UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the year ended December 31, 2012
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________ to_________.
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Commission file number 000-54018
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GREEN ENDEAVORS, INC.
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(Exact name of registrant as specified in its charter)
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Utah
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27-3270121
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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59 West 100 South, 2nd Floor, Salt Lake City, Utah 84101
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(Address of Principal Executive Offices) (Zip Code)
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(801) 575-8073
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(Registrant's Telephone Number, including Area Code)
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None
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Securities registered pursuant to Section 12(b) of the Act:
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None
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Securities registered pursuant to Section 12(g) of the Act:
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Title of Each Class
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Names of Each Exchange on which Registered
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$0.0001 Common Stock
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None
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No X
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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 No X
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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 No X
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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 No X
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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):
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Large accelerated filer Yes No X Accelerated filer Yes No X
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No X
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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, 2012 was $117,479.
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On July 29, 2013, approximately 30,562,947 shares of the Registrant’s Common Stock, $0.0001 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
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None
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PART I
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PAGE
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Item 1.
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Business
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3
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Item 1. A
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Risk Factors
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4
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Item 1. B
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Unresolved Staff Comments
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7
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Item 2.
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Properties
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7
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Item 3.
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Legal Proceedings
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7
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Item 4.
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Submission of Matters to a Vote of Security Holders
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8
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PART II
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||
Item 5.
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Market for Registrant's Common Equity and Related Stockholder Matters
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8
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Item 6.
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Selected Financial Data
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11
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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12
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Item 8.
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Financial Statements and Supplementary Data
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17
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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17
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Item 9. A.
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Controls and Procedures
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17
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Item 9. B
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Other Information
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18
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PART III
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||
Item 10.
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Directors, Executive Officers, and Corporate Governance
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18
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Item 11.
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Executive Compensation
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19
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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19
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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21
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Item 14.
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Principal Accountant Fees and Services
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22
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PART IV
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||
Item 15.
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Exhibits and Financial Statement Schedules
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25
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Signatures |
·
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Hair care - hair color and styling products, shampoos, conditioners and finishing sprays.
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·
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Makeup - lipsticks, lip glosses, mascaras, foundations, eye shadows, nail polishes-remove nail polishes and powders.
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·
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Skincare - moisturizers, creams, lotions, cleansers and sunscreens.
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·
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Fragrance - oils, candles, and a variety of fragrance products used on hair, the body, and in the home.
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·
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Significant dilution
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·
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Our services or our competitors
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·
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Additions or departures of key personnel
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·
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Our ability to execute our business plan
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·
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Operating results that fall below expectations
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·
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Loss of any strategic relationship
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·
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Economic and other external factors
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·
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Period-to-period fluctuations in our financial results
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High
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Low
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|||||||
2011
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||||||||
First Quarter
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$ | 1.300 | $ | 0.640 | ||||
Second Quarter
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$ | 2.000 | $ | 0.420 | ||||
Third Quarter
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$ | 0.006 | $ | 0.001 | ||||
Fourth Quarter
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$ | 1.240 | $ | 0.020 | ||||
2012
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||||||||
First Quarter
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$ | 0.240 | $ | 0.020 | ||||
Second Quarter
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$ | 0.140 | $ | 0.020 | ||||
Third Quarter
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$ | 0.080 | $ | 0.020 | ||||
Fourth Quarter
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$ | 0.040 | $ | 0.020 | ||||
2013
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||||||||
First Quarter
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$ | 0.020 | $ | 0.020 | ||||
Second Quarter
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$ | 0.065 | $ | 0.005 |
Years Ended
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Increase (Decrease)
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|||||||||||||||
December 31,
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December 31,
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Over Prior Fiscal Year
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||||||||||||||
Salon
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2012
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2011
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Dollar
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Percentage
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||||||||||||
Liberty Heights
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$ | 1,661,385 | $ | 1,572,863 | $ | 88,522 | 6 | % | ||||||||
Marmalade
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667,165 | 557,321 | 109,844 | 20 | % | |||||||||||
City Creek
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580 | - | 580 | n/a | ||||||||||||
Total Service Revenue
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$ | 2,329,130 | $ | 2,130,184 | $ | 198,946 | 9 | % |
Years Ended
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Increase (Decrease)
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|||||||||||||||
December 31,
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December 31,
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Over Prior Fiscal Year
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||||||||||||||
Salon
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2012
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2011
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Dollar
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Percentage
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||||||||||||
Liberty Heights
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$ | 531,655 | $ | 495,352 | $ | 36,303 | 7 | % | ||||||||
Marmalade
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206,026 | 188,490 | 17,536 | 9 | % | |||||||||||
City Creek
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81,705 | - | 81,705 | n/a | ||||||||||||
Total Product Revenue
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$ | 819,386 | $ | 683,842 | $ | 135,544 | 20 | % |
Years Ended
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||||||||
December 31,
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December 31,
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|||||||
Revenue Type
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2012
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2011
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Services
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59.1 | % | 55.7 | % | ||||
Product
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57.0 | % | 62.6 | % |
Years Ended
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||||||||||||
December 31,
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December 31,
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|||||||||||
2012
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2011
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Change
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Salaries and wages
