UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2016
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	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
59 West 100 South, 2nd Floor, Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
(801) 575-8073
(Registrant's Telephone Number, including Area Code)
None
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class	Names of Each Exchange on which Registered
$0.0001 Common Stock	None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o  No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o  No  x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Yes  o  No  x

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 Act).  Yes  o  No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second quarter ended June 30, 2016 was $109,357.

On March 31, 2017, approximately 5,127,408 shares of the Registrant’s Common Stock, $0.0001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

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GREEN ENDEAVORS, INC. AND SUBSIDIARIES

Annual Report on Form 10-K

For the Year Ended December 31, 2016

Table of Contents

			PAGE
PART I.
Item 1.		Business	3
Item 1.	A.	Risk Factors	4
Item 1.	B.	Unresolved Staff Comments	7
Item 2.		Properties	7
Item 3.		Legal Proceedings	8
Item 4.		Mine Safety Disclosures	8
PART II.
Item 5.		Market for Registrant's Common Equity and Related Stockholder Matters	8
Item 6.		Selected Financial Data	9
Item 7.		Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7	A.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 8.		Financial Statements and Supplementary Data	14
Item 9.		Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	14
Item 9.	A.	Controls and Procedures	14
Item 9.	B.	Other Information	15
PART III.
Item 10.		Directors, Executive Officers, and Corporate Governance	15
Item 11.		Executive Compensation	16
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13.		Certain Relationships and Related Transactions and Director Independence	17
Item 14.		Principal Accountant Fees and Services	18
PART IV.
Item 15.		Exhibits and Financial Statement Schedules	19
		Signatures	43

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PART I.

Item 1. Business

This Annual Report on Form 10-K and the documents incorporated by reference in this Annual Report on Form 10-K contain forward-looking statements. Certain of such statements, including, but not limited to, statements regarding the extent and timing of future revenues and expenses and customer demand, statements regarding our reliance on third parties and other statements using words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will” and “would,” and words of similar import and the negatives thereof, constitute forward-looking statements. These statements are predictions based upon our current expectations about future events. 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 “Competition,” “Risk Factors,” “Results of Operations,” and “Liquidity and Capital Resources” sections contained in this Annual Report on Form 10-K and the risks discussed in our other Securities Exchange Commission, or SEC, filings, 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 Annual Report on Form 10-K. All subsequent written or spoken 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 Annual Report on Form 10-K are made only as of the date of this Annual Report on Form 10-K. 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.

We run 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. 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.

A third location opened in August of 2012, and operates as an Aveda™ Experience Center in City Creek Center, a high end shopping mall, located in the central business district of Salt lake City, Utah.  Aveda Experience Centers operate as retail outlets of Aveda™ branded products, including the full lines of hair care products, makeup, and skin care. The Experience Center also serves as a resource where potential clients can be referred to and make appointments for services at the two Landis Lifestyle Salons.

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.landissalon.com

Additional information on Green can be found on its website at www.green-endeavors.com

Products and Services

The salons offer high quality hair care and other salon services such as makeup, skin care and nail care. The salons incorporate the use of the Aveda line of products in all the services performed and exclusively offer Aveda retail product for sale. The Aveda brand, owned by Estee Lauder Companies, Inc., manufactures professional plant-based hair care, skin care, makeup, Pure-Fume™, and other lifestyle products. The products used during services and which are available for purchase, include the following for both men and women:

· Hair care - hair color and styling products, shampoos, conditioners and finishing sprays. 

· Makeup - lipsticks, lip glosses, mascaras, foundations, eye shadows, nail polishes, nail polish removers, and powders. 

· Skincare - moisturizers, creams, lotions, cleansers and sunscreens. 

· Fragrance - oils, candles, and a variety of fragrance products used on hair, the body, and in the home. 

These products are sold directly to a broad consumer base for personal use. Therefore, we do not rely on any single customer for product sales.

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Marketing and Sales

The target market for the salons are 70% female and 30% male, seeking customers with high expectations at a reasonable cost. The average customer in Salt Lake City is expected to visit the salon 6-8 times per year and spend an average of $66 on services and purchase about $16 of Aveda products per visit.

The Liberty Heights location was selected for its central location, high income demographics within easy driving distance, and the trendy nature of the area. The Marmalade location was chosen because of the high traffic count, high visibility, easy access from an I-15 freeway exit, trendy up and coming neighborhood, high income demographics within a 1 mile area east of the salon, ample parking, proximity to the new City Creek Shopping mall and the modern building that houses our facility. The primary marketing efforts of the salons continue to be word of mouth, supplemented by targeted advertising campaigns and referrals from existing customers. Our marketing campaigns are heavily focused on organically ranking under certain search terms online, and online sites such as Yelp and CitySearch, coupled with other social media sites.  The Landis Aveda Experience Center opened in August of 2012 in City Creek Center, the newest shopping mall located in downtown Salt Lake City and is a first class mall covering most of two city blocks with numerous high quality and attractive tenants.

Another form of marketing is done through community and charitable involvement. Our salons pride themselves in giving back to the community by sponsoring as many charitable events as possible which align with our values revolving around women’s issues, high fashion, environmental conservation and other community based programs.

Competition

The Company’s primary competition comes from other high end salons offering above-and-beyond customer service in the Salt Lake City market. The closest competitors offering a similar level of service that are within our area include: Lunatic Fringe, Salon Zazou, and Salon Keiji. Booth rental opportunities for stylists create competition in retaining stylists in our salons at competitive compensation levels.  Low cost salons with large scale hair cutting operations, such as Great Clips, Supercuts, and Fantastic Sams also compete for clients, and may be competing directly with our stylists that are training to become senior stylists. The price point of our entry level hair and color services in most cases is only slightly higher than some of the above mentioned discount hair cutting operations. However, they do not offer comparable extra services and products which is our competitive point of difference.

Employees

As of December 31, 2016, Landis employed 74 individuals, with approximately 65 providing salon and support services and 9 in management, administration and finance. None of our employees are represented by labor unions and we have experienced no work stoppages. We believe that our employee relations are good.

Item 1A. Risk Factors

Our business faces many risks. Described below are what we believe to be the material risks that we face. If any of the events or circumstances described in the following risks actually occurs, our business, financial condition or results of operations could suffer.

Our ability to continue as a going concern is in doubt absent obtaining adequate new debt or equity financing and achieving sufficient sales levels.

We have limited capital. Because we do not have sufficient working capital for continued operations for at least the next 12 months, our continued existence is dependent upon us sustaining operating profitability or obtaining the necessary capital to meet our expenditures. Our operating capital requirements, in excess of what is generated from operations, for the next 12 months are approximately $500,000. This primarily consists of the costs associated with our financial statement reporting obligations and costs associated with future expansion plans in 2017. At this time, we are still in the process of identifying additional salon locations within the Salt Lake Valley. The funding for our operations will primarily come from private investors purchasing our stock as well as obtaining traditional lines of credit and loans to finance equipment, furniture, leasehold improvements and operations. We cannot assure you that we will be able to generate sufficient sales or raise adequate capital to meet our future working capital needs.

The voting control held by Sack Lunch Productions Inc., (SAKL), creates an anti-takeover or change of control limitation. Sack Lunch currently holds voting control of the Company through its ownership of super voting preferred stock.

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As of March 31, 2017, the 10,000,000 shares of Super voting Preferred Stock (100 votes for each share) held by SAKL combined with the 4,183,081 shares of common stock provide SAKL with voting control over any proposal requiring a vote of the shareholders. Through its ownership of the preferred voting shares and common stock it holds voting rights equal to 1,004,183,081 shares of common stock. This effectively gives SAKL a veto over any attempt to take over or change control of the Company. Such an event would include a vote by the board of directors to conduct a reverse or forward split of the common stock. The shares held by SAKL thus have a strong anti-takeover effect. The interests of SAKL may not always conform to the interests of the common stockholders, in general, and thus its voting rights may not always be exercised in the best interests of the common stockholders of the Company.

Our business and our industry are affected by cyclical factors in the State of Utah, including the risk of a prolonged recession.

Our financial results are substantially dependent upon overall economic conditions in the State of Utah. General economic factors that are beyond our control, such as interest rates, recession, inflation, deflation, tax rates and policy, energy costs, unemployment trends, and other matters that influence consumer confidence and spending, may impact our business. In particular, visitation patterns to our salons can be adversely impacted by increases in unemployment rates and decreases in discretionary income levels.

A prolonged or a deepening recession in the United States, specifically in Utah, could substantially decrease the demand for our products and services below current levels and adversely affect our business. Our industry has historically been vulnerable to significant declines in consumption and product and service pricing during prolonged periods of economic downturn such as at present.

Recessions and other periods of economic dislocation typically result in a lower level of discretionary income for consumers. To the extent discretionary income declines, consumers may be more likely to reduce discretionary spending. This could result in our salon customers foregoing salon treatments or using home treatments as a substitute.

If we cannot improve same-store sales our business and results of operations may be affected.

Our success depends, in part, upon our ability to improve sales, as well as both gross margins and operating margins. A variety of factors affect comparable sales, including fashion trends, competition, current economic conditions, changes in our product assortment, the success of marketing programs and weather conditions. These factors may cause our comparable store sales results to differ materially from prior periods and from our expectations. If we are unable to improve our comparable sales on a long-term basis or offset the impact with operational savings, our financial results may be affected.

Changes in our key relationships may adversely affect our operating results.

We maintain key relationships with certain companies, including Aveda™. Termination or modification of any of these relationships could significantly reduce our revenues and have a material and adverse impact on our business, our operating results and our ability to expand.

Changes in fashion trends may impact our revenue.

Changes in consumer tastes and fashion trends can have an impact on our financial performance. For example, trends in wearing longer hair may reduce the number of visits to, and therefore, sales at our salons.

We are dependent on key personnel, specifically Richard Surber, our President and CEO.

We are dependent on the services of Richard Surber, our President, CEO, and a director. The Company has entered into an employment agreement with Mr. Surber, as losing his services would likely have an adverse effect on our ability to conduct business.

The salon operations are dependent on key personnel.

The operations of the two salons are dependent on the day to day management of current staff at those locations who work in the salons and train their personnel. Losing the services of these long term employees would likely have an adverse effect on the operations and business development of the salons.

Our success depends on our ability to attract and retain trained stylists in order to support our existing salon business and to staff future expansion.

