30, 2011 and December 31, 2010:

	June 30, 2011		December 31, 2010
Green Series B Preferred shares pledged as collateral for the Landis II facility lease (1)	$	250,000	$	250,000
Note receivable pledged as collateral for the Landis II facility lease (2)		105,000		105,000
Lease and utility deposits		18,768		23,684
Certificate of deposit		25,838		25,462
Other		3,562		4,468
Total other assets	$	403,168	$	408,614

(1) On July 9, 2010, the Board of Directors approved the issuance of 50,000 shares of restricted Series B Preferred shares to Landis Salons II, Inc., a subsidiary of Green, to be used as collateral for a lease entered into by Landis Salons II to serve as the location for a new Landis Lifestyle Salon. These shares were then assigned to the landlord of Landis II as a security deposit with a related value of $250,000. The shares will be returned to Green after the second year of the lease term unless Landis Salons II is in default.

(2) On July 12, 2010, Landis Salons II, Inc. issued a promissory note in the principal amount of $105,000 payable to Wasatch Capital Corporation, which is a subsidiary of Nexia Holdings, Inc. Principal and interest, accruing at the rate of 5% per year, will be due on or before November 10, 2018. This promissory note was issued in exchange for a note receivable assigned to Landis Salons II, for $105,000 with the same terms. This note receivable was pledged as collateral for the Landis II facility lease. The pledge agreement will expire after the second year of the lease term unless it is in default. As of June 30, 2011, there was $5,077 of accrued interest on the note.

Note 5 – Lease Commitments

Operating Leases

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Facilities are leased under operating leases expiring at various dates through 2020. Certain of these leases contain renewal options. Rental expense was $40,007 for the three months ended June 30, 2011 as compared to $33,426 for the three months ended June 30, 2010. For the six months ended June 30, 2011 rent expense was $78,310 as compared to $66,294 for the same period in 2010.

As of June 30, 2011, future minimum lease payments under non-cancelable operating leases were as follows:

	Operating
For the fiscal years:	Leases
2011	$	69,467
2012		141,528
2013		145,066
2014		148,693
2015		132,415
Thereafter		376,828
Total lease payments	$	1,013,997

Capital Leases

During the year ended December 31, 2010, Green completed its capital lease through a bargain purchase option extended in the lease agreement. The bargain purchase amount was $4,916 which was the entire amount of the security deposit.

Note 6 – Related Party Transactions

On April 30, 2008, Green entered into a stock transfer agreement with its parent company Nexia and Nexia’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, $0.001 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. Based on the intrinsic value on the date of issuance, Green has a beneficial conversion feature, for which it has recorded a debt discount of $150,000 as of April 30, 2008. This discount is being amortized to the maturity date of the debenture, which is 10 years.

The following table summarizes the principal and accrued interest balance of the Convertible Debentures as of June 30, 2011 and December 31, 2010.

	June 30, 2011		December 31, 2010
Principal balance	$	2,859,800	$	2,859,800
Accrued interest		583,730		470,278
Total	$	3,443,530	$	3,330,078

On June 24, 2010, the Board of Directors approved the purchase of 650,000 shares of Green’s Supervoting Preferred stock from AmeriResource Technologies, Inc. in exchange for 52,000 shares of Green’s Series B Preferred stock. The number of Series B Preferred shares issued in this transaction was determined based on one share of Green’s Supervoting Preferred stock being equivalent to 10 shares of Common stock and each Series B Preferred share is convertible into $5.00 of Common stock. The Series B Preferred shares were valued at $260,000.

On July 7, 2010, the Board of Directors authorized the issuance of 25,000 shares of restricted Series B Preferred shares to Richard G. Clegg, an officer and director of Green, pursuant to the terms of his employment agreement with a related party, Diversified Holdings I, Inc. The shares were issued pursuant to The 2008 Benefit Plan of Green to a natural person, providing bona fide services and not in conjunction with a capital raising transaction, exempt from registration under Rule 701 of the Securities Act of 1933.

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On July 9, 2010, the Board of Directors approved the issuance of 50,000 shares of restricted Series B Preferred shares to Landis Salons II, Inc., a subsidiary of Green, to be used as collateral for a lease entered into by Landis Salons II, Inc. to serve as the location for a new Landis Lifestyle Salon. The shares are held by the landlord of the Marmalade facility to be converted and liquidated in the event of default on the part of Landis II. The shares will be returned to Landis II at the end of the second year of the lease term unless it is in default and are reflected as an Other asset on Green’s Consolidated Balance Sheet.

On July 12, 2010, Landis Salons II, Inc. issued a promissory note in the principal amount of $105,000 payable to Wasatch Capital Corporation, which is a subsidiary of Nexia Holdings, Inc. Principal and interest, accruing at the rate of 5% per year, will be due on or before November 10, 2018. This promissory note was issued in exchange for a note receivable assigned to Landis Salons II, for $105,000 with the same terms. The pledge agreement will expire after the second year of the lease term unless it is in default.

On December 1, 2010, Green sold its ownership interest in Newby to Diversified Holdings X, Inc. whose president is also the president of Green Endeavors, Inc. See Note 9 for additional information on the sale of Newby.

On January 6, 2011, the Board of Directors approved the conversion of 12,866 Series B Preferred shares into 12,866,000 shares of Common stock for Richard D. Surber, President, CEO and Director of Green. The shares were converted at $0.005 per share which was the quoted closing price on the date the conversion letter was received from the Mr. Surber.