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$ | 494,214 | $ | 346,730 | $ | 147,484 | ||||||
Rent
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232,247 | 154,615 | 77,632 | |||||||||
Advertising
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93,459 | 96,409 | (2,950 | ) | ||||||||
Credit card merchant fees
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47,416 | 39,170 | 8,246 | |||||||||
Insurance
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54,361 | 44,576 | 9,785 | |||||||||
Utilities and telephone
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49,072 | 43,676 | 5,396 | |||||||||
Professional services
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235,275 | 186,571 | 48,704 | |||||||||
Repairs and maintenance
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23,204 | 18,508 | 4,696 | |||||||||
Dues and subscriptions
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24,706 | 19,226 | 5,480 | |||||||||
Office expense
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46,135 | 58,121 | (11,986 | ) | ||||||||
Travel
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26,359 | 16,474 | 9,885 | |||||||||
Investor relations and company promotion
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63,042 | 5,767 | 57,275 | |||||||||
Other
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25,734 | 20,713 | 5,021 | |||||||||
Total General and administrative expenses
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$ | 1,415,224 | $ | 1,050,556 | $ | 364,668 |
Years Ended
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||||||||||||
December 31,
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December 31,
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|||||||||||
Other Income (Expenses), net
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2012
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2011
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Change
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Interest income
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$ | 812 | $ | 834 | $ | (22 | ) | |||||
Interest expense
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(238,091 | ) | (214,995 | ) | (23,096 | ) | ||||||
Interest expense, related parties
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(206,590 | ) | (207,743 | ) | 1,153 | |||||||
Gain (loss) on derivative fair value adjustment
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(94,850 | ) | 89,108 | (183,958 | ) | |||||||
Other income (expense)
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(42,171 | ) | 1,560 | (43,731 | ) | |||||||
Total Other income (expenses), net
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$ | (580,890 | ) | $ | (331,236 | ) | $ | (249,654 | ) |
Name
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Age
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Positions and Offices
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Richard D. Surber
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40
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President, CEO and Director
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Logan C. Fast
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26
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Vice President and Director
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Scott C. Coffman
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51
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CFO and Director
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Stock
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|||||||||||||||||
Name and Principal Position
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Year
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Salary ($)
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Bonus ($)
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Awards ($)
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Total ($)
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Richard D. Surber - President, CEO, CFO, and Director (1)(3)
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2012
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$ | 77,000 | $ | - | $ | - | $ | 77,000 | ||||||||
2011
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$ | 40,419 | $ | - | $ | - | $ | 40,419 | |||||||||
Richard G. Clegg - former CFO and former Director (1)(3)
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2012
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$ | - | $ | - | $ | - | $ | - | ||||||||
2011
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$ | 11,512 | $ | - | $ | - | $ | 11,512 | |||||||||
Logan C. Fast - Vice President, Director (1)(2)(3)
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2012
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$ | 66,972 | $ | - | $ | - | $ | 66,972 | ||||||||
2011
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$ | 57,301 | $ | - | $ | - | $ | 57,301 | |||||||||
Scott C. Coffman - CFO and Director (4)
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2012
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$ | - | $ | - | $ | - | $ | - | ||||||||
2011
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$ | - | $ | - | $ | - | $ | - |
Title of Class
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Name and Address of Beneficial Owner
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Amount and Nature of Beneficial Ownership
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Percent of Class
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Super voting Preferred ($0.001 par value)
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Nexia Holdings, Inc. (1)
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59 West 100 South, 2nd Floor
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10,000,000
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100%
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Salt Lake City, Utah 84101
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Preferred Series "B" Stock
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Richard D. Surber
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($0.001 par value)(2)
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59 West 100 South, 2nd Floor
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37,134
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6.32%
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Salt Lake City, Utah 84101
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Voting Common Stock
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Richard D. Surber
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($0.0001 par value)(2)
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59 West 100 South, 2nd Floor
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64,864
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>1%
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Salt Lake City, Utah 84101
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Preferred Series "B" Stock
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Logan C. Fast
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($0.001 par value)(2)
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59 West 100 South, 2nd Floor
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2,000
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0.34%
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Salt Lake City, Utah 84101
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Preferred Series "B" Stock
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Scott C. Coffman
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($0.001 par value)(2)
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59 West 100 South, 2nd Floor
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16,000
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2.72%
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Salt Lake City, Utah 84101
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Voting Common Stock
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Nexia Holdings, Inc. (1)
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($0.0001 par value)(2)
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59 West 100 South, 2nd Floor
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11,776,316
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39.78%
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Salt Lake City, Utah 84101
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Voting Common Stock
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Robert E. Stockdale
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($0.0001 par value)(2)
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2537 Irving Place
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3,700,476
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12.50%
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Billings, MT 59102
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Preferred Series "B" Stock
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Directors and Executive Officers
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||
($0.001par value)
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as a Group (including beneficial
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55,134
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9.38%
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ownership) (1)
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|||
Voting Common Stock
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Directors and Executive Officers
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($0.0001 par value)(2)
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as a Group (including beneficial
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11,841,179
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40.02%
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ownership) (1)
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|||
Super voting Preferred ($0.001 par value)
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Directors and Executive Officers
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as a Group (including beneficial
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10,000,000
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100%
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ownership) (1)
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(a)
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1. Financial Statements
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Page
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Report of Independent Registered Public Accounting Firm
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25
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Consolidated Balance Sheets as of December 31, 2012 and 2011
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27
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Consolidated Statements of Operations for the years ended December 31, 2012 and 2011
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28
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Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2012 and 2011
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29
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Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011
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30
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Notes to Consolidated Financial Statements
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31
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(a)
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2. Financial Statement Schedules
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(a)
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3. Exhibits |
50
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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To the Board of Directors
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Green Endeavors, Inc. and subsidiaries
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We have audited the accompanying consolidated balance sheet of Green Endeavors, Inc. and subsidiaries as of December 31, 2012 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the year then ended. These consolidated 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 audit.
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We conducted our audit 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 audit provides a reasonable basis for our opinion.
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In our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Green Endeavors, Inc. and subsidiaries as of December 31, 2012 and the results of their operations and cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.