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The salons are actively recruiting qualified candidates to fill stylist positions. There is substantial competition for experienced personnel in this area, which we expect to continue. We will compete for experienced candidates with companies who have substantially greater financial resources than we do. If we fail to attract, motivate and retain qualified stylists, it could harm our business and limit our ability to be successful and hamper expansion plans. For example, we will depend upon the expertise and training abilities of our current staff and management at the salons. Since we do not maintain insurance policies on any of our employees, if we lose the services of any key officers or employees it could harm our business and results of operations.

Changes in regulatory and statutory laws may result in increased costs to our business.

Our financial results can be adversely impacted by regulatory or statutory changes in laws. Due to the number of people we employ, laws that increase costs to provide employee benefits may result in additional costs to our business. Compliance with new, complex and changing laws may cause our expenses to increase. In addition, any non-compliance with these laws could result in fines, product recalls and enforcement actions or otherwise restrict our ability to market certain products, which could adversely affect our business, financial condition and results of operations.

If we are not able to successfully compete in our business segments, our financial results may be affected.

Competition on a market by market basis remains strong. Therefore, our ability to raise prices in certain markets can be adversely impacted by this competition. If we are not able to raise prices, our ability to grow same-store sales and increase our revenue and earnings may be impaired.

We face significant competition in the salon business, which could harm our sales and profitability.

The primary competition to our operations comes from salons offering excellent customer service in the Salt Lake Area market. We have identified our main competitors as Lunatic Fringe, Salon Zazou and Salon Keiji. We are also in competition with large scale hair cutting operations such as Great Clips, Supercuts, and Fantastic Sams, though these operations do not compete in offering the high-end services and products of our salons.

The loss of the Aveda™ line of products would damage the operation of our salons and have a significant and negative impact on our ability to operate and generate revenues.

Our salons offer the Aveda™ line of products, which are used almost exclusively in the services provided to customers of the salon and offered for retail sale at the salon location. Loss of the Aveda™ product line would have a significant and negative impact on the operation of the salons and their ability to generate revenues from either retail sales of health and beauty products or from providing services to consumers at the salon. We believe that the high quality and reputation of this line of products is key to our current operations and future success.

Changes in manufacturers' choice of distribution channels may negatively affect our revenues.

The retail products that we sell are licensed to be carried exclusively by professional salons. The products we purchase for sale in our salons are purchased pursuant to purchase orders, as opposed to long-term contracts, and generally can be terminated by the producer without much advance notice. Should the various product manufacturers decide to utilize other distribution channels, such as large discount retailers, it could negatively impact the revenue earned from product sales.

If we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions or private litigation and our reputation could suffer.

The nature of our business involves processing, transmission and storage of personal information about our customers. If we experience a data security breach, we could be exposed to government enforcement actions and private litigation. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to stop visiting our salons altogether. Such events could lead to lost future sales and adversely affect our results of operations.  Our internal reviews of our procedures help to ensure that our efforts to protect this information are working and will protect this personal information from disclosure.

Our stock price may be volatile.

The market price of our common stock is highly volatile and fluctuates widely in price in response to various factors, many of which are beyond our control, including the following:

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· Significant dilution 

· Our services or our competitors 

· Additions or departures of key personnel 

· Our ability to execute our business plan 

· Operating results that fall below expectations 

· Loss of any strategic relationship 

· Economic and other external factors 

· Period-to-period fluctuations in our financial results 

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Investors bear a risk that a liquid market may never develop and as a result, you may not be able to buy or sell our securities at the times you may wish and market liquidity may be limited.

Even though our securities are quoted on the “Pink Sheets,” that may not permit our investors to sell securities when and in the manner that they wish. There is not currently a significant volume of shares trading in the Company’s common stock and there may never be sufficient volume to create a liquid market such as to allow all shareholders to sell or buy shares whenever they desire. A liquid market for the sale of shares of the Companies securities may never develop.

Our common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.

Our common stock is and will be subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share or that have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for nine or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease three facilities for our salon and experience center operations in Salt Lake City Utah. We believe that these facilities are adequate for our current needs and that suitable additional or substitute space will be available as needed to accommodate any expansion of our operations.

Our Liberty Heights facility is located at 1298 South 900 East, Salt Lake City, Utah 84105. This lease is for a 4,000 square foot free standing commercial building with a term of five years beginning on October 1, 2015.

Our Landis II facility is located at 600 North 300 West, Salt Lake City, Utah 84103. This lease is for a 3,000 square foot commercial building with a term of ten years beginning on September 15, 2010 and the lease provides for two, five year extended terms.

Our Landis Experience Center location is in the City Creek Center shopping mall located in downtown Salt Lake City, Utah.  This 430 square foot store will focus on the sale of products only, no salon services will be provided.  The lease is for a period of seven years ending on July 31, 2019.

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Item 3. Legal Proceedings

From time to time, we are involved in various disputes and litigation that arise in the ordinary course of business. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, we accrue a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims and litigation matters and may revise estimates.

On November 23, 2016 TCA Global Credit Master Fund, LP, “TCA” gave SAKL a Notice of Default that SAKL is in default for 3 months payments that were due in accordance with the terms and provisions of the Senior Secured Credit Facility Agreement effective between the parties as of October 31, 2015.  Failure to cure the default may lead to further collection efforts by TCA.  Discussions to resolve the default are ongoing, the parties have agreed to forebear enforcement of the default until March 31, 2017.  Green, along with all other SAKL subsidiaries, is a co-guarantor of the TCA obligation.

While the outcome of disputes and litigation matters cannot be predicted with any certainty, management does not believe that the outcome of any current matters will have a material adverse effect on our consolidated financial position, liquidity or results of operations.

Item 4. Mine Safety Disclosures

None

PART II.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Our common stock is traded on the Pink Sheets under the symbol GRNE. We have never declared or paid any cash dividends on our common stock in the past, and we do not plan to pay cash dividends in the foreseeable future. Currently, there are no securities authorized for issuance and no compensation plans in place. All share and per share information included in this Annual Report on Form 10-K has been adjusted to reflect our August 2010 five for one forward stock split, the April 2013 one for two hundred reverse stock split and the July 2016 one for two thousand reverse stock split.

As of March 20, 2017, we had approximately 3,500 registered stockholders and approximately four beneficial owners of our common stock.

The following table sets forth the high and low sales prices of our common stock for each quarter in the two-year period ended December 31, 2016:

	High	Low
2016
First Quarter	$0.80	$0.20
Second Quarter	$1.00	$0.20
Third Quarter	$0.51	$0.02
Fourth Quarter	$0.56	$0.20
2015
First Quarter	$15.80	$5.00
Second Quarter	$9.60	$3.00
Third Quarter	$6.20	$1.00
Fourth Quarter	$2.00	$0.20

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2015 Benefit Plan of Green Endeavors, Inc.

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 40,000 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 $9.00 to $12.00 per share for an aggregate of 18,000 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.  The promissory notes mature in 12 months from their issuance date and the Company is entitled to 4% interest per annum.

On July 9, 2015, the Board of Directors approved an amendment to the 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 50,000 additional shares of the Company’s common stock (par value $0.0001) are authorized to be issued or granted to employees under the Amendment to the 2015 Plan.

On July 9, 2015 the Board of Directors approved a grant of 6,750 shares pursuant to the S-8 Registration Statement and 2015 Benefit Plan of Green Endeavors Inc. The shares were issued based on an option price of $3.00 per share. The employee exercised the options on the same day they were granted by issuing a promissory note to the Company that will appear on the balance sheet as a subscription receivable. The promissory note matures 12 months from its issuance date and the Company is entitled to 4% interest per annum.  On March 7, 2017 the Company entered into a note extension agreement with the holder of a promissory note related to a stock subscription.  The due date was extended to June 30, 2017 and any interest owing was waived.

Recent Sales of Unregistered Equity Securities

On October 24, 2016 the Company entered into a marketing agreement to receive six months services for 350,000 shares of the Company’s common stock.

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.

Reverse Stock Split

On June 27, 2016 we filed an amendment to our articles of incorporation to effect a 1-for-2000 reverse stock split of our common stock and to reduce the number of authorized common shares from 10,000,000,000 to 2,000,000,000.  All share and per share amounts relating to the common stock included in the financial statements have been restated to reflect the reverse stock split. This corporate action took effect on July 21, 2016.

Item 6. Selected Financial Data

Item 301(c) of Regulation S-K states that Smaller reporting companies, as defined by section 229.10(f)(1) of Regulation S-K, are not required to provide this information.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This annual report, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company contains or may contain "forward-looking statements" within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management's best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, "may," "believe," "project," "forecast," "expect," "estimate," "anticipate," and "plan." In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include but are not limited to competition within the personal hair care industry, price sensitivity; changes in economic conditions and in particular, continued weakness in the U.S. economies; changes in consumer tastes and fashion trends; the ability of the Company to maintain compliance with financial covenants in its credit agreements; labor and benefit costs; legal claims; the continued ability of the Company to obtain suitable locations and financing for new salon development and to maintain satisfactory relationships with landlords with respect to existing locations; governmental initiatives such as minimum wage rates, taxes; the ability of the Company to maintain satisfactory relationships with suppliers; or other factors not listed above. The ability of the Company to meet its expected revenue growth is dependent on salon acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A of this Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC.

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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 December 31, 2016, 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 in August of 2012, and operates as an Aveda Experience Center ("LEC") in the City Creek Center shopping mall in downtown 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.

Accounting Assumptions, Judgments, and 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

The following discussion examines our results of operations and financial condition based on our consolidated financial statements for the years ended December 31, 2016 and 2015.

For the year ended December 31, 2016 and 2015, we operated three wholly owned subsidiaries.  Two of the subsidiaries, Landis Salons, Inc. and Landis Salons II, Inc., operate as full-service hair and retail salons featuring the Aveda™ line of products. The third subsidiary, Landis Experience Center, LLC, is a retail Aveda experience center.

Revenue

We generate revenue through the sale of services and products in the hair salon industry. For the years ended December 31, 2016 and 2015, we had net sales of $3,389,810 and $3,028,006, respectively. Our net sales increased by $361,804 or 11.95% for the year ended December 31, 2016 compared to 2015.