Note 7 – Notes Payable

A summary of notes payable as of June 30, 2011 and December 31, 2010 is as follows:

Creditor	Interest Rate			Due Date		June 30, 2011		December 31, 2010
Xing Investment Corp (1)		10.00	%		05-12-2008	$	171,000	$	171,000
Chase Bank		7.24	%		02-13-2015		32,896		37,032
Nexia Holdings, Inc (related party).		- - - -			09-11-2011		- - - -		125,584
Asher Enterprises, Inc. (3)..		8.00	%		01-09-2012		75,000		- - - -
Asher Enterprises, Inc. (4)..		8.00	%		03-16-2012		32,500		- - - -
Salt Lake City Corporation (2)		3.25	%		06-18-2015		82,861		92,272
Wasatch Capital Corp. (related party)		5.00	%		11-10-2018		105,000		105,000
Total							499,257		530,888
Less: Current portion of notes payable							305,980		323,832
Notes payable						$	193,277	$	207,056

(1) On May 12, 2006, Green borrowed $171,000 from Xing Investment Corp with a convertible promissory note. The note is interest bearing at 10% per annum with no interest due until the note maturity date of May 12, 2008. Both principal and accrued interest, at the option of the note holder, may be converted into Common stock of Green at $0.01 per share. The note was not liquidated at the maturity date and is currently in default. No payments have been made on the obligation because Green is unable to locate Xing Investment Corp. or its representatives. As of June 30, 2011 and December 31, 2010, accrued interest reported in accounts payable and accrued expenses was $34,200.

(2) On June 18, 2010, Landis Salons, Inc. received a loan in the amount of $100,000 from the Division of Economic Development of Salt Lake City Corporation. The loan includes a 1% origination fee and bears interest at the rate of 3.25% per annum. Principal and interest payments are made monthly over a five year term commencing June 2010. The loan is secured by a $25,000 certificate deposit held in the name of Landis Salons, Inc. and personally guaranteed by Richard D. Surber, CEO of Green and Landis Salons, Inc.

(3) (Restated) On April 5, 2011, Green issued an 8% Convertible Promissory Note in the principal face amount of $75,000 to Asher Enterprises Inc., in exchange for a cash payment of the same amount. The note has a due date of

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January 9, 2012. The note provides for potential conversion into Green’s common stock beginning in six months from issuance with the conversion price set at 61% of the average of the lowest three (3) trading prices for the Common Stock during the ten (10) Trading Day period prior to the date of conversion. The transaction was handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. Green analyzed the conversion feature for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in Green’s convertible debt. The embedded derivative is carried on Green’s balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model. Upon issuance of the note, the fair value of $94,977 was recorded as a derivative liability. A discount to the convertible debt principal was recorded in the amount of $75,000 and the difference between the initial recording of the derivative liability and the debt discount in the amount of $19,977 was recorded as interest expense. The debt discount is amortized over the life of the note. For the three months ended June 30, 2011, $23,118 of the debt discount had been amortized and recorded as interest expense. As of June 30, 2011, the remaining, unamortized debt discount balance was $51,882 and the accrued interest balance on the note was $1,414. Also for the three months ended June 30, 2011, $8,850 was recorded as a derivative liability adjustment gain on the mark-to-market, fair value measurement. The derivative liability balance for the note as of June 30, 2011 was $86,127. As of June 30, 2011, none of the note had been converted.

(4) (Restated) On June 14, 2011, Green issued an 8% Convertible Promissory Note in the principal face amount of $32,500 to Asher Enterprises Inc., in exchange for a cash payment of the same amount. The note has a due date of March 16, 2012. The note provides for potential conversion into Green’s common stock beginning in six months from issuance with the conversion price set at 61% of the average of the lowest three (3) trading prices for the Common Stock during the ten (10) Trading Day period prior to the date of conversion. The transaction was handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. Green analyzed the conversion feature for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. ASC 815-15 requires that the conversion features are bifurcated and separately accounted for as an embedded derivative contained in Green’s convertible debt. The embedded derivative is carried on Green’s balance sheet at fair value. Any unrealized change in fair value, as determined at each measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted by the change. The Company values the embedded derivative using the Black-Scholes pricing model. Upon issuance of the note, the fair value of $41,588 was recorded as a derivative liability. A discount to the convertible debt principal was recorded in the amount of $32,500 and the difference between the initial recording of the derivative liability and the debt discount in the amount of $9,088 was recorded as interest expense. The debt discount is amortized over the life of the note. For the three months ended June 30, 2011, $1,884 of the debt discount had been amortized and recorded as interest expense. As of June 30, 2011, the remaining, unamortized debt discount balance was $30,616 and the accrued interest balance on the note was $114. Also for the three months ended June 30, 2011, $1,017 was recorded as a derivative liability adjustment gain on the mark-to-market, fair value measurement. The derivative liability balance for the note at June 30, 2011 was $40,571. As of June 30, 2011, none of the convertible note had been converted.

Note 8 – Stockholders’ Deficit

Preferred Stock

On August 4, 2010 by Written Consent of the majority of the voting rights of the shareholders of Green, consent was given to authorize the Board of Directors to amend the designations of the Preferred Stock. The change in the designation of the Supervoting Preferred Stock increased its voting rights from 10 votes per share to 100 votes per share.