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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 accumulated net losses of $3,174,419 and will need additional working capital for its planned activity and to service its debt. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 17. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
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/s/ Sadler, Gibb, & Associates, LLC
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Sadler, Gibb, & Associates, LLC
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Salt Lake City, UT
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July 29, 2013
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Consolidated Statements of Operations
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||||||||
Years Ended December 31,
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||||||||
2012
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2011
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|||||||
Revenue:
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||||||||
Services, net of discounts
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$ | 2,329,130 | $ | 2,130,184 | ||||
Product, net of discounts
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819,386 | 683,842 | ||||||
Total revenue
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3,148,516 | 2,814,026 | ||||||
Costs and expenses:
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||||||||
Cost of services
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1,375,413 | 1,186,726 | ||||||
Cost of product
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467,421 | 427,789 | ||||||
Depreciation
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123,902 | 93,983 | ||||||
General and administrative
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1,415,224 | 1,050,556 | ||||||
Total costs and expenses
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3,381,960 | 2,759,054 | ||||||
Income (loss) from operations
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(233,444 | ) | 54,972 | |||||
Other income (expenses):
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||||||||
Interest income
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812 | 834 | ||||||
Interest expense
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(238,091 | ) | (214,995 | ) | ||||
Interest expense, related parties
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(206,590 | ) | (207,743 | ) | ||||
(94,850 | ) | 89,108 | ||||||
Other income (expense)
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(42,171 | ) | 1,560 | |||||
Total other expenses
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(580,890 | ) | (331,236 | ) | ||||
Net loss
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$ | (814,334 | ) | $ | (276,264 | ) | ||
Net loss per common share – basic and diluted
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$ | (0.06 | ) | $ | (0.12 | ) | ||
Weighted average common shares outstanding – basic and diluted
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14,024,096 | 2,299,343 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
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Consolidated Statements of Stockholders' Deficit
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||||||||||||||||||||||||||||||||||||
Additional
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Retained
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Total
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||||||||||||||||||||||||||||||||||
Super Voting Preferred Stock
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Series B Preferred Stock
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Common Stock
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Paid-
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Earnings
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Stockholders’
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|||||||||||||||||||||||||||||||
Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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in Capital
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(Deficit)
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Deficit
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||||||||||||||||||||||||||||
Balance as of December 31, 2010
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5,850,000 | $ | 5,850 | 610,332 | $ | 610 | 2,150,747 | $ | 215 | $ | (1,264,571 | ) | $ | (2,083,821 | ) | $ | (3,341,717 | ) | ||||||||||||||||||
Write-off of related party receivables
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(1,588 | ) | (1,588 | ) | ||||||||||||||||||||||||||||||||
Conversion of series B preferred shares
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(20,266 | ) | (20 | ) | 222,072 | 222 | (202 | ) | ||||||||||||||||||||||||||||
Common stock options granted for services
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25,364 | 25,364 | ||||||||||||||||||||||||||||||||||
Exercise of common stock options granted
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300,000 | 30 | (30 | ) | ||||||||||||||||||||||||||||||||
Conversion of convertible note payable to common shares
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181,614 | 18 | 12,604 | 12,622 | ||||||||||||||||||||||||||||||||
Series B preferred shares sold for cash at $1.50 per share
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40,666 | 41 | 64,959 | 65,000 | ||||||||||||||||||||||||||||||||
Adjustment of additional paid-in capital due to restatement
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(2,086 | ) | (2,086 | ) | ||||||||||||||||||||||||||||||||
Net loss for year ended December 31, 2011
|
(276,264 | ) | (276,264 | ) | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2011
|
5,850,000 | 5,850 | 630,732 | 631 | 2,854,434 | 285 | (1,165,350 | ) | (2,360,085 | ) | (3,518,669 | ) | ||||||||||||||||||||||||
Super voting preferred stock issued for settlement of accrued interest on related party convertible debentures
|
4,150,000 | 4,150 | 140,408 | 144,558 | ||||||||||||||||||||||||||||||||
Common stock issued for settlement of accrued interest on related party convertible debentures
|
10,526,316 | 1,053 | 398,947 | 400,000 | ||||||||||||||||||||||||||||||||
Conversion of series B preferred shares
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(33,254 | ) | (33 | ) | 4,472,984 | 447 | (414 | ) | - | |||||||||||||||||||||||||||
Beneficial conversion feature of convertible note payable
|
32,143 | 32,143 | ||||||||||||||||||||||||||||||||||
Series B preferred shares returned and cancelled from collateral pursuant to Landis II facility lease agreement
|
(50,000 | ) | (50 | ) | (249,950 | ) | (250,000 | ) | ||||||||||||||||||||||||||||
Common stock options granted for services
|
103,650 | 103,650 | ||||||||||||||||||||||||||||||||||
Exercise of common stock options granted
|
730,000 | 73 | (73 | ) | - | |||||||||||||||||||||||||||||||
Conversion of convertible note payable to common shares
|
3,681,463 | 368 | 199,909 | 200,277 | ||||||||||||||||||||||||||||||||
Net loss for year ended December 31, 2012
|
(814,334 | ) | (814,334 | ) | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2012
|
10,000,000 | $ | 10,000 | 547,478 | $ | 548 | 22,265,197 | $ | 2,226 | $ | (540,730 | ) | $ | (3,174,419 | ) | $ | (3,702,375 | ) | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
Consolidated Statements of Cash Flows
|
||||||||
Years Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
$ | (814,334 | ) | $ | (276,264 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
123,902 | 93,983 | ||||||
Debt discount amortization
|
128,357 | 125,003 | ||||||
Interest expense on value of derivatives
|
50,127 | 50,308 | ||||||
Stock-based compensation
|
71,775 | 25,364 | ||||||
Loss contingency
|
46,500 | - | ||||||
Non-cash professional fees from issuance of convertible note
|
75,000 | - | ||||||
Write-down of related party receivables
|
- | (1,588 | ) | |||||
Gain on derivative liability fair value adjustment
|
94,850 | (89,108 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,465 | ) | 799 | |||||
Inventory
|
(19,180 | ) | (2,105 | ) | ||||
Prepaid expenses
|
(2,675 | ) | (2,927 | ) | ||||
Other assets
|
(6,791 | ) | 5,983 | |||||
Accounts payable and accrued expenses
|
228,068 | 93,579 | ||||||
166,603 | (47,408 | ) | ||||||
Deferred rent
|
37,035 | - | ||||||
Deferred revenue
|
1,286 | 9,298 | ||||||
- | (525 | ) | ||||||
Net cash provided by (used in) operating activities
|
178,058 | (15,608 | ) | |||||
Cash Flows from Investing Activities:
|
||||||||
Purchases of property, plant, and equipment
|
(198,100 | ) | (20,871 | ) | ||||
Net cash used in investing activities
|
(198,100 | ) | (20,871 | ) | ||||
Cash Flows from Financing Activities:
|
||||||||
Payments made on notes payable
|
(60,551 | ) | (27,547 | ) | ||||
Payments made on related party notes payable
|
(157,693 | ) | (125,584 | ) | ||||
Payments made on capital lease obligations
|
(7,554 | ) | - | |||||
Proceeds from issuance of notes payable
|
122,958 | - | ||||||
Proceeds from issuance of related party notes payable
|
25,000 | - | ||||||
Proceeds from issuance of convertible notes payable
|
62,500 | 155,000 | ||||||
Proceeds from exercising of stock options
|
23,985 | - | ||||||
Proceeds from issuance of preferred stock
|
- | 65,000 | ||||||
Net cash provided by financing activities
|
8,645 | 66,869 | ||||||
Increase (decrease) in cash
|
(11,397 | ) | 30,390 | |||||
Cash at beginning of period
|
97,983 | 67,593 | ||||||
Cash at end of period
|
$ | 86,586 | $ | 97,983 | ||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 23,324 | $ | 5,955 | ||||
Non-cash investing and financing activities:
|
||||||||
Reduction of convertible debt due to conversions
|
$ | 200,277 | $ | - | ||||
Equipment purchased under capital leases
|
$ | 70,056 | $ | - | ||||
Debt discount on derivative liability, convertible notes
|
$ | 77,500 | $ | 205,308 | ||||
Related party exchange of receivable and payable
|
$ | 105,000 | $ | - | ||||
Conversion of Series B preferred stock to common stock
|
$ | 448 | $ | 64,959 | ||||
Issuance of Series B preferred stock
|
$ | - | $ | 44,394 | ||||
Debt discount on convertible note
|
$ | 32,143 | $ | - | ||||
Cancelation of Series B preferred stock used as collateral
|
$ | 250,000 | $ | - | ||||
Cashless exercise of common stock options
|
$ | 7,898 | $ | 25,364 | ||||
Account payable conversion to note payable
|
$ | 15,000 | $ | - | ||||
Conversion of convertible note payable to common shares
|
$ | - | $ | 14,500 | ||||
Conversion of related party debt to supervoting preferred stock
|
$ | 144,558 | $ | - | ||||
Conversion of related party debt to common stock
|
$ | 400,000 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial Statements.
|
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
|
Cost
|
Accumulated Depreciation
|
Net
|
||||||||||
Computer equipment and related software
|
$ | 21,093 | $ | 14,131 | $ | 6,962 | ||||||
Leasehold improvements
|
624,154 | 262,146 | 362,008 | |||||||||
Furniture and fixtures
|
25,347 | 21,028 | 4,319 | |||||||||
Leased equipment
|
70,256 | 8,475 | 61,781 | |||||||||
Equipment
|
211,905 | 134,565 | 77,340 | |||||||||
Vehicle
|
48,193 | 18,933 | 29,260 | |||||||||
Signage
|
25,154 | 5,549 | 19,605 | |||||||||
Total
|
$ | 1,026,102 | $ | 464,827 | $ | 561,275 |
Cost
|
Accumulated Depreciation
|
Net
|
||||||||||
Computer equipment and related software
|
$ | 13,723 | $ | 9,736 | $ | 3,987 | ||||||
Leasehold improvements
|
443,579 | 204,377 | 239,202 | |||||||||
Furniture and fixtures
|
21,504 | 11,652 | 9,852 | |||||||||
Leased equipment
|
- | - | - | |||||||||
Equipment
|
205,593 | 107,431 | 98,162 | |||||||||
Vehicle
|
48,193 | 4,590 | 43,603 | |||||||||
Signage
|
25,154 | 3,139 | 22,015 | |||||||||
Total
|
$ | 757,746 | $ | 340,925 | $ | 416,821 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Green Series B Preferred shares pledged as collateral for the Landis II facility lease (1)
|
$ | - | $ | 250,000 | ||||
Note receivable pledged as collateral for the Landis II facility lease (2)
|
- | 105,000 | ||||||
Lease and utility deposits
|
30,470 | 21,403 | ||||||
Certificate of deposit, restricted cash (3)
|
27,015 | 26,226 | ||||||
Other
|
- | 3,272 | ||||||
Total other assets
|
$ | 57,485 | $ | 405,901 |
(1)
|
On July 9, 2010, the Board of Directors approved the issuance of 50,000 shares of restricted Series B Preferred shares to Landis Salons II, Inc., a subsidiary of Green, to be used as collateral for a lease entered into by Landis Salons II to serve as the location for a new Landis Lifestyle Salon. These shares were then assigned to the landlord of Landis II as a security deposit with a related value of $250,000. On September 28, 2012, the landlord returned the shares back to Landis II and terminated the requirements of the Stock Pledge Agreement. As of December 31, 2012, the shares have been cancelled and are no longer considered issued and outstanding.