The following table shows the change in service revenue by salon for the years ended December 31, 2016 and 2015:

	Year Ended December 31,		Increase (Decrease) over prior period
Salon	2016	2015	Dollar	%
Liberty Heights	$   1,943,767	$       1,608,038	$               335,729	20.88
Marmalade	666,829	590,276	76,553	12.97
City Creek	17,143	-	17,143	100.00
	$   2,627,739	$       2,198,314	$               429,425	19.53

This increase in service revenue is due to the retention of stylist staff. Revenue from new stylists tends to be lower as they are trained and begin to acquire new clients, but increases over time. We had several new stylists in 2015 that have continued with us in 2016 as a result revenues have increased for the year.

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The following table shows the change in product revenue by salon for the years ended December 31, 2016 and 2015:

	Year Ended December 31,		Increase (Decrease) over prior period
Salon	2016	2015	Dollar	%
Liberty Heights	$      429,800	$          456,635	$                (26,835)	(5.88)
Marmalade	138,148	173,464	(35,316)	(20.36)
City Creek	194,123	199,593	(5,470)	(2.74)
	$      762,071	$          829,692	$                (67,621)	(8.15)

Lower product sales are believed to be a national trend coupled with the fact that a larger proportion of our staff are newer hires resulting from our hiring push.  Newer stylists tend to sell less product until they are fully trained.

Cost of Revenue

The following table shows cost of revenue as a percentage of related revenue for the years ended December 31, 2016 and 2015:

	Year Ended December 31,
Revenue Type	2016	2015
Service	56.5%	54.0%
Product	60.5%	56.4%

The above table shows the cost of services as a percentage of revenue increased by 2.5% for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The cost of product as a percentage of revenue increased by 4.1% for the year ended December 31, 2016 as compared to the year ended December 31, 2015. This increase in cost is primarily due to the higher personnel costs associated with stylists earning higher wage rates as they become more established with the salons.  The increase in inventory is also attributable to inefficiencies of product usage by newer, less trained employees and ongoing price increases from the supplier.

Operating Expenses

For the year ended December 31, 2016 we had a net loss of $298,460 as compared to net loss of $884,543 for the year ended December 31, 2015 a $586,083 (66.3%) change. The decrease in loss is attributable to an increase in service revenue in 2016 over 2015 as a result of higher production due to retaining salon stylists, offset in part by an increase in total costs and expenses of $46,244

General and administrative

The following table shows General and Administrative expense for the years ended December 31, 2016 and 2015:

	Year ended December 31,
	2016	2015	Change	%
Salaries and wages	$   415,123	$   641,434	$(226,311)	(35)
Rent	173,140	187,214	(14,074)	(8)
Advertising	95,214	136,150	(40,936)	(30)
Credit card merchant fees	50,441	54,451	(4,010)	(7)
Insurance	58,519	47,782	10,737	22
Utilities and telephone	58,347	53,855	4,492	8
Professional services	142,842	176,746	(33,904)	(19)
Repairs and maintenance	43,911	24,605	19,306	78
Dues and subscriptions	31,263	30,040	1,223	4
Office expense	170,315	61,046	109,269	179
Travel	16,479	15,724	755	5
Investor relations and company promotion	70,108	129,541	(59,433)	(46)
Other	44,031	38,385	5,646	15
Total general and administrative expenses	$1,369,733	$1,596,973	$(227,240)	(14)

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The decrease in general and administrative expenses is primarily due to the decrease in salaries and wages, investor relations and company promotion, and advertising offset by an increase in office expense.  The decrease in salaries and wages was primarily due to stock based compensation incurred during 2015 along with a reduction of support staff at all locations.  Corporate overhead charges increased in office expense with corresponding decreases in investor relations and promotions.

Other Income, (Expense)

The following table shows other income and (expense) for the years ended December 31, 2016 and 2015:

	Year Ended December 31,
Other Income, (Expense)	2016	2015	Variance	%
Interest expense (net)	$         (267,096)	$      (416,057)	$            148,961	(36)
Gain (loss) on derivative fair value adjustment	51,314	(86,992)	138,306	(159)
Loss on stock subscription receivable	-	(155,488)	155,488	(100)
Gain on settlement of debt	(40,883)	110,220	(151,103)	(137)
Other income (expense)	(3,260)	17,869	(21,129)	(118)
Total	$         (259,925)	$      (530,448)	$            270,523	(51)

The change is primarily related to a decrease in interest expense resulting from a decrease in interest bearing debt, the change in the derivative fair value, the loss on subscription receivables in the prior year and the gain on settlement of debt recorded in the prior year. The interest expense decrease is more specifically related to the settlement of a related party note and accrued interest in the amount of $2,190,896 with SAKL for the issuance of 230,621 shares of Series B and 3,843,686 shares of common stock.

Liquidity and Capital Resources

Cash and Investments in marketable securities

As of December 31, 2016, our principal source of liquidity consisted of $347,284 of cash, as compared to $150,459 as of December 31, 2015. Our primary sources of cash during the year ended December 31, 2016 were customer payments for salon services and products and cash proceeds from the issuance of notes payable. Our primary uses of cash in the year ended December 31, 2016 were payments relating to salaries, benefits, rent, and other general operating expenses as well as payments of notes payable.

Working Capital

	December 31,	December 31,
Working Capital	2016	2015	Variance	%
Current Assets	888,416	533,789	$            354,627	66
Current Liabilities	1,796,287	1,405,543	$            390,744	28
Working Capital Deficit	$         (907,871)	$      (871,754)	$             (36,117)	4

The decrease in working capital is primarily due to an increase in the current portion of notes payable, and related party payables.

Cash Flows from Operating Activities

Cash flows from operating activities include net income (loss), adjusted for certain non-cash charges, as well as changes in the balances of certain assets and liabilities.  Net cash provided by (used in) operating activities for the year ended December 31, 2016 and 2015 was $213,927 and $118,840, respectively.

Cash Flows from Investing Activities

Cash flows used in investing activities for the years ended December 31, 2016 and 2015 were $68,485 and $217,011, respectively. Investing activities are related to the purchase of equipment and leasehold improvements. These purchases are made based on the need for new technologies and replacements due to wear and tear and obsolescence.  Investing activities also include the activity from notes receivable to related parties.

We expect to continue our investing activities, including purchasing property and equipment.

Cash Flows from Financing Activities

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Cash flow provided by financing activities for the years ended December 31, 2016 and 2015 was $51,383 and $148,002, respectively.  For the year ended December 31, 2016, the Company borrowed $908,000 on notes payable and paid $795,709 toward notes.

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

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 Salons LLC 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 the greater of $0.0001 or 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 holder of the Debenture. All obligations under the debenture were settled with SAKL on September 30, 2016 through the issuance of common and preferred stock.

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 December 31, 2016 and 2015, we had no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Critical Account Policies and Estimates

The preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles, or “GAAP,” is based on the selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain. We consider the accounting policies discussed below to be critical to the understanding of our financial statements. Actual results could differ from our estimates and assumptions, and any such differences could be material to our consolidated financial statements.

New Accounting Standards

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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide this information, 305(c).

Item 8. Financial Statements and Supplementary Data

The financial statements required by Item 8 are submitted as a separate section of this Annual Report on Form 10-K. See Item 15, “Exhibits and Financial Statement Schedules.”

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None

Item 9A. 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 our Chief Executive Officer, or CEO, and our Chief Financial Officer, or CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2016.

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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 Annual Report on Form 10-K. 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 December 31, 2016, 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.

Inherent Limitations on Effectiveness of Internal Control over Financial Reporting and Disclosure Controls and Procedures

Our management, including the 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. An internal control framework, 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 controls 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 internal control, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Green have been detected.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. Our management has concluded that, as of December 31, 2016, our internal control over financial reporting is not effective. We base this analysis on the simple fact that due to the size of the Company there may not be, from time to time, sufficient attention given to the five components of effective internal control over financial reporting as issued by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The five components are: the control environment, risk assessment, control activities, information and communication, and monitoring activities. We are a small entity that does not have sufficient segregation of duties and we also may not have from time to time sufficient personnel to ensure timely and accurate financial reporting. This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

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.

Item 9B. Other Information

None.

PART III.

Item 10. Directors, Executive Officers and Corporate Governance

Executive Officers of the Registrant

The following table provides information regarding the executive officers of Green as of December 31, 2016:

Name	Age	Positions and Offices
Richard D. Surber	43	President, CEO, CFO and Director
Logan C. Fast	30	Vice President and Director
Stephen M. Cole	72	Director

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Our executive officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors.

Richard D. Surber - Mr. Surber graduated from the University of Utah with a Bachelor of Science degree in Finance and then with a Juris Doctorate with an emphasis in corporate law, including securities, taxation and bankruptcy. He has served as President and Director of Sack Lunch Productions, Inc. since May of 1999. He has been an officer and director of several public companies. He was appointed as president and to the board of directors of Green Endeavors, Inc. in September of 2007.

Logan C. Fast - Mr. Fast was appointed to these offices as of August 28, 2008. He is currently working as a grand salon stylist and as an instructor at the Landis Salon locations. Mr. Fast is an Aveda color and cutting "purefessional" within the Aveda network and frequently instructs stylist around the world on Aveda cutting and color techniques. Mr. Fast does not hold any position as officer or director of any other publicly held company.

Stephen M. Cole - earned his B.S.B.A. from Chicago’s Roosevelt University. In 1997 he founded The Wall Street Organization, Inc. a financial services company that assists start-ups and operating companies with their capital formation. He is listed in Who’s Who in America Sixty Fourth Edition 2010. Mr. Cole does not hold any position as officer or director of any other publicly held company.

There are no family relationships among any officer or director of Green Endeavors, Inc.

Item 11. Executive Compensation

The following table sets forth the compensation of the named executive officer for each of the two years ended December 31, 2016 and 2015:

				Stock
Name and Principal Position	Year	Salary ($)	Bonus ($)	Awards ($)	Total ($)
Richard D. Surber - President, CEO, CFO, and Director (1)	2016	$85,500	$-	$-	$85,500
	2015	$97,500	$-	$-	$97,500
Logan C. Fast - Vice President, Director (1)(2)	2016	$73,260	$-	$-	$73,260
	2015	$82,064	$-	$-	$82,064
Stephen M. Cole – Director (3)	2016	$1,000	$-	$-	$1,000
	2015	$-	$-	$-	$-

(1) Compensation for services not related to positions as director. 

(2) Wages received for services performed as a stylist and an educator at the salons. 