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Green is authorized to issue 15,000,000 shares of preferred stock. Green’s preferred stock may be divided into such series as may be established by the Board of Directors. Each share of the 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.

Each share of Green’s Series B Preferred Stock is convertible into $5.00 worth of Common stock and has one vote. The number of common shares received is based on the market value of the Common stock on the date of conversion. Series B Preferred Stock shareholders, at the option of Green, can receive cash.

As of June 30, 2011 and December 31, 2010, there were sufficient common shares to be issued if the preferred shares were converted due to an increased share price. Based on the availability of common shares upon conversion, it is assumed that Green would settle the contract in shares and classify the preferred shares as equity.

On January 21, 2010, the Board of Directors approved the conversion of 6,400 shares of Series B Preferred shares into 32,000,000 shares of Common stock. The shares were converted at $0.001 per share based on the closing price of the stock prior to the date of conversion.

On February 17, 2010, Green issued 10,000 Series B Preferred shares to a former employee for the remaining 1% noncontrolling interest in Landis.

On February 26, 2010, Green issued 4,400 Series B Preferred shares to an investor for $11,000. The shares were valued at $2.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On March 12, 2010, the Board of Directors approved the conversion of 400 Series B Preferred shares into 1,000,000 shares of Common stock for an employee. The shares were converted at $0.002 per share based on the closing price of the stock prior to the date of issuance.

On April 13, 2010, the Board of Directors approved the conversion of 2,000 Series B Preferred shares into 10,000,000 shares of Common stock for an investor. The shares were converted at $0.001 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On April 16, 2010, Green issued 33,334 Series B Preferred shares to an investor for $50,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On June 24, 2010, the Board of Directors approved the exchange of 650,000 shares of Green’s Supervoting Preferred stock from AmeriResource Technologies, Inc. for 52,000 shares of Green’s Series B Preferred stock. The number of Series B Preferred shares issued in this transaction were determined based on one share of Green’s Supervoting Preferred stock being equivalent to 10 shares of Common stock and each Series B Preferred shared is convertible into $5.00 of Common stock. The Series B Preferred shares were valued at $260,000.

On June 28, 2010, Green issued 33,334 Series B Preferred shares to two separate investors for $50,000 each. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On July 9, 2010, the Board of Directors approved the issuance of 50,000 shares of restricted Series B Preferred shares to Landis Salons II, Inc., a subsidiary of Green, to be used as collateral for a lease entered into by Landis Salons II to serve as the location for a new Landis Lifestyle Salon. These shares were then assigned to the landlord of Landis II as a security deposit with a related value of $250,000. This amount is recorded as an other asset on the Balance Sheet.

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On August 4, 2010, the Board of Directors approved for two different investors the conversions of 3,000 Series B Preferred shares into 15,000,000 shares of common stock for each of the investors. The shares were converted at $0.001 per share which was mutually agreed upon by the Board of Directors and each of the investors.

On August 5, 2010, the Board of Directors approved the conversion of 3,000 Series B Preferred shares into 15,000,000 shares of common stock. The shares were converted at $0.001 per share which was mutually agreed upon by the Board of Directors and each of the investors.

On August 19, 2010, Green issued 33,334 Series B Preferred shares to an investor for $50,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On August 26, 2010, Green issued 33,334 Series B Preferred shares to an investor for $50,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On September 21, 2010, the Board of Directors approved the conversion of 2,200 Series B Preferred shares into 2,000,000 shares of Common stock. The shares were converted at $0.0055 per share, which was mutually agreed upon by the Board of Directors and the investor.

On September 21, 2010, Green issued 16,666 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On September 27, 2010, the Board of Directors approved the conversion of 5,000 Series B Preferred shares into 4,901,960 shares of Common stock. The shares were converted at $0.0051 per share, which was the closing price on the last trading day prior to the conversion.

On September 28, 2010, Green issued 16,666 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On October 12, 2010, Green issued 16,666 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On October 26, 2010, Green issued 16,666 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On October 28, 2010, the Board of Directors approved the conversion of 5,800 Series B Preferred shares into 3,411,765 shares of Common stock for an investor. The shares were converted at $0.0085 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

In November and December of 2010, Green issued 99,998 Series B Preferred shares to various investors for $150,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investors.

On December 12, 2010, the Board of Directors approved the conversion of 16,600 Series B Preferred shares into 7,155,172 shares of Common stock for an investor. The shares were converted at $0.0116 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

On November 16, 2010, the Board of Directors approved the conversion of 4,600 Series B Preferred shares into 1,284,916 shares of Common stock for an investor. The shares were converted at $0.0179 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

On November 22, 2010, the Board of Directors approved the conversion of 2,200 Series B Preferred shares into 2,000,000 shares of Common stock for an investor. The shares were converted at $0.0055 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

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On December 2, 2010, the Board of Directors approved the issuance of 2,000 Series B Preferred shares each to three employees of Landis Salons, Inc. for services rendered. The shares were valued at $5 per share or $30,000.

On January 6, 2011, the Board of Directors approved the conversion of 12,866 Series B Preferred shares into 12,866,000 shares of Common stock for Richard D.Surber, President, CEO and Director of Green. The shares were converted at $0.005 per share which was the quoted closing price on the date the conversion letter was received from Mr. Surber.