|
(2)
|
On July 12, 2010, Landis Salons II, Inc. issued a promissory note in the principal amount of $105,000 payable to Wasatch Capital Corporation, a subsidiary of Nexia. Principal and interest, accruing at the rate of 5% per year, will be due on or before November 10, 2018. The note was issued to Wasatch in consideration of Wasatch assigning its interest in a trust deed note in the amount of $105,000 and has been recorded as a note receivable. Landis II then pledged as collateral the trust deed note as a material inducement for Landis II to be able to enter into a lease agreement for the opening of a salon in Salt Lake City. On September 28, 2012, the landlord terminated and canceled the Note Pledge Agreement and released its interest in the trust deed note back to Landis II. As of December 31, 2012 and 2011, there was $11,661 and $7,724 of accrued interest on the promissory note, respectively.
|
(3)
|
The certificate of deposit ("CD") is considered long-term, restricted cash because it is collateral for the June 18, 2010, $100,000 note payable to the Division of Economic Development of Salt Lake City Corporation (see item 4 of Note 10 below). The initial value of the CD was $25,000. As of December 31, 2012 and 2011, the CD has $2,015 and $1,226 of accrued interest, respectively.
|
Total fair
|
Quoted prices
|
Significant other
|
Significant
|
|||||||||||||
value at
|
in active
|
observable
|
unobservable
|
|||||||||||||
December 31,
|
markets
|
inputs
|
inputs
|
|||||||||||||
Description
|
2012
|
(Level)
|
(Level 2)
|
(Level)
|
||||||||||||
Derivative liability (1)
|
$ | 231,609 | $ | - | $ | 231,609 | $ | - |
Total fair
|
Quoted prices
|
Significant other
|
Significant
|
|||||||||||||
value at
|
in active
|
observable
|
unobservable
|
|||||||||||||
December 31,
|
markets
|
inputs
|
inputs
|
|||||||||||||
Description
|
2011
|
(Level)
|
(Level 2)
|
(Level)
|
||||||||||||
Derivative liability (1)
|
$ | 116,409 | $ | - | $ | 116,409 | $ | - |
(1)
|
Derivative liability amounts are due to the embedded derivatives of certain convertible notes payable issued by the Company and are calculated using the Black Scholes pricing model (see Note 7 - Derivative liability)
|
Year
|
Net Operating Income (Loss)
|
Deferred Tax Asset (Liability)
|
Expiration Year of NOL
|
|||||||||
2008
|
$ | (1,712,600 | ) | $ | 667,914 | 2028 | ||||||
2009
|
(385,160 | ) | 150,212 | 2029 | ||||||||
2010
|
13,939 | (5,436 | ) | 2030 | ||||||||
2011
|
(276,264 | ) | 107,743 | 2031 | ||||||||
2012
|
(814,334 | ) | 317,590 | 2032 | ||||||||
(3,174,419 | ) | 1,238,023 | ||||||||||
Valuation allowance
|
3,174,419 | (1,238,023 | ) | |||||||||
Net deferred income tax asset
|
$ | - | $ | - |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Net loss
|
$ | (814,334 | ) | $ | (276,264 | ) | ||
Tax adjustment
|
- | - | ||||||
(814,334 | ) | (276,264 | ) | |||||
Tax rate
|
39 | % | 39 | % | ||||
Income tax recovery at statutory rate
|
(317,590 | ) | (107,743 | ) | ||||
Valuation allowance
|
317,590 | 107,743 | ||||||
Provision for income taxes
|
$ | - | $ | - |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Net operating losses carried forward
|
$ | (3,174,419 | ) | $ | (2,360,085 | ) | ||
Valuation allowance
|
3,174,419 | 2,360,085 | ||||||
Net deferred income tax asset
|
$ | - | $ | - |
December 31,
|
|||||||||
2012 | 2011 | ||||||||
Convertible Debenture - Related Party
|
|||||||||
Principal amount
|
$ | 2,359,800 | $ | 2,359,800 | |||||
Debt discount
|
(66,785 | ) | (79,307 | ) | |||||
Convertible debenture, net of debt discount
|
$ | 2,293,015 | $ | 2,280,493 | |||||
Convertible Debenture - Unrelated Party
|
|||||||||
Principal amount
|
$ | 500,000 | $ | 500,000 | |||||
Debt discount
|
(13,357 | ) | (15,861 | ) | |||||
Convertible debenture, net of debt discount
|
$ | 486,643 | $ | 484,139 | |||||
Convertible Debenture - Totals
|
|||||||||
Principal amount
|
$ | 2,859,800 | $ | 2,859,800 | |||||
Debt discount
|
(80,142 | ) | 95,168 | ||||||
Convertible debenture, net of debt discount
|
$ | 2,779,658 | $ | 2,764,632 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Principal balance
|
$ | 2,359,800 | $ | 2,359,800 | ||||
Accrued interest
|
114,156 | 627,106 | ||||||
Total
|
$ | 2,473,956 | $ | 2,986,906 |
Interest
|
Maturity
|
December 31,
|
|||||||||||
Creditor
|
Rate
|
Date
|
2012
|
2011
|
|||||||||
Xing Investment Corp. (1)
|
10.00 | % |
5/12/2008
|
$ | 171,000 | $ | 171,000 | ||||||
Chase Bank (3)
|
7.24 | % |
2/13/2015
|
- | 28,463 | ||||||||
Salt Lake City Corporation (4)
|
3.25 | % |
8/1/2015
|
53,690 | 73,294 | ||||||||
William and Nina Wolfson (5)
|
11.00 | % |
2/27/2016
|
42,279 | - | ||||||||
Cyprus Credit Union (9)
|
2.69 | % |
12/5/2014
|
20,410 | - | ||||||||
Salt Lake City Corporation (10)
|
5.00 | % |
9/1/2017
|
47,785 | - | ||||||||
Total
|
335,164 | 272,757 | |||||||||||
Less: Current portion
|
(222,179 | ) | (200,629 | ) | |||||||||
Long-term portion
|
$ | 112,985 | $ | 72,128 |
Interest
|
Maturity
|
December 31,
|
|||||||||||
Creditor
|
Rate
|
Date
|
2012
|
2011
|
|||||||||
Castleton Equipment (7)
|
16.96 | % |
4/23/2016
|
$ | 46,651 | $ | - | ||||||
Time Payment Corp (8)
|
17.75 | % |
9/5/2016
|
15,851 | - | ||||||||
Total
|
62,502 | - | |||||||||||
Less: Current portion
|
(14,624 | ) | - | ||||||||||
Long-term portion
|
$ | 47,878 | $ | - |
Interest
|
Maturity
|
December 31,
|
||||||||||||
Creditor
|
Rate
|
Date
|
2012
|
2011
|
||||||||||
Asher Enterprises, Inc. (2)*
|
8.00 | % |
1/9/2012
|
$ | - | $ | 60,500 | |||||||
Asher Enterprises, Inc. (2)*
|
8.00 | % |
3/16/2012
|
3,000 | 32,500 | |||||||||
Asher Enterprises, Inc. (2)*
|
8.00 | % |
4/25/2012
|
25,000 | 25,000 | |||||||||
Asher Enterprises, Inc. (2)*
|
8.00 | % |
9/12/2012
|
22,500 | 22,500 | |||||||||
Asher Enterprises, Inc. (2)*
|
8.00 | % |
11/6/2012
|
42,500 | - | |||||||||
Southridge Partners II, LP (11)
|
0 | % |
2/28/2013
|
75,000 | - | |||||||||
Eastshore Enterprises, Inc. (12)
|
8.00 | % |
8/17/2014
|
35,000 | - | |||||||||
Debt discount - convertible notes, net
|
(38,105 | ) | (41,793 | ) | ||||||||||
Total, net
|
164,895 | 98,707 | ||||||||||||
Less: Current portion
|
(158,374 | ) | (98,707 | ) | ||||||||||
Long-term portion
|
$ | 6,521 | $ | - | ||||||||||
*
|
For all Asher notes payable, the interest rate increases from 8% to 22% after May 19, 2013 at the option of Asher.