(3) Director compensation 

No director compensation was paid or accrued during the year ended December 31, 2015.

On January 24, 2017 the Board of Directors approved Employment Agreements with Richard Surber and Logan C. Fast, the term of employment to start January 1, 2017 and ending on December 31, 2021.  Mr. Surber is to serve as the President of Green and his compensation will be $150,000 per year and Mr. Fast is to serve as the Vice President of Green and his compensation will be $60,000 per year.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information concerning the ownership of the Company's stock with respect to: (i) each person known to the Company to be the beneficial owner of more than five percent of the Company's stock; (ii) all directors; and (iii) directors and executive officers of the Company as a group. The notes accompanying the information in the table below are necessary for a complete understanding of the figures provided below. As of March 31, 2017, there were 5,127,408 shares of common stock issued and outstanding.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Super voting Preferred ($0.001 par value)	Sack Lunch Productions, Inc. (1)
	59 West 100 South, 2nd Floor	10,000,000	100%
	Salt Lake City, Utah 84101
Preferred Series "B" Stock	Richard D. Surber
($0.001 par value)(2)	59 West 100 South, 2nd Floor	37,134	0.039%
	Salt Lake City, Utah 84101
Voting Common Stock	Richard D. Surber
($0.0001 par value)(2)	59 West 100 South, 2nd Floor	2,035	0.0004%
	Salt Lake City, Utah 84101
Preferred Series "B" Stock	Logan C. Fast
($0.001 par value)(2)	59 West 100 South, 2nd Floor	2,000	0.0021%
	Salt Lake City, Utah 84101
Voting Common Stock	Sack Lunch Productions, Inc. (1)
($0.0001 par value)(2)	59 West 100 South, 2nd Floor	4,183,081	81.58%
	Salt Lake City, Utah 84101
Preferred Series "B" Stock	Directors and Executive Officers
($0.001par value)	as a Group (including beneficial	39,134	0.041%
	ownership) (1)
Voting Common Stock	Directors and Executive Officers
($0.0001 par value)(2)	as a Group (including beneficial	4,185,116	81.62%
	ownership) (1)
Super voting Preferred ($0.001 par value)	Directors and Executive Officers
	as a Group (including beneficial	10,000,000	100%
	ownership) (1)

(1)   Richard Surber may be deemed a beneficial owner of 4,183,081 shares of the Company's common stock by virtue of his position as an officer and director of Sack Lunch Productions Inc. and of 10,000,000 shares of Super Voting Preferred by virtue of his positions with Sack Lunch Productions, Inc.

Change in Control

There are no agreements, pledges or arrangements of any kind that could affect a change in control of Green Endeavors, Inc.

Item 13. Certain Relationships and Related Transactions and Director Independence

Related Transactions

Green shares its corporate office space, certain personnel, and lines of credit with Sack Lunch Productions, Inc. or entities controlled by Sack Lunch under the direction of Richard Surber.

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 for several lines of credit, credit cards, and loans, for the Company with remaining principal balances of approximately $285,000. Subsequent to December 31, 2016, 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 $600,000 from time to time.

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During the year ended December 31, 2016, the Company issued 230,621 shares of Series B and 3,843,686 shares of common stock for cancellation of the related party convertible debenture and accrued interest in the amount of $2,190,896. During the year ended December 31, 2015, the Company converted $66,000 of debenture principle and $44,636 of related accrued interest into 582,293,105 shares of the Company’s common stock.

As of December 31, 2016 and 2015, amounts due to related parties are $632,802 and $424,804, respectively. The $632,802 consists of $5,000 of accrued interest for the note payable to Richard Surber and $627,802 for various amounts owed to Sack Lunch’s subsidiaries. The $424,804 consists of $6,204 of accrued interest for the note payable to Richard Surber and $418,600 from various amounts owed to Sack Lunch's subsidiaries.

Promissory Notes

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. The notes have been paid in full as of September 15, 2016.

Effective October 16, 2015, Sack Lunch Productions, Inc. (Green’s parent corporation “SAKL”) closed a Credit Agreement (the “Credit Agreement”) with SAKL, as borrower, and the Company’s subsidiaries as joint and several guarantors and TCA Global Credit Master Fund, LP, (“TCA”).  Pursuant to the Credit Agreement, TCA loaned SAKL an initial amount of $1,800,000. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Convertible Promissory Note (the “Note”) and the repayment of the Note is secured by a first position security interest in substantially all of SAKL’s assets in favor of TCA, as evidenced by a Security Agreement by and between SAKL and TCA (the “Company Security Agreement”) and a first position security interest in substantially all of the Subsidiaries’ assets, including Green Endeavors, in favor of TCA. The Note is due and payable, along with interest thereon, fifteen months following the effective date of the Note, and bears interest at the rate of 12% per annum.  On November 23, 2016 TCA gave SAKL a Notice of Default that SAKL is in default for 3 months payments that were due in accordance with the terms and provisions of the Senior Secured Credit Facility Agreement effective between the parties as of October 31, 2015.  Failure to cure the default may lead to further collection efforts by TCA.  Discussions to resolve the default are ongoing.  Green, along with all other SAKL subsidiaries, is a co-guarantor of the TCA obligation.

On September 3, 2016 Landis Salons Inc. entered into a Memorandum of Intercompany Loan with Color Me Rad LLC, a related party, to advance $200,000. This sum is to be repaid in weekly payments of not less than $4,350, with interest at the rate of 20.1% per annum.

On March 28, 2016 Landis Salon, Inc. entered into a Promissory Note agreement with SAKL, to advance $310,000 with an interest rate of 18%.  This sum is to be repaid in weekly payments of $7,200.

Director Independence

Our Board of Directors has 1 independent member. Mr. Cole is not employed in any capacity by the Company or its affiliates. There are no committees made up of less than all members of the board for audit, nominating, compensation or hiring purposes. Based upon the size of the Company and its limited resources there are currently not sufficient resources to expand the size of the board and operate committees for these purposes. The Board of Directors has always operated as a whole and has not proceeded without the other member(s) of the board consenting to any action.

Item 14. Principal Accountant Fees and Services

Sadler, Gibb & Associates, L.L.C. (SGA) served as our independent registered public accounting firm for the years ended December 31, 2016 and 2015. They were paid $47,120 and $44,529 for services rendered during those years respectively.

Audit Fees

The aggregate fees billed for professional services rendered by our principal accountants for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2016 and 2015 were $47,120 and $44,529, respectively.

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Audit Related Fees

There were no fees billed for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of the financial statements, other than those previously reported above, for the years ended December 31, 2016 and 2015.

Tax Fees

There were no fees billed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning for the years ended December 31, 2016 and 2015.

All Other Fees

There were no other fees billed for products or services provided by our principal accountant, other than those previously reported above, for the years ended December 31, 2016 and 2015.

PART IV.

Item 15. Exhibits and Financial Statement Schedules

		Page
(a) 1.  Financial Statements
	Report of Independent Registered Public Accounting Firm	20
	Consolidated Balance Sheets as of December 31, 2016 and 2015	21
	Consolidated Statements of Operations for the years ended December 31, 2016 and 2015	22
	Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2016 and 2015	23
	Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015	24
	Notes to Consolidated Financial Statements	25
(a) 2.  Financial Statement Schedules

All other schedules are omitted because they are not required or the required information is shown in the Consolidated Financial Statements or Notes thereto.

(a) 3.  Exhibits

The exhibits listed in the accompanying Exhibit Index (following the Signatures section of this Annual Report on Form 10-K) are filed or incorporated by reference as part of this Annual Report on Form 10-K.

The exhibits filed or incorporated by reference as part of this Annual Report on Form 10-K contain agreements to which Green Endeavors, Inc. is a party. These agreements are included to provide information regarding their terms and are not intended to provide any other factual or disclosure information about Green Endeavors, Inc. or the other parties to the agreements. Certain of the agreements contain representations and warranties by each of the parties to the applicable agreement, and any such representations and warranties have been made solely for the benefit of the other parties to the applicable agreement as of specified dates, may apply materiality standards that are different than those applied by investors, and may be subject to important qualifications and limitations that are not necessarily reflected in the agreement. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time, and should not be relied upon as statements of factual information.

20

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Green Endeavors, Inc.

We have audited the accompanying consolidated balance sheets of Green Endeavors, Inc. (“the Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two year period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Green Endeavors, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 17 to the consolidated financial statements, the Company has suffered net losses and has accumulated a significant deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 17. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sadler, Gibb & Associates, LLC

Salt Lake City, UT

March 31, 2017  

 