On March 10, 2011, Green issued 14,333 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.74 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On March 16, 2011, Green issued 16,333 Series B Preferred shares to an investor for $25,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On April 1, 2011, the Board of Directors approved the conversion of 4,600 Series B Preferred shares into 3,833,333 shares of Common stock for an investor. The shares were converted at $0.006 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

On April 26, 2011, Green issued 10,000 Series B Preferred shares to an investor for $15,000. The shares were valued at $1.50 per share which was mutually agreed upon by the Board of Directors and the individual investor.

On April 28, 2011, the Board of Directors approved the conversion of 5,000 Series B Preferred shares into 5,000,000 shares of Common stock for an investor. The shares were converted at $0.005 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

On June 13, 2011, the Board of Directors approved the conversion of 2,000 Series B Preferred shares into 2,500,000 shares of Common stock for an investor. The shares were converted at $0.004 per share which was the quoted closing price on the date the conversion letter was received from the shareholder.

As of June 30, 2011 and December 31, 2010, Green had 5,850,000 shares of Supervoting Preferred stock issued and outstanding and 626,532 and 610,332 shares of convertible Series B Preferred stock issued and outstanding, respectively.

Common Stock

Green is authorized to issue 2,500,000,000 shares of Common stock with a par value of $0.001 per share. As of June 30, 2011, Green had 454,348,797 shares of Common stock outstanding.

On August 4, 2010, by Written Consent of the majority of the voting rights of the shareholders of Green consent was given to authorize the Board of Directors to carry out a forward split of the issued and outstanding shares of the common stock on a 1 for five basis and by the same proportion, the number of authorized shares was increased to 2.5 billion to maintain the same ratios of authorized shares to issued shares. All share and per share information included in these financial statements has been adjusted to reflect this forward stock split.

Common stock issued during fiscal 2010 and during the six months ended June 30, 2011 have all been related to the conversion of Series B Preferred shares which are disclosed above in Note 8 – Stockholders’ Deficit under the heading Preferred Stock.

Noncontrolling Interest

As of December 31, 2009, Landis was 99% owned by Green and had a noncontrolling interest of 1%. During the three months ended March 31, 2010, Green issued 10,000 Series B Preferred shares for the remaining 1% noncontrolling interest in Landis.

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Note 9 – Gain on Sale of Subsidiary

On December 1, 2010, Green affected the sale of its ownership interest in Newby Salons, LLC to Diversified Holdings X, Inc., whose president is also the president of Green. Newby Salons, LLC operated the Bountiful salon location which was closed on August 15, 2010. Green transferred its stock ownership to DHX in exchange for $100. The Stock Purchase Agreement indemnifies and protects Green from any and all obligations, indebtedness and liabilities arising from the ownership of and the property owned or formerly owned by Newby Salons, LLC.

The following table summarizes the gain on sale of Newby Salons, LLC on December 1, 2010:

Cash consideration received	$	100
Net current and long-term liabilities sold		320,670
Gain on sale of subsidiary	$	320,770

Note 10 – Going Concern

Generally accepted accounting principles in the United States of America contemplate the continuation of Green as a going concern. Green had a net loss for the six months ended June 30, 2011 of $169,093 and negative working capital of $1,360,306, which raises substantial doubt about the 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 11 – Derivative Liability (Added as part of these restated financial statements)

As discussed in Note 7 – “Notes Payable”, during 2011, Green issued an aggregate of $107,500 Convertible Promissory Notes to Asher Enterprises, Inc. (“Asher Notes”) that mature from January 9, 2012 to March 16, 2012. The Asher Notes bear 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 61% discount to the market price of the lowest three trading prices 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 due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options and also because Asher is not entitled to convert any portion of the convertible notes to the extent that the shares to be issued would cause Asher’s beneficial ownership of the Company’s common stock to exceed 4.99% of the outstanding shares of the Company’s common stock. ASC 815-15 requires that the conversion feature is bifurcated and separately accounted for as an embedded derivative contained in Green’s convertible debt. The embedded derivative 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 aggregate fair value of the derivative at the inception dates of the Asher Notes was $136,565. $107,500 was recorded as a debt discount, which is up to but not more than the net proceeds of the notes. $29,064 was charged to operations as non-cash interest expense. The fair value of $136,565 was recorded as a derivative liability on the balance sheet. The debt discount is amortized over the life of the notes (approximately nine months each). On June 30, 2011, Green marked-to-market the fair value of the debt derivatives and determined an aggregate fair value of $126,698 and recorded a $9,867 gain from change in fair value of debt derivatives. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 279%, (3) risk-free interest rate of 0.15%, (4) expected life of 0.53 to 0.71 of a year, and (5) estimated fair value of Green’s common stock of from $0.000243 to .000269 per share.