|
Interest
|
Maturity
|
December 31,
|
|||||||||||
Creditor
|
Rate
|
Date
|
2012
|
2011
|
|||||||||
Wasatch Capital Corp. (related party) (6)
|
5.00 | % |
11/10/2018
|
$ | - | $ | 105,000 | ||||||
Richard D. Surber (related party) (13)
|
20.00 | % |
11/6/2017
|
25,000 | - | ||||||||
Total, net
|
25,000 | 105,000 | |||||||||||
Less: Current portion
|
(3,534 | ) | - | ||||||||||
Long-term portion
|
$ | 21,466 | $ | 105,000 |
(1)
|
On May 12, 2006, Green borrowed $171,000 from Xing Investment Corp with a convertible promissory note. The note is interest bearing at 10% per annum with no interest due until the note maturity date of May 12, 2008. Both principal and accrued interest, at the option of the note holder, may be converted into Common stock of Green at $0.01 per share. The note was not liquidated at the maturity date and is currently in default. No payments have been made on the obligation because Green is unable to locate Xing Investment Corp. or its representatives. As of December 31, 2012 and 2011, accrued interest reported in accounts payable and accrued expenses was $34,200.
|
(2)
|
During the period from April 5, 2011 through February 2, 2012, Green has issued a series of convertible promissory notes with an aggregate face amount of $197,500 to Asher Enterprises, Inc. that mature from January 9, 2012 to November 6, 2012. The transactions have been handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. The notes mature in approximately 270 days from issuance and bear interest at a rate of 8% per annum. At the holder’s option, the notes can be converted into Green’s common shares at the conversion rates of 56% to 61% discount to the market price of the lowest three trading prices of Green’s common shares during the ten-day period ending one trading day prior to the date of the conversion. As amended, the interest rate increases to 22% after May 19, 2013 at the option of Asher. As of December 31, 2012 $107,500 of principal and interest on the notes had been converted into 3,863,077 shares of common stock. As of December 31, 2012, the notes are considered in default. Accordingly, a loss contingency of $46,500 has been recorded, which is calculated by multiplying the December 31, 2012 principal balance on the notes of $93,000 by 50%. As of December 31, 2012, the total of principal, interest, and default amount owed to Asher as of December 31, 2012 was $151,681. The Company is working on a cure for the default. On July 2, 2013, Asher and Green retroactively amended the notes to provide that the 50% default fee may not be converted to equity of Green until May 20, 2013.
The exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. As a result, the Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability (see Note 7 - Derivative Liability).
|
(3)
|
On January 6, 2010, Landis Salons, Inc. received a loan in the amount of $51,930 from Chase Bank for the financing of a Company truck. The loan has a maturity date of February 13, 2015 and bears interest at the rate of 7.24% per annum. Principal and interest payments of $899 are made monthly over a five year term commencing February 2010. The loan is secured by a lien on the vehicle in addition to the corporate guarantee for the loan. Richard Surber, CEO of the Company has personally guaranteed the loan. The loan was refinanced and paid off on September 5, 2012. As of December 31, 2012, the note balance is $0. Principal payments made on the note during the year ended December 31, 2012 amounted to $28,463. See loan #9 below for details of the new, refinanced note.
|
(4)
|
On June 18, 2010, Landis Salons, Inc. received a loan in the amount of $100,000 from the Division of Economic Development of Salt Lake City Corporation. The loan includes a 1% origination fee and bears interest at the rate of 3.25% per annum. Principal and interest payments are made monthly over a five year term commencing June 2010. The loan is secured by a $25,000 certificate deposit held in the name of Landis Salons, Inc. and is personally guaranteed by Richard Surber, CEO of Green. The certificate of deposit is considered long-term, restricted cash because it is collateral for the loan. As of December 31, 2012, the note balance is $53,690. Principal payments made on the note during the year ended December 31, 2012 amounted to $19,604.
|
(5)
|
On February 27, 2012, Green and Landis Experience Center, LLC issued an 11% note payable in the principal face amount of $50,000 to William and Nina Wolfson in exchange for a cash payment of the same amount. The note has a due date of February 27, 2016. The note provides for monthly payments in the amount of $1,292.28 of principal and interest. In addition to the Company’s guarantee to the note, Richard Surber has personally guaranteed the note. As of December 31, 2012, the note balance is $42,279. Principal payments made on the note during the year ended December 31, 2012 amounted to $7,721.
|
(6)
|
On July 12, 2010, Landis Salons II, Inc. issued a promissory note in the principal amount of $105,000 payable to Wasatch Capital Corporation, a subsidiary of Nexia. The note bears 5% per year simple interest and accrues until the November 10, 2018 maturity date at which time accrued interest and principal are due in one payment. The note was issued to Wasatch in consideration of Wasatch assigning its interest in a trust deed note in the amount of $105,000. On September 28, 2012, Landis II entered into a Release and Termination of Note Pledge Agreement where in it was agreed that the trust deed that was pledged as collateral pursuant to the July 10, 2010 Note Pledge Agreement between Landis II and its landlord be cancelled, therefore the balance at December 31, 2012 was $0. Even though the note has been cancelled, accrued interest on the note as of December 31, 2012 was $11,661 and is still due.
|
(7)
|
On April 23, 2012, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $53,230 with Castleton Capital 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. Landis has the option to purchase the leased salon equipment at maturity for a $1 bargain purchase amount. 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. As of December 31, 2012, the note balance is $46,652. Principal payments made on the note during the year ended December 31, 2012 amounted to $6,578.
|
(8)
|
On July 26, 2012, Landis Salons, Inc. entered into a capital lease financing agreement in the principal amount of $16,826 with Time Payment Corporation. The lease agreement requires 48 monthly payments of principal and interest in the amount of $485. Interest is at the rate of 17.75% per year and the maturity date is September 5, 2016. Landis has the option to purchase the leased salon equipment at maturity for $2,178 or less. 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. As of December 31, 2012, the note balance is $15,851. Principal payments made on the note during the year ended December 31, 2012 amounted to $975.