21

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Green Endeavors, Inc. and Subsidiaries
Consolidated Balance Sheets
			December 31,	December 31,
			2016	2015
Assets
Current Assets:
	Cash and cash equivalents		$347,284	$150,459
	Accounts receivable		15,397	15,967
	Inventory		152,790	138,928
	Prepaid expenses		124,167	31,513
	Notes receivable - current		-	-
	Notes receivable, related party - current		248,778	196,922
		Total current assets	888,416	533,789
Property, plant, and equipment, net of accumulated depreciation of $969,934 and $857,236, respectively			269,831	293,068
Other assets			21,405	24,475
	Total Assets		$1,179,652	$851,332
Liabilities and Stockholders’ Deficit
Current Liabilities:
	Accounts payable and accrued expenses		$363,075	$344,052
	Deferred revenue		86,223	66,048
	Deferred rent		74,636	86,818
	Due to related parties		632,802	424,804
	Derivative liability		108,297	209,610
	Current portion of notes payable, net of discount of $20,291 and $0, respectively		434,695	152,089
	Current portion of notes payable, related party		61,559	67,990
	Current portion of capital lease obligations		-	10,038
	Convertible notes payable, net of debt discount of $0 and $5,889, respectively		35,000	44,094
		Total current liabilities	1,796,287	1,405,543
Long-Term Liabilities:
	Notes payable		50,397	152,028
	Notes payable, related party		-	14,389
	Capital lease obligations		-	-
	Convertible notes payable, net of debt discount of $0 and $30,390, respectively		-	8,110
	Convertible debentures, related party, net of debt discount of $0 and $29,218, respectively		-	2,118,373
		Total long-term liabilities	50,397	2,292,900
Total Liabilities			1,846,684	3,698,443
Commitments and contingent liabilities			-	-
Stockholders’ Deficit:
	Convertible super-voting preferred stock, $0.001 par value, 10,000,000 shares authorized; 10,000,000 shares issued and outstanding at December 31, 2016 and December 31, 2015; no liquidation value		10,000	10,000
	Convertible preferred series B stock - $0.001 par value, 2,000,000 shares authorized, 956,447 and 734,607 shares issued and outstanding at December 31, 2016 and December 31, 2015 respectively		956	735
	Preferred, undesignated stock - $0.001 par value 3,000,000 shares authorized, no shares issued and outstanding at December 31, 2016, and December 31, 2015		-	-
	Common stock, $0.0001 par value, 2,000,000,000 shares authorized; 5,127,408 and 618,174 shares issued and outstanding at December 31, 2016, and December 31, 2015, respectively		511	62
	Subscription receivable		(38,400)	(76,800)
	Additional paid-in capital		3,745,224	1,305,755
	Accumulated deficit		(4,385,323)	(4,086,863)
		Total stockholders’ deficit	(667,032)	(2,847,111)
Total Liabilities and Stockholders’ Deficit			$1,179,652	$851,332
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Green Endeavors, Inc. and Subsidiaries
Consolidated Statements of Operations
			Year Ended
			December 31, 2016	December 31, 2015
Revenue:
	Services, net of discounts		$2,627,739	$2,198,314
	Product, net of discounts		762,071	829,692
		Total revenue	3,389,810	3,028,006
Costs and expenses:
	Cost of services		1,484,960	1,187,437
	Cost of product		460,954	467,782
	Depreciation		112,698	129,909
	General and administrative		1,369,733	1,596,973
		Total costs and expenses	3,428,345	3,382,101
Loss from operations			(38,535)	(354,095)
Other income (expenses):
	Interest income		3,442	5,544
	Interest expense		(151,418)	(232,954)
	Interest expense, related parties		(119,120)	(188,647)
	Gain (loss) on derivative fair value adjustment		51,314	(86,992)
	Gain on settlement of debt		-	110,220
	Loss on stock subscription receivable		(40,883)	(155,488)
	Other income (expense)		(3,260)	17,869
		Total other expenses	(259,925)	(530,448)
Loss before income taxes			(298,460)	(884,543)
	Provision for income taxes		-	-
Net loss			$(298,460)	$(884,543)
Loss per common share – basic and diluted
		Basic and diluted loss per common share	$(0.17)	$(5.34)
		Weighted-average common shares outstanding	1,809,602	165,715
The accompanying notes are an integral part of these condensed consolidated financial statements.

23

Green Endeavors, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Deficit
	Super Voting Preferred Stock		Series B Preferred Stock		Common Stock		Additional Paid in Capital	Retained Earnings (Deficit)	Subscription Receivable	Total Stockholders’ Deficit
	Shares	Amount	Shares	Amount	Shares	Amount
Balance as of December 31, 2014	10,000,000	10,000	760,488	760	97,707	10	663,078	(3,202,320)		(2,528,472)
Conversion of series B preferred shares into common shares			(8,976)	(8)	9,212		8			-
Series B preferred shares redeemed for cash			(2,700)	(3)			(2,697)			(2,700)
Conversion of debt and Class B preferred shares to common shares			(14,205)	(14)	5,115	1	(35,207)			(35,220)
										-
Common shares issued for subscription receivable					36,750	4	435,350		(295,050)	140,304
Payments on subscription receivable									62,762	62,762
Loss on settlement of subscription receivable									155,488	155,488
Common stock issued for convertible debt					178,243	18	66,084			66,102
Change in derivative due to conversion							68,532			68,532
Conversion of debt and accrued interest to common stock					291,147	29	110,607			110,636
Net loss for the year ended December 31, 2015								(884,543)		(884,543)
Balance as of December 31, 2015	10,000,000	10,000	734,607	735	618,174	62	1,305,755	(4,086,863)	(76,800)	(2,847,111)
Convert debt and accrued interest to common stock					226,339	22	24,221			24,243
Settle Subscription receivable									38,400	38,400
Derivative change due to conversion							50,000			50,000
Convert preferred shares to common			(8,781)	(9)	85,729	8	1			-
Convert debenture and accrued interest to stock			230,621	230	3,843,686	384	2,190,282			2,190,896
Common shares issued for services					350,000	35	174,965			175,000
Fractional split shares issued					3,480					-
Net loss for the year ended December 31, 2016								(298,460)		(298,460)
Balance as of December 31, 2016	10,000,000	10,000	956,447	956	5,127,408	511	3,745,224	(4,385,323)	(38,400)	(667,032)
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
					Year Ended
					December 31,
					2016	2015
Cash Flows from Operating Activities:
	Net loss				$       (298,460)	$       (884,543)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation			112,698	129,909
		Amortization of debt issuance costs			98,437	148,708
		Stock-based compensation			58,333	140,304
		Gain on forgiveness of capital lease			-	(3,256)
		Gain on settlement of debt			-	(110,220)
		Loss on subscription receivable			40,883	155,488
		(Gain) Loss on derivative liability fair value adjustment			(51,314)	86,992
		Initial derivative expense			-	27,178
		Changes in operating assets and liabilities:
			Accounts receivable		570	(203)
			Certificate of deposit		-	28,660
			Inventory		(13,862)	13,830
			Prepaid expenses		(4,737)	-
			Other assets		3,070	-
			Notes receivable		(10,821)	(735)
			Accounts payable and accrued expenses		19,023	7,483
			Due to (from) related parties		252,114	392,308
			Deferred rent		(12,182)	(16,356)
			Deferred revenue		20,175	3,293
				Net cash used in operating activities	213,927	118,840
Cash Flows from Investing Activities:
	Purchases of property, plant, and equipment				(24,967)	(20,824)
	Payments on related party note receivable				(310,000)	(196,187)
	Proceeds from related party note receivable				266,482	-
		Net cash used in investing activities			(68,485)	(217,011)
Cash Flows from Financing Activities:
	Payments made on notes payable				(795,709)	(604,672)
	Payments made on convertible debt				(30,050)	(16,915)
	Payments made on related party notes payable				(20,820)	(4,953)
	Payments made on capital lease obligations				(10,038)	(21,352)
	Proceeds from issuance of notes payable				908,000	567,750
	Proceeds from issuance of related party notes payable				-	35,082
	Proceeds from issuance of stock subscriptions				-	62,762
	Proceeds from issuance of convertible notes payable				-	133,000
	Proceeds from Class B shares redeemed				-	(2,700)
		Net cash provided by financing activities			51,383	148,002
Change in cash					196,825	49,831
Cash at beginning of period					150,459	100,628
Cash at end of period					$         347,284	$         150,459
Supplemental cash flow information:
	Cash paid during the period for:
		Interest			$           76,517	$         100,103
	Non-cash investing and financing activities:
		Debt discount on derivative liability, convertible notes			$                    -	$         132,548
		Conversion of preferred shares to common stock			$                     9	$              1,842
		Return of Series B preferred stock			$                    -	$                   14
		Exercised options for subscription receivable			$                    -	$         295,050
		Conversion of debt to common stock			$           74,244	$         134,634
		Settlement of debt			$                    -	$           35,805
		Conversion of related party debt to common stock			$      1,095,452	$         110,636
		Conversion of related party debt to Series B preferred stock			$      1,095,444	$                    -
		Deferred finance costs			$                    -	$           45,130
		Original issue discount			$                    -	$              3,500
		Common stock issued for prepaid services			$         175,000	$                    -
		Property and Equipment purchased under a note payable			$           64,495	$                    -
The accompanying notes are an integral part of these condensed consolidated financial Statements.

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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. 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 2,000,000,000 shares authorized; preferred with 3,000,000 shares authorized; convertible preferred with 2,000,000 shares authorized; and, convertible super voting preferred with 10,000,000 shares authorized. Green is quoted on the Pink Sheets as an OTCQB issuer 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. LEC opened its doors August 16, 2012.

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Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Note 2 – Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying 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.

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.

Cash and Cash Equivalents

Investments with original maturities of three months or less at the time of purchase are considered cash equivalents. As of December 31, 2016 and 2015, Green had no cash equivalents.

Concentration of Credit Risk and Accounts Receivable

Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States.  The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000.  The risk is managed by maintaining all deposits in high quality financial institutions.  The company had no deposits in excess of federally insured limits at December, 2016 and 2015. Accounts receivable represents the balance owed to LEC by Aveda as a rebate owed to LEC for inventory purchases.  The Company has experienced no credit write-offs to this account and no allowance has been provided.  

Inventory

Inventories consist of hair care products used in our salon operations and are stated at the lower of cost or market.  Cost is principally 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:

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

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 flows. There were no impairments of long-lived assets during the years ended December 31, 2016 and 2015.

27

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

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 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. Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition” summarizes the SEC’s views in applying generally accepted accounting principles to revenue recognition in financial statements. SAB No. 104 establishes the SEC’s view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence that an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured. Further, SAB No. 104 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. We believe that our revenue recognition policies are in compliance with SAB No. 104.

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.

Advertising

The Company expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. For the years ended December 31, 2016 and 2015, advertising costs amounted to $95,214 and $165,302, respectively.

Stock-Based Compensation

Green recognizes the cost of employee and non-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

The Company has adopted the ASC 740 “Income Taxes” as of its inception. The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

28

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Earnings (Loss) Per Share

Net income (loss) per share is computed by dividing net income (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. Because the effects of these conversions would be anti-dilutive we do not include this in our calculation of earnings per share.

The following table shows the calculation of diluted common shares.
		Diluted Shares
		2016
Potential shares issued due to conversion of Series B Preferred Stock		9,949,168
Potential shares issued due to conversion of convertible debt		445,213
Potential shares issued due to conversion of Super voting shares		1,000,000,000
	Total potentially dilutive shares	1,010,394,381
Common diluted shares outstanding		1,809,602
	Total diluted shares	1,012,203,983

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.

In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact and expect the ASU will not have a material impact on our consolidated financial statements.

In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax benefits and deficiencies to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We will adopt this ASU in the first quarter of 2017 by incorporating it into our stock-based compensation plan. As we do not currently have any outstanding potential forfeitures this change will not retroactively affect our financial statements.

In October 2016, the FASB issued an ASU amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact and expect the ASU will not have a material impact on our consolidated financial statements.