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Note 12– Restatement of Form 10-Q (Added as part of these restated financial statements)

Subsequent to the filing of Green’s Form 10-Q for the six months ended June 30, 2011, management discovered an error from the application of an accounting principle that is not allowed by GAAP resulting in a material accounting error thus requiring the restatement of prior filings with the SEC. As noted above in Note 11 – “Derivative Liability”, Green issued various convertible promissory notes to Asher Enterprises, Inc. (“Asher”) during the three months ended June 30, 2011. According to the guidance provided by ASC 815-15-25, Green failed to bifurcate the convertible debt issued to Asher for these convertible notes issued. Green incorrectly applied an accounting method not allowed by GAAP, which under the guidance of ASC 250, is to be treated as a correction of an error thus requiring the restatement of the prior affected accounting periods as of the first period presented

The effect on the Company’s previously issued June 30, 2011 financial statements are summarized as follows:

Balance Sheet as of June 30, 2011:

			As previously Reported			Adjustment			As Restated
Assets
Current Assets:
Cash			$	87,798		$	0		$	87,798
Accounts receivable				112			0			112
Inventory				103,649			0			103,649
Prepaid expenses				1,327			0			1,327
Total current assets				192,886			0			192,886

Property, plant and equipment, net of accumulated depreciation				452,381			0			452,381
Other assets				403,168			0			403,168
Total Assets			$	1,048,435		$	0		$	1,048,435

Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses			$	311,429		$	0		$	311,429
Deferred revenue				48,433			0			48,433
Due to related parties				839,150			0			839,150
Derivative liability – convertible notes	(1	)		0			126,698			126,698
Convertible notes payable, net of debt discount	(2	)		54,756			(29,754	)		25,002
Current portion of notes payable				198,480			0			198,480
Total Current LiabilitiesCurrent portion of notes payable	(3	)		1,452,248			96,944			1,549,192
Long-Term Liabilities:
Notes payable related party				105,000			0			105,000
Notes payable				88,277			0			88,277
Convertible debentures, net of debt discount				2,757,120			0			2,757,120
Total long-term liabilities				2,950,397			0			2,950,397

Stockholders’ Deficit:
Convertible Supervoting preferred stock, $0.001 par value, 10,000,000 shares authorized; 5,850,000 shares issued and outstanding at June 30, 2011; no liquidation value				5,850			0			5,850
Convertible preferred series B stock - $0.001 par value, 2,000,000 shares authorized, 626,532 shares issued and outstanding at June 30, 2011				627			0			627
Preferred stock - $0.001 par value 3,000,000 shares authorized, no shares issued and outstanding at June 30, 2011				0			0			0
Common stock, $0.001 par value, 2,500,000,000 shares authorized; 454,348,797 shares issued and outstanding at June 30, 2011				454,349			0			454,349
Additional paid-in capital	(4	)		(1,594,093	)		(64,973	)		(1,659,066	)
Accumulated deficit	(5	)		(2,220,943	)		(31,971	)		(2,252,914	)
Total stockholders’ deficit	(6	)		(3,354,210	)		(96,944	)		(3,451,154	)
Total Liabilities and Stockholders’ Deficit			$	1,048,435		$	0		$	1,048,435

(1) This adjustment records the derivative liability that is calculated as required under the guidance of ASC 815-15 for the Asher and Nexia convertible debt as discussed in Note 11.

(2) This is the balance of the Asher convertible notes that is net of the debt discount as discussed in Notes 7 and 11.

(3) This is the change in current liabilities due to the restatement adjustments.

(4) This adjustment is from the correction adjustments referenced in number two above.

(5) This reflects the effect of recording the adjustments relating to the derivative liability correction and other related adjustments to the income statements.

(6) This is the change in total stockholders’ deficit due to the restatement adjustments.

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Statement of Operations for the Six Months Ended June 30, 2011:

			As Previously Reported			Adjustments			As Restated
Revenue:
Services, net of discounts			$	1,018,000		$	0		$	1,018,000
Product, net of discounts				332,392			0			332,392
Total revenue				1,350,392			0			1,350,392

Costs and expenses:
Cost of services				608,465			0			608,465
Cost of product				177,281			0			177,281
Depreciation				47,314			0			47,314
General and administrative				511,498			0			511,498
Total costs and expenses				1,344,558			0			1,344,558

Income (loss) from operations				5,834			0			5,834

Other income (expense), net:
Interest expense	(1	)		(136,817	)		(41,838	)		(178,655	)

Gain (loss) on derivative liability fair value adjustment	(2	)		0			9,867			9,867
Other income (expense)				(6,139	)		0			(6,139	)
Total other income (expense), net	(3	)		(142,956	)		(31,971	)		(174,927	)

Net loss	(4	)	$	(137,122	)	$	(31,971	)	$	(169,093	)

Net loss per common share – basic and diluted			$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding – basic and diluted				446,470,182						442,157,731

(1) This adjustment is a result of the correction of the initial recording of the convertible debenture and notes. As per the application of ASC 815-15, Green did not bifurcate the issuance of these convertible instruments. Upon doing so, the correction of the debt discounts recorded at inception of the issuance of the convertible instruments went from $68,730 to $107,500. Accordingly, it follows that the accretion of the higher debt discount amounts would result in an increased amount. The debt discount accretion is being recorded as interest expense. The other primary contributor to this change is the $29,064 of the initial recording of the difference of the debt discount and the derivative liability that is initially recorded as interest expense.

(2) This adjustment is a result of the derivative liability mark-to-market that is made each measurement period as required under the guidance of ASC 815-15 for the Asher and Nexia convertible debt as discussed in Note 11. The unrealized change in fair value is recorded as a component of the income statement as indicated.

(3) This amount is simply the summation of the changes in other income (expense) for the period.