|
(9)
|
On September 5, 2012, Landis Salons, Inc. received a loan in the amount of $22,959 from Cyprus Credit Union for the refinancing of a Company truck. The loan replaced the loan for the truck to Chase bank (see loan #3 above). The loan has a maturity date of December 5, 2014 and bears interest at the rate of 2.69% per annum. Principal and interest payments of $899 are made monthly over 27 months commencing October 5, 2012. The loan is secured by a lien on the vehicle in addition to the corporate guarantee for the loan. Richard Surber, CEO of the Company has personally guaranteed the loan. As of December 31, 2012, the note balance is $20,410. Principal payments made on the note during the year ended December 31, 2012 amounted to $2,548.
|
(10)
|
On August 20, 2012, the Board of Directors of LEC approved that LEC enter into a loan agreement with Salt Lake City 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 $943.56 commencing October 1, 2012. In addition to corporate guarantees and the personal guarantee by Richard Surber, President, CEO, and Director of LEC, a certificate of deposit is being held as collateral for the loan. As of December 31, 2012, the note balance is $47,785. Principal payments made on the note during the year ended December 31, 2012 amounted to $2,215.
|
(11)
|
On August 15, 2012, Green issued a $75,000 promissory convertible promissory note to Southridge Partners II, LP as a condition of Southridge entering into an Equity Purchase Agreement with the Company (see Note 11). The transaction has been handled as a private sale exempt from registration under Rule 506 of the Securities Act of 1933. The note bears no interest and matures on February 28, 2013 at which time a balloon payment of the entire principal amount is due. The holder of the note is entitled any time after the maturity date to convert the note into common stock of the Company at 70% of the average of the two lowest closing bid prices for the five day prior to the date of the conversion. The Company determined the note contained a beneficial conversion feature and therefore recorded a $32,143 debt discount. As of December 31, 2012, the balance of the note was $75,000 and the balance of the debt discount was $9,626. No payments were made on the note during the year ended December 31, 2012.
|
(12)
|
On August 17, 2012, Green issued a $35,000 convertible promissory note to Eastshore Enterprises, Inc. Green converted $15,000 of accounts payable to Eastshore 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 holder 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, 2012, none of the note had been converted into shares of common stock. As of December 31, 2012, the balance of the note was $35,000 and the balance of the debt discount was $28,479. No payments were made on the note during the year ended December 31, 2012.
The exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. As a result, the Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability (see Note 7 - Derivative Liability).
|
(13)
|
On November 5, 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 $662.35 and a demand feature by which the note can be called upon the demand of Mr. Surber. Landis Salons II as security for the note 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. As of December 31, 2012, the balance of the note was $25,000. No payments were made on the note during the year ended December 31, 2012. Mr. Surber is also providing his personal guaranty for several lines of credit and credit cards that are being utilized by the company and its operating subsidiaries. In addition to the above, Mr. Surber is a personal guarantor to notes payable by the Company with remaining principal balances of $242,100. Subsequent to December 31, 2012, Mr. Surber continues to provide his personal guaranty for several lines of credit, credit cards, and loans that are being utilized by the Company and its subsidiaries. The total amount of these credit obligations could exceed the amount of $300,000 from time to time.
|
Operating Leases
|
||||
For the fiscal years ending December 31:
|
||||
2013
|
$ | 191,066 | ||
2014
|
198,859 | |||
2015
|
188,415 | |||
2016
|
131,741 | |||
2017
|
137,801 | |||
Thereafter
|
348,724 | |||
Total operating lease payments
|
$ | 1,196,606 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Total, net
|
$ | 62,502 | $ | - | ||||
Less current portion
|
14,624 | - | ||||||
Long-term portion
|
$ | 47,878 | $ | - |
Capital Leases
|
||||
For the fiscal years ending December 31:
|
||||
2013
|
$ | 24,238 | ||
2014
|
24,238 | |||
2015
|
24,238 | |||
2016
|
10,502 | |||
Thereafter
|
- | |||
Total operating lease payments
|
83,216 | |||
Less interest for the terms
|
(20,714 | ) | ||
Total, net
|
$ | 62,502 |
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: July 29, 2013
|
By: /s/ Richard D. Surber
|
|
Richard D. Surber
|
||
President, Chief Executive Officer and Director
|
||
DATE: July 29, 2013
|
By: /s/ Scott C. Coffman
|
|
Scott C. Coffman
|
||
Chief Financial Officer and Director
|
Incorporated by Reference
|
||||||
Exhibit Number
|
Description
|
Form
|
File Number
|
Exhibit Number
|
Filing Date
|
Provided Herewith
|
3(i)
|
Amended and Restated Certificate of Incorporation
|
10-12G/A
|
000-54018
|
3(i)
|
8/23/2010
|
|
3(ii)
|
Bylaws
|
10-12G/A
|
000-54018
|
3(ii)
|
8/23/2010
|
|
3(iii)
|
Plan of Merger
|
8-K
|
000-54018
|
3(iii)
|
8/26/2010
|
|
3(iv)
|
Plan of Merger and Share Exchange
|
8-K
|
000-54018
|
3(iv)
|
8/31/2010
|
|
3(v)
|
Utah Articles of Incorporation
|
8-K
|
000-54018
|
3(v)
|
8/31/2010
|
|
4(i)
|
Certificate of Designation for Series B Preferred Stock.
|
10-12G/A
|
000-54018
|
4(i)
|
8/23/2010
|
|
4(ii)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to DHI dated April 30, 2008.
|
10-12G/A
|
000-54018
|
4(ii)
|
8/23/2010
|
|
4(iii)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates, Inc. dated January 15, 2010.
|
10-12G/A
|
000-54018
|
4(iii)
|
8/23/2010
|
|
4(iv)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Desert Vista Capital, LLC. dated January 15, 2010.
|
10-12G/A
|
000-54018
|
4(iv)
|
8/23/2010
|
|
4(v)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates, Inc. dated March 16, 2010.
|
10-12G/A
|
000-54018
|
4(v)
|
8/23/2010
|
|
4(vi)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Akron Associates dated May 11, 2010.
|
10-12G/A
|
000-54018
|
4(vi)
|
8/23/2010
|
|
4(vii)
|
8% Series A Senior Subordinated Convertible Redeemable Debenture issued to Desert Vista Capital, LLC dated May 11, 2010.
|
10-12G/A
|
000-54018
|
4(vii)
|
8/23/2010
|
|
4(viii)
|
Amended Certificate of Designation for Series B Preferred Stock.
|
10-12G/A
|
000-54018
|
4(viii)
|
9/22/2010
|
|
10(i)
|
8% Convertible Promissory Note issued February 2, 2012, to Asher Enterprises, Inc.
|
10-K
|
000-54018
|
10(i)
|
4/16/2012
|
|
10(ii)
|
11% Promissory Note issued February 27, 2012 to William and Nina Wolfson
|
10-K
|
000-54018
|
10(ii)
|
4/16/2012
|
|
10(iii)
|
May 22, 2012 Security Agreement with Richard Surber, CEO of the Company
|
10-Q
|
000-54018
|
10(iii)
|
1/30/2012
|
|
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, Scott C. Coffman, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
Exhibit 31.01
|
|||||
CERTIFICATIONS
|
|||||
I, Richard D. Surber, certify that:
|
|||||
1.