Reclassification of Financial Statement Accounts

Certain amounts in the December 31, 2015 financial statements have been reclassified to conform to the presentation in the December 31, 2016 financial statements. In 2015 the Gain on settlement of debt and the loss on stock subscription receivable were presented as a net number on the face of the statement of operations. In 2016 this has been revised to show each separately.

Note 3 – Inventory

Green’s inventory consists of finished good products that are held for resale at all locations or that are used for the services provided by the two salons. Inventory is carried at the lower of cost or market. Market is determined based on the estimated net realizable value, which generally is the merchandise selling price plus a reasonable margin. Inventory levels are reviewed to identify slow-moving merchandise and damaged items. Mark downs are used to clear merchandise. As of December 31, 2016 and 2015, inventory amounted to $152,790 and $138,928, respectively.

29

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Note 4 – Property, Plant, and Equipment

The following is a summary of Green’s Property, plant, and equipment by major category as of December 31, 2016:

	Cost	Accumulated Depreciation	Net
Computer equipment and related software	$44,401	$36,333	$ 8,068
Construction in process	-	-	-
Leasehold improvements	732,690	530,039	202,651
Furniture and fixtures	27,201	25,650	1,551
Equipment	362,126	315,227	46,899
Vehicle	48,193	46,472	1,721
Signage	25,154	16,213	8,941
	$1,239,765	$969,934	$ 269,831

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

	Cost	Accumulated Depreciation	Net
Computer equipment and related software	$39,247	$29,401	$ 9,846
Construction in process	12,000	-	12,000
Leasehold improvements	639,253	476,652	162,601
Furniture and fixtures	27,201	24,661	2,540
Equipment	359,256	273,132	86,124
Vehicle	48,193	39,587	8,606
Signage	25,155	13,803	11,352
	$1,150,304	$857,236	$ 293,068

For the years ended December 31, 2016 and 2015, Green recorded depreciation expense of $112,698 and $129,909, respectively. Maintenance and repair costs are expensed as incurred.

Note 5 – Other Assets

The following table shows other assets as of December 31, 2016 and 2015:

	December 31,
	2016	2015
Lease and utility deposits	$        17,844	$          20,914
Other Intangible Assets	3,561	3,561
Total other assets	$        21,405	$          24,475

Note 6 – Fair Value Measurements

Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2016 and 2015, consisted of the following:

30

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

	Total fair	Quoted prices	Significant other	Significant
	value at	in active	observable	unobservable
	December 31,	markets	inputs	inputs
Description	2016	(Level)	(Level 2)	(Level)
Derivative liability (1)	$108,297	$              -	$108,297	$              -
	Total fair	Quoted prices	Significant other	Significant
	value at	in active	observable	unobservable
	December 31,	markets	inputs	inputs
Description	2015	(Level)	(Level 2)	(Level)
Derivative liability (2)	$209,610	$              -	$209,610	$              -

(1) The Company has estimated the fair value of these embedded derivatives for convertible debenture using a multinomial lattice model.  

(2) The Company has estimated the fair value of these embedded derivatives for convertible debenture using Black Scholes. 

Note 7 – Derivative Liability

The Company has three convertible notes that could be considered derivatives or contain embedded features subject to derivative accounting.  The notes convert into shares of the Company's common stock (the "Common Stock") using a calculation of lowest prices over a period of time and some at a discount.  The notes also contain a ratchet provision. Because the terms do not dictate a maximum numbers of convertible shares, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability Under ASC 815-40. The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures using a multinomial lattice model.  As of December 31, 2016, the fair market value of the derivatives aggregated $108,297, and we recorded a gain on mark to market of $51,314, using the following assumptions: estimated 0.75 to 1.50 -year term, estimated volatility of 347.03% to 636.47%, and a discount rate of 0.45% to 0.71%.  During 2016 two of the notes were converted.  The following table summarizes the derivative activity.

Derivative Liability 2016
Beginning balance	$209,610
Conversions	(152,627)
Gain/(loss) net	51,314
Ending balance	$108,297

Prior to December 31, 2016, the Black-Scholes model was used to determine the fair value of derivative liabilities   recognized in the financial statements.  The fair value of derivatives as of December 31, 2016 were estimated using a multinomial lattice model. The Company made this change because lattice models produce more accurate derivative values due to the ability to incorporate more instrument specific assumptions into the open-form binomial model.  In addition, lattice models allow for changes in critical assumptions over the life of the option in comparison to closed-form models like Black-Scholes, which require single-value assumptions at the time of grant. The change of a valuation model is considered a change in accounting estimates.

31

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Note 8 – Income Taxes

The Company is a subsidiary of Sack Lunch Productions, Inc. that files a consolidated income tax return. The Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.  The cumulative net operating loss and the cumulative tax effect at the expected composite rate of 39 percent of significant items comprising our net deferred tax amount is as follows:

The cumulative net operating loss and the cumulative tax effect at the expected composite rate of 39 percent of significant items comprising our net deferred tax amount is as follows:

	December 31,
	2016	2015
Cumulative net operating loss	(3,791,881)	(3,831,190)

	December 31,
	2016	2015
Deferred Tax assets:
Net operating loss carry forwards	(1,478,834)	(1,494,163)
Valuation allowance	1,478,834	1,494,163
	-	-

	December 31,
	2016	2015
Book (loss) from operations	(298,460)	(344,972)
Meals and Entertainment	4,725	3,290
Donations	10,451	3,237
Change in derivative liability	(51,314)	33,927
Stock options issued for services	-	54,718
Accrued expenses- officer	8,750	-
Change in valuation allowance	325,848	249,800
	-	-

Note 9 – Related Party Transactions

A summary of the related party note payable as of December 31, 2016 and 2015 is as follows:

32

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

		Interest	Maturity	December 31,
		Rate	Date	2016	2015
Note Payable to Richard Surber. President and CEO of SAKL	(1)	20.00%	11/6/2017	25,000	25,000
Note Payable to Sack Lunch Inc.	(2)	10.00%	4/15/2015	27,250	27,250
Note Payable to Richard Surber. President and CEO of SAKL	(3)	18.00%	3/12/2018	-	20,820
Note Payable to a Corporation	(4)	18.00%	5/6/2016	9,309	9,309
Total Related Party Notes				61,559	82,379
Less Current portion				61,559	67,990
Long Term Related Party Notes				$           -	$   14,389

(1) On November 6, 2012, Landis Salons II, Inc. entered into a promissory note with Richard Surber, President, CEO, and Director of Green, for the sum of $25,000 for funds loaned. The note bears interest at the rate of 20% per annum, with a term of five years and monthly payments of $662 and a demand feature by which the note can be called upon the demand of Mr. Surber. As security for the note, Landis Salons II pledged all of its assets, stock in trade, inventory, furniture, fixtures, supplies, any intangible property and all tangible personal property of Landis Salons II and all and any other assets to which Landis Salons II holds title or claims ownership or that is hereafter acquired by Landis Salons II, subject only to purchase money liens held by sellers or grantors. 

(2) On April 15, 2013, Green entered into a promissory note with its parent company, Sack Lunch Productions Inc., in the amount of $37,400 for cash advanced to Green. Interest on the note is 10% per annum, monthly payments are $1,726 and the note was due 24 months from signing. As of December 31, 2016, the note is in default. 

(3) On March 24, 2015, Landis Salons, Inc. entered into a promissory note with Richard Surber, President, CEO, and Director of Green, for the sum of $25,082 for funds loaned. The note bears interest at the rate of 18% per annum, with a term of five years and monthly payments of $806 and a demand feature by which the note can be called upon the demand of Mr. Surber. As security for the note, Landis Salons pledged all of its assets, stock in trade, inventory, furniture, fixtures, supplies, any intangible property and all tangible personal property of Landis Salons and all and any other assets to which Landis Salons holds title or claims ownership or that is hereafter acquired by Landis Salons, subject only to purchase money liens held by sellers or grantors. During 2016 the debt was settled by paying the remainder of the principle and interest of the note. 

(4) On May 6, 2015 Landis salons Inc. entered into a promissory note with Diversified Holdings X Inc. for the sum of $10,000. The interest rate on this loan is 18% per annum. There was to be a lump sum payment made 12 months after the origination date.  The note is still outstanding. As of December 31, 2016, the note is in default. 

On April 30, 2008, Green entered into a stock transfer agreement with its parent company Sack Lunch Productions Inc. and Sack Lunch’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 of 95% of the average closing bid price of the Common stock three days prior to the date notice is received by Green. On December 11, 2015, the Company amended the conversion terms of the note to include a floor to the conversion price.  The note holder can convert all or any amount over $10,000 of the principal face amount of the debenture into shares of Common stock, $0.0001 par value per share, at a conversion price for each share of Common stock at the greater of $0.0001 or equal to 95% of the average closing bid price of the common stock three days prior to the date we receive notice.  On September 30, 2016 the Company issued 230,621 shares of Series B and 3,843,686 shares of common stock in exchange for converting the note and accrued interest in the amount of $2,190,896.

	December 31,
	2016	2015
Convertible Debenture - Related Party
Principal amount	$                 -	$2,147,591
Debt discount	-	(29,218)
Convertible debenture, net of debt discount	$                 -	$2,118,373

33

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

As of December 31, 2016 and 2015, amounts payable to related parties are $632,802 and $424,804, respectively. The December 31, 2016 balance of $632,802 consists of $5,000 of accrued interest for the note payable to Richard Surber and $627,802 from various amounts owed to Sack Lunch's subsidiaries. The December 31, 2015 balance of $424,804 consists of $6,852 of accrued interest for the note payable to Richard Surber and $417,952 from various amounts owed to Sack Lunch's subsidiaries.

Effective October 16, 2015, Sack Lunch Productions, Inc. (Green’s parent corporation “SAKL”) closed a Credit Agreement (the “Credit Agreement”) with SAKL, as borrower, and the Company’s subsidiaries as joint and several guarantors and TCA Global Credit Master Fund, LP, (“TCA”).  Pursuant to the Credit Agreement, TCA loaned SAKL an initial amount of $1,800,000. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Convertible Promissory Note (the “Note”) and the repayment of the Note is secured by a first position security interest in substantially all of SAKL’s assets in favor of TCA, as evidenced by a Security Agreement by and between SAKL and TCA (the “Company Security Agreement”) and a first position security interest in substantially all of the Subsidiaries’ assets, including Green Endeavors, in favor of TCA. The Note is due and payable, along with interest thereon, fifteen months following the effective date of the Note, and bears interest at the rate of 12% per annum.  On November 23, 2016 TCA gave SAKL a Notice of Default that SAKL is in default for 3 months payments that were due in accordance with the terms and provisions of the Senior Secured Credit Facility Agreement effective between the parties as of October 31, 2015.  Failure to cure the default may lead to further collection efforts by TCA.  Discussions to resolve the default are ongoing.