(4) This amount is simply the summation of the change in the net loss for the period.

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Statement of Operations for the Three Months Ended June 30, 2011:

			As Previously Reported			Adjustments			As Restated
Revenue:
Services, net of discounts			$	522,424		$	0		$	522,424
Product, net of discounts				165,885			0			165,885
Total revenue				688,309			0			688,309

Costs and expenses:
Cost of services				329,162			0			329,162
Cost of product				108,365			0			108,365
Depreciation				22,156			0			22,156
General and administrative				255,980			0			255,980
Total costs and expenses				715,663			0			715,663

Income (loss) from operations				(27,354	)		0			(27,354	)

Other income (expense):
Interest expense	(1	)		(76,437	)		(41,837	)		(118,275	)
Gain (loss) on derivative liability fair value adjustment	(2	)		0			9,867			9,867
Other income (expense)				(1,984	)		0			(1,984	)
Total other income (expense)	(3	)		(78,421	)		(31,971	)		(110,392	)

Net loss	(4	)	$	(105,775	)	$	(31,971	)	$	(137,746	)

Net loss per common share – basic and diluted			$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding – basic and diluted				450,735,244						450,735,244

(3) This amount is simply the summation of the changes in other income (expense) for the period.

(4) This amount is simply the summation of the change in the net loss for the period.

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Statement of Cash Flows for the Six Months Ended June 30, 2011:

			As Previously Reported			Adjustments			As Restated

Cash Flows from Operating Activities:
Net loss	(1	)	$	(137,122	)	$	(31,971	)	$	(169,093	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization				47,315			0			47,315
Gain on derivative liability fair value adjustment	(2	)		0			(9,867	)		(9,867	)
Debt discount amortization and initial recording	(3	)		15,985			41,838			57,823
Changes in operating assets and liabilities:
Due from related parties				(758	)		0			(758	)
Inventories				3,716			0			3,716
Prepaid expenses				1,990			0			1,990
Other assets				5,446			0			5,446
Accounts payable and accrued expenses				56,847			0			56,847
Deferred revenue				(92	)		0			(92	)
Net cash used in operating activities				(6,673	)		0			(6,673	)

Cash Flows from Investing Activities:
Purchases of property, plant and equipment				(6,491	)		0			(6,491	)
Net cash used in investing activities				(6,491	)		0			(6,491	)

Cash Flows from Financing Activities:
Payments made on notes payable				(139,131	)		0			(139,131	)
Proceeds from loan				107,500			0			107,500
Proceeds from issuance of preferred stock				65,000			0			65,000
Net cash provided by financing activities				33,369			0			33,369

Increase in cash				20,205			0			20,205
							0
Cash at beginning of period				67,593			0			67,593
							0
Cash at end of period			$	87,798		$	0		$	87,798

Supplemental cash flow information:
Cash paid during the period for:
Interest			$	3,371		$	0		$	3,371
Non-cash investing and financing activities:
Derivative liability	(1, 2)		$	0		$	136,656		$	136,565
Issuance of series B preferred shares			$	260,000		$	0		$	260,000

(3) As mentioned in item 1 above, Green had additional amounts that were bifurcated into a derivative liability and a debt discount. The original amount of the derivative liability for the convertible notes was $136,565. Upon the initial recording of the $107,500 debt discount of the convertible notes, the $29,064 difference between the derivative liability and the debt discount is charged to interest expense. The $29,064 and the $28,759 debt discount accretion total $57,823, the restated amount. These are non-cash entries.

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

The following discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q/A Amendment Number Two, or this Quarterly Report, and in conjunction with our Form 10K for the fiscal years ended December 31, 2010 and December 31, 2009. 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

We run two high-quality hair care salons that feature Aveda™ products for retail sale. Landis operates its business within a 4,000 square foot space located in central Salt Lake City, Utah as an Aveda Lifestyle Salon. 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. Aveda Lifestyle Salons are required to carry all of Aveda’s products and must meet a higher threshold for product sales than other types of Aveda Salons.

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

Critical Accounting Estimates

In preparing our 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

Through our two wholly-owned subsidiaries, Landis Salons, Inc. and Landis Salons II, Inc., we operate two full-service hair and retail salons featuring the Aveda™ line of products. In August 2010, we determined that Newby Salons, LLC, which operated our Bountiful salon, did not meet our operational performance or real estate requirements and was closed. Revenue and expenses from the Bountiful salon are included in the following analysis of our operations until December 1, 2010 when Newby Salons, LLC was sold. The following discussion examines our results of operations and financial condition based on our consolidated financial statements for the three and six months ended June 30, 2011 and 2010.

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Revenue

We generate revenue through the sale of services and products in the hair salon industry. As compared to the respective prior fiscal year, revenues increased 26% to $688,309 during the three months ended June 30, 2011 and increased 28% to $1,350,392 during the six months ended June 30, 2011.

The percentage increase in revenues for the three months ended June 30, 2011 compared to the same period in 2010 and the six months ended June 30, 2011 compared to the same period in 2010, were driven by the following factors:

Factor	June 30, 2011			June 30, 2010
Same-store		(2.57	)%		6.17	%
New salon		35.32	%		- - - -
Closed salon		(7.17	)%		(0.44	)%
Total		25.58	%		5.73	%

Three months ended June 30, 2011 and 2010

The following table shows the increase in revenues for the three months ended June 30, 2011 compared to June 30, 2010 between services and product.