|
I have reviewed this Annual Report on Form 10-K of Green Endeavors, Inc.;
|
||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||||
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||||
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||||
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
||||
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||||
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||||
Date:
|
July 29, 2013
|
||||
By:
|
/s/ Richard D. Surber
|
||||
Richard D. Surber
|
|||||
President and Chief Executive Officer
|
|||||
(Principal Executive Officer)
|
Exhibit 31.02
|
|||||
CERTIFICATIONS
|
|||||
I, Scott C. Coffman, certify that:
|
|||||
1.
|
I have reviewed this Annual Report on Form 10-K of Green Endeavors, Inc.;
|
||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||||
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||||
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||||
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||||
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
||||
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||||
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|||||
Date:
|
July 29, 2013
|
||||
By:
|
/s/ Scott C. Coffman
|
||||
Scott C. Coffman
|
|||||
Chief Financial Officer
|
|||||
(Principal Accounting and Financial Officer)
|
Exhibit 32.01
|
|||||
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
|
|||||
PURSUANT TO 18 U.S.C. SECTION 1350,
|
|||||
AS ADOPTED PURSUANT TO SECTION 906
|
|||||
OF THE SARBANES-OXLEY ACT OF 2002
|
|||||
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 of Green Endeavors, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard D. Surber, President and Chief Executive Officer of Green Endeavors, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
|||||
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
||||
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
||||
Date:
|
July 29, 2013
|
||||
By:
|
/s/ Richard D. Surber
|
||||
Richard D. Surber
|
|||||
President and Chief Executive Officer
|
|||||
(Principal Executive Officer)
|
|||||
A signed original of this written statement required by Section 906 has been provided to Green Endeavors, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
Exhibit 32.02
|
|||||
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
|
|||||
PURSUANT TO 18 U.S.C. SECTION 1350,
|
|||||
AS ADOPTED PURSUANT TO SECTION 906
|
|||||
OF THE SARBANES-OXLEY ACT OF 2002
|
|||||
In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 of Green Endeavors, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Scott C. Coffman, Chief Financial Officer of Green Endeavors, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
|||||
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
||||
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
||||
Date:
|
July 29, 2013
|
||||
By:
|
/s/ Scott C. Coffman
|
||||
Scott C. Coffman
|
|||||
Chief Financial Officer
|
|||||
(Principal Accounting and Financial Officer)
|
|||||
A signed original of this written statement required by Section 906 has been provided to Green Endeavors, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
Note 12 - Stockholders' Deficit
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Notes | |
Note 12 - Stockholders' Deficit | Note 12 Stockholders Deficit
Preferred Stock
Green is authorized to issue 15,000,000 shares of preferred stock (par value $.001 per share). Greens preferred stock may be divided into such series as may be established by the Board of Directors. As of December 31, 2012 Green has two series of preferred stock: Convertible Series B Preferred and Convertible Supervoting Preferred.
The Preferred Stock is classified as equity as long as there are sufficient shares available to effect the conversion. In some instances certain contracts may pass the option to receive cash or common stock to the shareholder. In this case, it is assumed that a cash settlement will occur and balance sheet classification of the affected Preferred Stock and related preferred paid-in capital as a liability.
Convertible Supervoting Preferred Stock
Each share of the Convertible Supervoting Preferred Stock is convertible into 100 shares of Greens Common stock and has the voting rights equal to 100 shares of Common stock.
On August 4, 2010, by Written Consent of the majority of the voting rights of the shareholders of Green, consent was given to authorize the Board of Directors to amend the designations of the Preferred Stock. The change in the designation of the Convertible Supervoting Preferred Stock increased its voting rights from 10 votes per share to 100 votes per share.
On April 27, 2012, Nexia Holdings Inc., converted $144,558 of accrued interest into 4,150,000 shares of convertible preferred supervoting stock of the Company. The shares were issued with a restrictive legend to Nexia, the parent corporation of the Company. The issuance of the shares took place on May 4, 2012. The issuance results in Nexia holding 100% of the 10 million shares of Supervoting Preferred Stock authorized for the Company, resulting in Nexia holding 1 billion votes in any shareholder action. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
As of December 31, 2012 and 2011, Green had 10,000,000 and 5,850,000 shares of Convertible Supervoting Preferred stock issued and outstanding, respectively.
Convertible Series B Preferred Stock
Each share of Greens Convertible Series B Preferred Stock has one vote per share and is convertible into $5.00 worth of common stock. The number of common shares received is based on the average 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.
During the year ended December 31, 2012, the Board of Directors approved the conversions of 33,254 shares of Series B Preferred shares into 4,472,984 shares of Common Stock. The shares were converted at prices per share of approximately $0.02 to $0.04 based on the conversion provisions for the Convertible Series B Preferred Stock designation.
On September 28, 2012, Landis II entered into a Release and Termination of Stock Pledge Agreement wherein it was agreed that the 50,000 shares of restricted Convertible Series B Preferred stock that was pledged as collateral pursuant to the July 16, 2010 Stock Pledge Agreement between Landis II and its landlord be returned and the pledge agreement be terminated. The shares have been cancelled and are no longer considered issued and outstanding.
As of December 31, 2012 and 2011, Green had 547,478 and 630,732 shares of Convertible Series B Preferred stock issued and outstanding, respectively.
Common Stock
Green is authorized to issue 10,000,000,000 shares of common stock (par value $0.0001 per share).
On March 29, 2012, the Company filed with the State of Utah an Amendment to its Articles of Incorporation that increased the number of authorized shares of common stock from 2,500,000,000 to 10,000,000,000. This action was taken after notice to the shareholders and having consent from a majority of the voting rights. As of December 31, 2012 and 2011, Green had 22,265,197 and 2,854,434 shares of common stock issued and outstanding, respectively.
During the year ended December 31, 2012, the Board of Directors approved the conversions of $93,000 of the Convertible Notes held by Asher Enterprises, Inc. ($90,000 principal and $3,000 of interest) into 3,681,463 shares of Common Stock. The shares were converted at prices per share of approximately $0.03 to $0.07 based on the conversion provisions of the convertible notes.
During the year ended December 31, 2012, the Board of Directors approved the conversions of 33,254 shares of Series B Preferred shares into 4,472,984 shares of Common Stock. The shares were converted at prices per share of approximately $0.03 to $0.04 based on the conversion provisions for the Series B Preferred Stock designation.