As of December 31, 2016, Mr. Surber is a personal guarantor to various notes payable by the Company. Subsequent to December 31, 2016, 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 $600,000 from time to time.

Note 10 – Notes Payable

A summary of notes payable as of December 31, 2016 and 2015 is as follows:

		Interest	Maturity	December 31,
		Rate	Date	2016	2015
To an Individual	(1)	11.00%	2/27/2016	-	14,844
To a Corporation	(2)	5.00%	9/1/2017	-	18,935
To a Corporation	(3)	24.33%	10/25/2017	83,333	-
To a Bank	(4)	6.00%	3/1/2017	14,317	-
To a Bank	(5)	12.00%	11/19/2017	-	261,806
To a Bank	(6)	6.00%	12/11/2017	322,927	-
To a Partnership	(7)	8.00%	3/3/2019	6,206	8,532
To a Bank	(8)		6/17/2021	58,309	-
Total Notes Payable				485,092	304,117
Less Current portion				434,695	152,089
Long Term Notes Payable				$  50,397	$ 152,028

(1) On February 27, 2012, Green and Landis Experience Center, LLC issued an 11% note payable in the principal face amount of $50,000 to an individual in exchange for a cash payment of the same amount. The note provides for monthly payments in the amount of $1,292 of principal and interest.  As of December 31, 2016 the full balance of the note and accrued interest was paid off. 

(2) On August 20, 2012, the Board of Directors of LEC approved that LEC enter into a loan agreement with a Corporation in the amount of $50,000. Pursuant to the board approval, a note in the amount of $50,000 was issued on August 21, 2012. The note bears interest at 5% per annum and requires 60 monthly installments of $944 commencing October 1, 2012.  As of December 31, 2016 the full balance of the note and accrued interest was paid off.  

(3) On October 17, 2016 Landis Salons, Inc. issued a 24.33%, 12 month note in the amount of $100,000 to a corporation in exchange for cash of the same amount. The note provides for 6 monthly payments of $10,833 of principal and interest and then 6 monthly payments of $9,333 of principal and interest for the remainder of the note. 

34

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

(4) On March 1, 2016, the Company entered into a loan agreement with a bank in the amount of $62,000. The note provides for daily payments of $263. In addition to the merchant account receivables, collateral for the loan includes all receivables, financial instruments, equipment assets, inventories, intangibles, deposits, and other assets as applicable. The loan requires a prepaid interest charge that is 6% ($3,720) of the $62,000 loan amount. These financing costs are being amortized monthly to interest expense during the one year term of the loan. The total amount due at the inception date is $65,720.  

(5) On November 20, 2015, the Company entered into a loan agreement with a bank in the amount of $250,000. The note is a merchant account financing arrangement wherein Landis repays the loan at the rate of 31% of the American Express credit card sales receipts that are collected each month. In addition to the merchant account receivables, collateral for the loan includes all receivables, financial instruments, equipment assets, inventories, intangibles, deposits, and other assets as applicable. The loan requires a prepaid interest charge that is 12% ($30,000) of the $250,000 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 $280,000.  

(6) On November 5, 2016, the Company entered into a loan agreement with a bank in the amount of $346,000. The note is a merchant account financing arrangement wherein Landis repays the loan at the rate of 75% of the American Express credit card sales receipts that are collected each month. In addition to the merchant account receivables, collateral for the loan includes all receivables, financial instruments, equipment assets, inventories, intangibles, deposits, and other assets as applicable. The loan requires a prepaid interest charge that is 6% ($20,760) of the $346,000 loan amount. These financing costs are being amortized monthly to interest expense during the one year term of the loan. The total amount due at the inception date is $366,760. 

(7) On March 3, 2014, Landis Salons, Inc. entered into a loan agreement with a partnership in the amount of $12,021 for the financing of professional laundry equipment.  The note calls for 60 monthly payments of $244 commencing when the equipment is delivered for installment. In addition to corporate guarantees, Richard Surber, President, CEO, and Director of Landis is a personal guarantor and the note is secured by the equipment.  

(8) On August 17, 2016, Landis Salons, Inc. entered into a loan agreement with a bank in the principal amount of $69,495 with an interest rate of 24%. The loan agreement requires 60 monthly payments of principal and interest in the amount of $1,242. The maturity date is June 17, 2021. 

A summary of convertible notes payable as of December 31, 2016 and 2015 is as follows:

		Interest	Maturity	December 31,
		Rate	Date	2016	2015
To a Corporation	(9)	8.00%	8/17/2014	35,000	35,000
To a Corporation	(10)	8.00%	3/26/2016	-	14,983
To a Corporation	(11)	12.00%	7/30/2017	-	38,500
Less Debt Discount				-	(36,279)
Total Convertible Notes Payable				35,000	52,204
Less Current portion				35,000	44,094
Long Term Convertible Notes Payable				$         -	$     8,110

35

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

(9) On August 17, 2012, Green issued a $35,000 convertible promissory note to a corporation Green converted $15,000 of accounts payable to the corporation to the note and also received $20,000 in cash for the loan. The transaction has been handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. The note matures on August 17, 2014 and bear interest at a rate of 8% per annum. After one year from issuance, the note can be convertible into Green’s common shares at the conversion rate of 54% of the market price of the lowest price of Green’s common shares during the ten-day period ending one trading day prior to the date of the conversion. As of December 31, 2016, none of the note had been converted into shares of common stock.  

(10) On March 25, 2015, Green issued a $34,000 Convertible Promissory Note to LG Capital Funding, LLC (“LGCF Note”) that matured March 26, 2016. The LGCF Note bears interest at a rate of 8% per annum and can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 58% of the market price (a 42% discount) of an average of the three lowest trading price of Green’s common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. On March 29, 2016 Green settled the LGCF note for a payment of the remaining balance of principle and interest owed. 

(11) On July 30, 2015, Green issued a $38,500 Convertible Promissory Note to JMJ. The JMJ Note can be convertible into Green’s common shares, at the holder’s option, at the conversion rate of 60% of the market price (a 40% discount) of an average of the three lowest trading price of Green’s common shares during the eighteen-day period ending on the date of the conversion. Green analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. On March 24, 2016 Green settled the JMJ Note for a payment of the remaining balance of principle and interest owed. 

(12) A summary of capital leases payable as of December 31, 2016 and 2015 is as follows: 

		Interest	Maturity	Monthly	December 31,
		Rate	Date	Payment	2016	2015
Capitalized lease for equipment	(12)	16.96%	4/23/2016	1,535	-	5,929
Capitalized lease for equipment	(13)	17.75%	9/5/2016	485	-	4,110
Total Capital Leases Payable all Current				$    2,020	-	10,038

(13) On April 23, 2012, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $53,230 with a corporation. The lease agreement requires 48 monthly payments of principal and interest in the amount of $1,535. Interest is at the rate of 16.96% per year and the maturity date is April 23, 2016. During 2016 Green settled this lease by paying the scheduled payments of principle and interest and exercising the bargain purchase option. The Company applied the guidance of ASC 840 in its determination of the lease being a capital lease. In addition to the Company’s guarantee for the debt, Richard Surber is personal guarantor to the lease.  

36

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

(14) On July 26, 2012, Landis Salons II, Inc. entered into a capital lease financing agreement in the principal amount of $16,826 with a corporation. The lease agreement requires 48 monthly payments of principal and interest in the amount of $485. During 2016 Green settled this lease by paying the scheduled payments of principle and interest and exercising the bargain purchase option. . The Company applied the guidance of ASC 840 in its determination of the lease being a capital lease. In addition to the Company’s guarantee for the debt, Richard Surber is personal guarantor to the lease. 

37

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Note 11 – Lease Commitments

Operating Leases

We lease three facilities for our salons and experience center operations in Salt Lake City, UT. We believe that these facilities are sufficient for our current needs and that suitable additional or substitute space will be available as needed to accommodate any expansion of our operations. Facilities are leased under operating leases expiring at various dates through 2020. Certain of these leases contain renewal options. For the years ended December 31, 2016 and 2015, rent expense was $173,140 and $187,214, respectively.

As of December 31, 2016, future minimum lease payments under non-cancelable operating leases were as follows:

For the year  ended December 31,	Operating Leases
2017	$   220,292
2018	230,129
2019	206,732
2020	128,525
Total operating lease payments	$   785,678

Contingent Deferred Rents

The Landis Experience Center, (LEC), retail outlet has entered into various lease modification agreements with its landlord.  The landlord has agreed to monthly lease payment reductions through December 31, 2016 which total $94,500.  Under the terms of the modification agreements, these deferred payments will be cancelled if LEC fulfills its lease term commitment.

Note 12 – 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 December 31, 2016 and 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 Super voting 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 Super voting Preferred Stock

Each share of the Convertible Super voting 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 years ended December 31, 2016 and 2015, there were no issuances or conversions of Convertible Super voting Preferred shares.

As of December 31, 2016 and 2015, Green had 10,000,000 shares of Convertible Super voting Preferred stock issued and outstanding.

Convertible Series B Preferred Stock

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

2016

On August 29, 2016 the Company approved the conversion of 1,781 Series B shares into 44,062 shares of common stock.

38

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

On May 22, 2016 the Company approved the conversion of 7,000 Series B shares into 41,667 shares of common stock.

On September 30, 2016, the Company authorized the issuance of 3,843,686 shares of Common Stock and 230,621 Shares of Series B Preferred Stock to Sack Lunch Productions, Inc. in exchange for the satisfaction and settlement of $2,190,895.52 in debenture principle and accrued interest owed to Sack Lunch by the Company that will be removed from the Company’s liabilities. The shares will be issued with a restrictive legend to Sack Lunch.  The share values were discounted to 95%, which was greater than the $.0001 floor, based upon the amended conversion provisions of the Debenture, dated December 21, 2015.