	Three Months Ended
	June 30, 2011		June 30, 2010		Change
Services	$	522,424	$	409,578	$	112,846
Product		165,885		138,542		27,343
Total revenue	$	688,309	$	548,120	$	140,189

Six months ended June 30, 2011 and 2010

The following table shows the increase in revenues for the six months ended June 30, 2011 compared to June 30, 2010 between services and product.

	Six Months Ended
	June 30, 2011		June 30, 2010		Change
Services	$	1,018,000	$	782,816	$	235,184
Product		332,392		273,465		58,927
Total revenue	$	1,350,392	$	1,056,281	$	294,111

Costs of Revenue

Three months ended June 30, 2011 and 2010

Costs of revenue for the three months ended June 30, 2011, increased to $437,527 from $279,097 for the three months ended June 30, 2010, an increase of 57%. This increase over the comparable quarterly periods is primarily attributable to an increased number of service providers.

Cost of services for the three months ended June 30, 2011, increased to $329,162 from $205,170 for the three months ended June 30, 2010. Cost of product for the three months ended June 30, 2011, increased to $108,365 from $73,927 for the three months ended June 30, 2010.

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The following table shows cost of revenue as a percentage of related revenue:

	Three Months Ended
	June 30, 2011			June 30, 2010
Services		63.01	%		50.1	%
Product		65.33	%		53.4	%

Six months ended June 30, 2011 and 2010

Costs of revenue for the six months ended June 30, 2011, increased to $785,746 from $589,018 for the six months ended June 30, 2010, an increase of 33%. This increase over the comparable quarterly periods is primarily attributable to an increased number of service providers.

Cost of services for the six months ended June 30, 2011, increased to $608,465 from $442,694 for the six months ended June 30, 2010. Cost of product for the six months ended June 30, 2011, increased to $177,281 from $146,324 for the six months ended June 30, 2010.

The following table shows cost of revenue as a percentage of related revenue:

	Six Months Ended
	June 30, 2011			June 30, 2010
Services		59.77	%		56.6	%
Product		53.33	%		53.5	%

Operating Expenses

Three months ended June 30, 2011 and 2010

The following table shows General and administrative expense for the three months ended June 30, 2011 and 2010:

	Three Months Ended
	June 30, 2011		June 30, 2010		Change
Salaries and wages	$	78,641	$	72,776	$	5,865
Rent		40,007		33,426		6,581
Advertising		25,518		12,644		12,874
Credit card merchant fees		8,098		14,192		(6,094	)
Insurance		12,429		14,452		(2,023	)
Utilities and telephone		10,210		6,910		3,300
Professional services		46,163		47,315		(1,152	)
Repairs and maintenance		2,424		1,871		553
Dues and subscriptions		3,832		1,656		2,176
Office expense		7,776		6,770		1,006
Travel		3,057		1,989		1,068
Other		17,825		165		17,660
Total General and administrative expenses	$	255,980	$	214,166	$	41,814

The increase in General and administrative expenses over the comparable quarterly periods is primarily due to increases in other general and administrative expenses, advertising, rent, salaries and wages. Salaries and wages increased due to additional administrative personnel on staff during the three months ended June 30, 2011 as compared to the same period in 2010. Other general and administrative expenses included office expenses, repairs and maintenance, dues and subscriptions, transfer agent expense and travel.

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Depreciation and amortization expense for the three months ended June 30, 2011, increased to $22,156 from $13,666 for the three months ended June 30, 2010. The increase is due to an increase in property, plant and equipment purchased at the end of fiscal 2010 and the first half of fiscal 2011 relating to the opening of the Landis II salon offset by fixed assets becoming fully depreciated between the comparative periods.

Six months ended June 30, 2011 and 2010

The following table shows General and administrative expense for the six months ended June 30, 2011 and 2010:

	Six Months Ended
	June 30, 2011		June 30, 2010		Change
Salaries and wages	$	159,697	$	139,891	$	19,806
Rent		78,310		66,294		12,016
Advertising		55,349		32,604		22,745
Credit card merchant fees		20,981		27,180		(6,199	)
Insurance		22,609		31,011		(8,402	)
Utilities and telephone		21,960		16,197		5,763
Professional services		94,635		70,815		23,820
Repairs and maintenance		6,394		14,359		(7,965	)
Dues and subscriptions		8,933		5,647		3,286
Office expense		12,171		15,917		(3,746	)
Travel		5,128		4,163		965
Other		25,331		15,141		10,190
Total General and administrative expenses	$	511,498	$	439,219	$	72,279

The increase in General and administrative expenses over the comparable quarterly periods is primarily due to increases in professional services, advertising, salaries and wages and rent. Salaries and wages increased due to additional administrative personnel on staff during the six months ended June 30, 2011 as compared to the same period in 2010. Other general and administrative expenses included office expenses, repairs and maintenance, dues and subscriptions, transfer agent expense and travel.

Depreciation and amortization expense for the six months ended June 30, 2011, increased to $47,314 from $38,811 for the six months ended June 30, 2010. The increase is due to an increase in property, plant and equipment purchased at the end of fiscal 2010 and the first half of fiscal 2011 relating to the opening of the Landis II salon offset by fixed assets becoming fully depreciated between the comparative periods.