2015

On January 15, 2015 the Board of Directors approved the return and cancellation of 14,205 shares of Series B shares in conjunction with an issuance of common stock for the cancellation of debt. (See Common Stock below)

On January 23, 2015, the Board of Directors approved the conversion of 3,900 shares of Series B held by an investor into 2,462 shares of Common Stock. The shares were converted at $7.92 per share based on the conversion provisions for the Series B Preferred Stock designation.

On July 8, 2015, the Board of Directors approved the conversions of 5,076 shares of Series B into 6,750 shares of Common Stock. The shares were converted at prices per share of approximately $3.76 based on the conversion provisions for the Convertible Series B Preferred Stock designation.

On November 16, 2015 The Board of Directors approved the payment of $2,500 to an investor for the return of 2,700 shares of Series B.

Common Stock

Green is authorized to issue 2,000,000,000 shares of common stock (par value $0.0001 per share).  On July 20, 2016 the Company effected a 2000:1 reverse split.  Share amounts have been retroactively restated where applicable.

2016

On January 12, 2016, LG Capital Funding LLC, subject to the terms of the convertible note, converted $1,711 of convertible debt, principle and interest, into 14,746 shares of the Company’s common stock.   

On February 11, 2016, LG Capital Funding LLC, subject to the terms of the convertible note, converted $1,712.22 of convertible debt, principle and interest, into 14,761 shares of the Company’s common stock.

On February 19, 2016, LG Capital Funding LLC, subject to the terms of the convertible note, converted $2,036.59 of convertible debt, principle and interest, into 17,557 shares of the Company’s common stock.

On February 19, 2016, JMJ Financial, subject to the terms of the convertible note, converted $1,775 of convertible debt into 17,750 shares of the Company’s common stock.

On February 25, 2016, JMJ Financial, subject to the terms of the convertible note, converted $1,995 of convertible debt into 19,550 shares of the Company’s common stock.

On February 29, 2016, JMJ Financial, subject to the terms of the convertible note, converted $2,053 of convertible debt into 20,525 shares of the Company’s common stock.

On March 8, 2016, JMJ Financial, subject to the terms of the convertible note, converted $2,155 of convertible debt into 21,550 shares of the Company’s common stock.

On March 15, 2016, JMJ Financial, subject to the terms of the convertible note, converted $2,262.50 of convertible debt into 22,625 shares of the Company’s common stock.

On March 18, 2016, JMJ Financial, subject to the terms of the convertible note, converted $2,375 of convertible debt into 23,750 shares of the Company’s common stock.

39

Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

On April 26, 2016, the Board of Directors approved a settlement on a $38,500 subscription receivable for payments of $5,020 as satisfaction in full.

On May 22, 2016, 7,000 shares of Series B Preferred stock were converted into 41,667 shares of common stock.

On September 30, 2016, the Company authorized the issuance of 3,843,686 shares of Common Stock and 230,621 Shares of Series B Preferred Stock to Sack Lunch Productions, Inc. in exchange for the satisfaction and settlement of $2,190,895.52 in debenture principle and accrued interest owed to Sack Lunch by the Company that will be removed from the Company’s liabilities. The shares have been issued with a restrictive legend to Sack Lunch.  The share values were discounted to 95%, which was greater than the $.0001 floor, based upon the conversion provisions of the Debenture, dated December 28, 2011 in the original amount of $2,359,800 and as amended on December 11, 2015.

On October 24, 2016 the Company entered into a marketing agreement to receive six months services for 350,000 shares of the Company’s common stock.

2015

On January 23, 2015, the Board of Directors approved the conversion of 3,900 shares of Series B held by an investor into 2,462 shares of Common Stock. The shares were converted at $7.92 per share based on the conversion provisions for the Series B Preferred Stock designation.

On July 8, 2015, the Board of Directors approved the conversions of 5,076 shares of Series B into 6,750 shares of Common Stock. The shares were converted at prices per share of approximately $3.76 based on the conversion provisions for the Convertible Series B Preferred Stock designation.

On December 23, 2015 the Board of Directors approved a partial settlement where $44,635.69 of interest and $66,000 of principle of the debenture held by Sack Lunch Productions Inc. was settled and paid through the issuance of 291,147 restricted shares of the Company’s common stock.

During the year ended December 31, 2015 the Board of Directors approved grants totaling 36,750 shares of common stock pursuant to the S-8 Registration Statement and 2015 Benefit Plan of Green Endeavors, Inc. to certain employees and consultants to the Company.  

During the year ended December 31, 2015, subject to the terms of certain Convertible Promissory Notes, $66,102 of convertible debt principle was converted into 178,244 share of common stock. (See detailed description of these transactions under Note 7, Derivative Liability, in the footnotes to the financial statements.)

As of December 31, 2016 and 2015, Green had 5,127,408 and 618,174 shares of common stock issued and outstanding, respectively.

Note 13 – Stock-Based Compensation

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 40,000 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 $9.00 to $12.00 per share for an aggregate of 18,000 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.  The promissory notes mature in 12 months from their issuance date and the Company is entitled to 4% interest per annum.

On July 9, 2015, the Board of Directors approved an amendment to the 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 50,000 additional shares of the Company’s common stock (par value $0.0001) are authorized to be issued or granted to employees under the Amendment to the 2015 Plan.

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Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

On July 9, 2015 the Board of Directors approved a grant of 6,750 shares pursuant to the S-8 Registration Statement and 2015 Benefit Plan of Green Endeavors Inc. The shares were issued based on an option price of $3.00 per share. The employee exercised the options on the same day they were granted by issuing a promissory note to the Company that will appear on the balance sheet as a subscription receivable. The promissory note matures 12 months from its issuance date and the Company is entitled to 4% interest per annum.  On March 7, 2017 the Company entered into a note extension agreement with the holder of a promissory note related to a stock subscription.  The due date was extended to June 30, 2017 and any interest owing was waived.

Note 14 – Options and Warrants

For the periods ended December 31, 2016 and 2015 Green did not have any options or warrants outstanding.

Note 15 – Litigation

From time to time, we are involved in various disputes and litigation that arise in the ordinary course of business. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, we accrue a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims and litigation matters and may revise estimates.

Effective October 16, 2015, Sack Lunch Productions, Inc. (Green’s parent corporation “SAKL”) closed a Credit Agreement (the “Credit Agreement”) with SAKL, as borrower, and the Company’s subsidiaries as joint and several guarantors and TCA Global Credit Master Fund, LP, (“TCA”).  Pursuant to the Credit Agreement, TCA loaned SAKL an initial amount of $1,800,000. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Convertible Promissory Note (the “Note”) and the repayment of the Note is secured by a first position security interest in substantially all of SAKL’s assets in favor of TCA, as evidenced by a Security Agreement by and between SAKL and TCA (the “Company Security Agreement”) and a first position security interest in substantially all of the Subsidiaries’ assets, including Green Endeavors, in favor of TCA. The Note is due and payable, along with interest thereon, fifteen months following the effective date of the Note, and bears interest at the rate of 12% per annum.  On November 23, 2016 TCA gave SAKL a Notice of Default that SAKL is in default for 3 months payments that were due in accordance with the terms and provisions of the Senior Secured Credit Facility Agreement effective between the parties as of October 31, 2015.  Failure to cure the default may lead to further collection efforts by TCA.  Discussions to resolve the default are ongoing.

While the outcome of disputes and litigation matters cannot be predicted with any certainty, management does not believe that the outcome of any current matters will have a material adverse effect on our consolidated financial position, liquidity or results of operations.

At the current time there are no additional material pending legal proceedings to which Green or its subsidiaries are parties.

Note 16 – 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 years ended December 31, 2016 and 2015 accounted for approximately 99% 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 17 – Going Concern

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, which contemplate the continuation of Green as a going concern. However, as of and for the year ended December 31, 2016, Green had negative working capital of $907,871 and an accumulated deficit of $4,385,323, which raises substantial doubt about Green’s ability to continue as a going concern. Green’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to successfully fulfill its business plan. Management plans to attempt to raise additional funds to finance the operating and capital requirements of Green through a combination of equity and debt financings. While Green is making its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be sufficient for operations.

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Green Endeavors, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

Note 18 – Subsequent Events

On January 24, 2017 the Board of Directors approved Employment Agreements with Richard Surber and Logan C. Fast, the term of employment to start January 1, 2017 and ending on December 31, 2021.  Mr. Surber is to serve as the President of Green and his compensation will be $150,000 per year and Mr. Fast is to serve as the Vice President of Green and his compensation will be $60,000 per year.

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Item 6. Exhibits

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

		Incorporated by Reference
Exhibit Number	Description	Form	File Number	Exhibit Number	Filing Date	Provided Herewith
3(i)	Amended and Restated Certificate of Incorporation	10-12G/A	000-54018	3(i)	8/23/2010
3(ii)	Bylaws	10-12G/A	000-54018	3(ii)	8/23/2010
3(iii)	Plan of Merger	8-K	000-54018	3(iii)	8/26/2010
3(iv)	Plan of Merger and Share Exchange	8-K	000-54018	3(iv)	8/31/2010
3(v)	Utah Articles of Incorporation	8-K	000-54018	3(v)	8/31/2010
4(i)	Certificate of Designation for Series B Preferred Stock.	10-12G/A	000-54018	4(i)	8/23/2010
4(ii)	8% Series A Senior Subordinated Convertible Redeemable Debenture issued to DHI dated April 30, 2008.	10-12G/A	000-54018	4(ii)	8/23/2010
4(iii)	Amended Certificate of Designation for Series B Preferred Stock.	10-12G/A	000-54018	4(viii)	9/22/2010
4(iv)	Entry into a Material Definitive Contract.	8-K	000-54018	4(iv)	10/21/2015

10(i)	Securities to be offered to employee benefit plans pursuant to The 2015 Benefit Plan of the Company, January 21, 2015.	S-8	1/26/2015
Subsequent Events for 2016-Material Contracts
10(i)	Employment Agreement with Richard Surber, January 1, 2017			X
10(ii)	Employment Agreement with Logan C. Fast, January 1, 2017			X
31.010	Certification of the Registrant’s Chief Executive Officer, Richard D. Surber, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.			X
31.020	Certification of the Registrant’s Chief Financial Officer, Richard D. Surber, pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.			X
32.010	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
32.020	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:March 31, 2017By: /s/ Richard D. Surber   

Richard D. Surber

President, Chief Executive Officer and Director

DATE:March 31, 2017              By: /s/ Richard D. Surber   

Richard D. Surber

Chief Financial Officer

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