Other Expense

Three months ended June 30, 2011 and 2010

Other expense for the three months ended June 30, 2011, increased to $110,392 from $67,165 for the three months ended June 30, 2010, an increase of $43,227. This increase over the comparable quarterly periods is primarily due to an increase of $28,759 in interest expense associated with the amortization of debt discount.

Six months ended June 30, 2011 and 2010

Other expense for the six months ended June 30, 2011, increased to $174,927 from $88,916 for the six months ended June 30, 2010, an increase of $86,011. This increase over the comparable quarterly periods is primarily due to a decrease of $33,671 from the settlement of a note receivable and by an increase of $28,759 in interest expense associated with the amortization of debt discount.

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Liquidity and Capital Resources

As of June 30, 2011 and December 31, 2010

We had a working capital deficit of $1,356,306 as of June 30, 2011. Our Current assets were $192,886, which consisted of $87,798 in Cash, $103,649 in Inventory, $1,327 in Prepaid expenses and $112 in Accounts receivable. Our Total assets were $1,048,435, which included $452,381 in Property and equipment (net), and $403,168 in Other assets. Our Current liabilities were $1,549,192, including $311,429 in Accounts payable and accrued expenses, $839,150 Due to related parties, and $198,480 in the Current portion of notes payable, net of debt discount. Our Long-term liabilities were $2,950,397. Our total Stockholders’ deficit at June 30, 2011 was $3,451,154.

We had a working capital deficit of $1,286,873 as of December 31, 2010. Our Current assets were $179,216, which consisted of $67,593 in Cash, $107,365 in Inventory, $3,317 in Prepaid expenses and $941 in Accounts receivable. Our Total assets were $1,081,035, which included $493,205 in Property and equipment (net), and $408,614 in Other assets. Our Current liabilities were $1,466,089, including $200,327 in Accounts payable and accrued expenses, $893,405 Due to related parties, and $323,832 in the Current portion of notes payable. Our Long-term liabilities were $2,956,663. Our total Stockholders’ deficit at December 31, 2010 was $3,341,717.

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.

Six months ended June 30, 2011 and 2010

Net cash used in operating activities for the six months ended June 30, 2011 was $6,673 as compared to $67,081 for the six months ended June 30, 2010. The decrease in cash used in operating activities over the comparable periods is primarily due to an increase of $73,359 of the overall change in the balances of operating assets and liabilities offset by an increase of $69,410 in net loss.

We expect that our cash provided by operating activities will decrease over the next twelve months as we purchase inventory and increase operating expenses as a result of opening one additional salon during the year ended December 31, 2011.

Cash Flows from Investing Activities

Six months ended June 30, 2011 and 2010

Cash flow used in investing activities for the six months ended June 30, 2011 was $6,491 as compared to $67,397 for the six months ended June 30, 2010. The decrease in cash flow used in investing activities is due to a decrease in purchases of property and equipment and long-term investments.

We expect to continue our investing activities, including purchasing both property and equipment and making both short and long-term equity investments.

Cash Flows from Financing Activities

Six months ended June 30, 2011 and 2010

Cash flow provided by financing activities for the six months ended June 30, 2011 was $33,369 as compared to $251,000 for the six months ended June 30, 2010. The decrease in cash flow provided by financing activities over the comparable period is due to an increase of payments on notes payable in the current period, which increase was offset by a decrease in the proceeds from the issuance of preferred stock and bank loan.

We expect to continue to use cash flow from financing activities in the near term as necessary to expand operations.

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Other Factors Affecting Liquidity and Capital Resources

We have insufficient current assets to meet our current liabilities due to negative working capital of $1,356,306 as of June 30, 2011. 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.

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

On October 27, 2008, we adopted The 2008 Benefit Plan of Green Endeavors, Inc. (the “Plan”) pursuant to which we may issue stock, or grant options to acquire our Voting Common Stock, par value $0.001 or our Series B Preferred Stock, par value $0.001(the “Stock”), to our employees or employees of our subsidiaries, on the terms and conditions set forth in the Plan (“Benefits”). The Plan is intended to aid us in maintaining and developing a management team, attracting qualified officers and employees capable of contributing to our future success. In addition, at the discretion of the Board of Directors, Benefits may be granted under this Plan to other individuals, including consultants or advisors, who contribute to our success or to the success of our subsidiaries, provided that bona fide services are rendered and such services are not in connection with the offer or sale of securities in a capital-raising transaction. No Stock may be issued, or options granted under the Plan to consultants, advisors, or other persons who directly or indirectly promote or maintain a market for our securities. We have issued 191,000 shares of Series B Preferred stock pursuant to the Plan as of June 30, 2011.

We have no contractual commitment with any of our officers or directors.

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, 2010 expressed substantial doubt as to our ability to continue as a going concern as a result of reoccurring 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 June 30, 2011 and December 31, 2010, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

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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
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
31.02	Certification of the Registrant’s Chief Financial 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
32.02	Certification of the Registrant’s Chief Financial 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: December 18, 2012	By: /s/ Richard D. Surber Richard D. Surber President, Chief Executive Officer and Director
DATE: December 18, 2012	By: /s/ Richard D. Surber Richard D. Surber Chief Financial Officer

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Green Endeavors, Inc. - FORM 10-Q/A - December 20, 2012

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Green Endeavors, Inc. Reports