On May 23, 2012, Nexia Holdings Inc., converted $400,000 of accrued interest into 10,526,316 shares of common stock. The transaction was valued at $400,000 as per the conversion provisions of the convertible debt. The shares were issued with a restrictive legend to Nexia, the parent corporation of the Company. The issuance of the shares took place on May 24, 2012. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
During the year ended December 31, 2012, 730,000 shares of common stock were issued to five employees pursuant to the exercise of their stock options at a value of $103,650. Cash proceeds from the exercising of these stock options was $23,985. |
Note 8 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Details | ||
Net loss | $ (814,334) | $ (276,264) |
Effective Income Tax Rate, Continuing Operations | 39.00% | 39.00% |
Income Tax Reconciliation, Income Tax Expense (Benefit), at Federal Statutory Income Tax Rate | (317,590) | (107,743) |
Income Tax Reconciliation, Change in Deferred Tax Assets Valuation Allowance | $ 317,590 | $ 107,743 |
Consolidated Statements of Operations (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Income Statement | ||
Services, net of discounts | $ 2,329,130 | $ 2,130,184 |
Product, net of discounts | 819,386 | 683,842 |
Total revenue | 3,148,516 | 2,814,026 |
Costs and expenses: | ||
Cost of services | 1,375,413 | 1,186,726 |
Cost of product | 467,421 | 427,789 |
Depreciation | 123,902 | 93,983 |
General and administrative | 1,415,224 | 1,050,556 |
Total costs and expenses | 3,381,960 | 2,759,054 |
Income (loss) from operations | (233,444) | 54,972 |
Other income (expenses): | ||
Interest income | 812 | 834 |
Interest expense | (238,091) | (214,995) |
Interest expense, related parties | (206,590) | (207,743) |
Gain (loss) on derivative fair value adjustment | (94,850) | 89,108 |
Other income (expense) | (42,171) | 1,560 |
Total other expenses | (580,890) | (331,236) |
Net loss | $ (814,334) | $ (276,264) |
Net loss per common share - basic and diluted | $ (0.06) | $ (0.12) |
Weighted average common shares outstanding - basic and diluted | 14,024,096 | 2,299,343 |
Note 5 - Other Assets
|
12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||
Notes | ||||||||||||||||||||||||
Note 5 - Other Assets | Note 5 Other Assets
The following table shows Other assets as of December 31, 2012 and 2011:
(1) On July 9, 2010, the Board of Directors approved the issuance of 50,000 shares of restricted Series B Preferred shares to Landis Salons II, Inc., a subsidiary of Green, to be used as collateral for a lease entered into by Landis Salons II to serve as the location for a new Landis Lifestyle Salon. These shares were then assigned to the landlord of Landis II as a security deposit with a related value of $250,000. On September 28, 2012, the landlord returned the shares back to Landis II and terminated the requirements of the Stock Pledge Agreement. As of December 31, 2012, the shares have been cancelled and are no longer considered issued and outstanding.
(2) On July 12, 2010, Landis Salons II, Inc. issued a promissory note in the principal amount of $105,000 payable to Wasatch Capital Corporation, a subsidiary of Nexia. Principal and interest, accruing at the rate of 5% per year, will be due on or before November 10, 2018. The note was issued to Wasatch in consideration of Wasatch assigning its interest in a trust deed note in the amount of $105,000 and has been recorded as a note receivable. Landis II then pledged as collateral the trust deed note as a material inducement for Landis II to be able to enter into a lease agreement for the opening of a salon in Salt Lake City. On September 28, 2012, the landlord terminated and canceled the Note Pledge Agreement and released its interest in the trust deed note back to Landis II. As of December 31, 2012 and 2011, there was $11,661 and $7,724 of accrued interest on the promissory note, respectively.
(3) The certificate of deposit ("CD") is considered long-term, restricted cash because it is collateral for the June 18, 2010, $100,000 note payable to the Division of Economic Development of Salt Lake City Corporation (see item 4 of Note 10 below). The initial value of the CD was $25,000. As of December 31, 2012 and 2011, the CD has $2,015 and $1,226 of accrued interest, respectively. |
Note 2 - Summary of Significant Accounting Policies (Policies)
|
12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
|||||||||||||
Policies | |||||||||||||
Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the accounts of Green and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly-owned by Green. |
||||||||||||
Use of Estimates | Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
||||||||||||
Fair Value Measurements | 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. |
||||||||||||
Cash and Cash Equivalents | 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, 2012 and 2011, Green had no cash equivalents. |
||||||||||||
Inventory | Inventory
Inventory consists of items held for resale and is carried at the lower of cost or market. Cost is determined using the first in, first out (FIFO) method. |
||||||||||||
Property, Plant, and Equipment | Property, Plant, and Equipment
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:
For the years ended December 31, 2012 and 2011, Green recorded depreciation expense of $123,902 and $93,983, respectively. Maintenance and repair costs are expensed as incurred. |
||||||||||||
Long-lived Assets | Long-Lived Assets
We periodically review the carrying amount of our long-lived assets for impairment. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. There were no impairments of long-lived assets during the years ended December 31, 2012 and 2011. |
||||||||||||
Revenue Recognition | Revenue Recognition
There are primary two types of revenue for the Company: 1) providing hair salon services, and 2) selling hair salon products. Revenue is recognized at the time the service is performed or the product is delivered. All revenue sources are domestic. In some cases, such as the sale of gift cards, revenue is deferred until the gift card is redeemed. |
||||||||||||
Deferred Revenue | Deferred Revenue
Deferred revenue arises when customers pay for products and/or services in advance of revenue recognition. Greens deferred revenue consists solely of unearned revenue associated with the purchase of gift certificates for which revenue is recognized only when the service is performed or the product is delivered. As of December 31, 2012 and 2011, deferred revenue was $59,109 and $57,823, respectively. |
||||||||||||
Advertising | 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, 2012 and 2011, advertising costs amounted to $93,459 and $96,409, respectively. |
||||||||||||
Stock-based Compensation | Stock-Based Compensation
Green recognizes the cost of employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the fair value of the restricted stock award, option, or purchase right and is recognized as expense, less expected forfeitures, over the requisite service period, which typically equals the vesting period. Because the employee is expected to and has historically received shares of common stock on or about the date of the employee stock option grant date as part of the exercise process, the fair value of each stock issuance is determined using the fair value of Greens common stock on the grant date. |
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Income Taxes | Income Taxes
Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Also, Green's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Green is 100% consolidated into its parent company, Nexia, and therefore does not file an income tax return. Its financial amounts are consolidated into the Nexia income tax returns. As of December 31, 2012 and 2011, a 100% valuation allowance on the deferred tax asset and therefore is not reflected on the balance sheets. |
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Net Loss Per Share | Net Loss Per Share
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the year ended December 31, 2012, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 1,322,583,808 and 638,719,918 such potentially dilutive shares excluded as of December 31, 2012 and 2011, respectively. |
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Reclassification of Financial Statement Accounts | Reclassification of Financial Statement Accounts
Certain amounts in the December 31, 2011 financial statements have been reclassified to conform to the presentation in the December 31, 2012 financial statements. |
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Recent Accounting Pronouncements | 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 Greens consolidated financial position, results of operations or cash flows upon adoption. |
Note 9 - Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $)
|
12 Months Ended | 0 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2012
Convertible Debt Securities
|
Dec. 31, 2011
Convertible Debt Securities
|
Dec. 31, 2012
Convertible Debenture - Related Party
|
Dec. 31, 2011
Convertible Debenture - Related Party
|
Dec. 31, 2012
Convertible Debenture - Unrelated Party
|
Dec. 31, 2011
Convertible Debenture - Unrelated Party
|
|
Long-term Debt, Gross | $ 2,859,800 | $ 2,859,800 | $ 2,359,800 | $ 2,359,800 | $ 500,000 | $ 500,000 | ||
Debt discount amortization | 128,357 | 125,003 | (80,142) | 95,168 | (66,785) | (79,307) | (13,357) | (15,861) |
Convertible Subordinated Debt, Current | $ 2,779,658 | $ 2,764,632 | $ 2,293,015 | $ 2,280,493 | $ 486,643 | $ 484,139 |
Note 13 - Stock-based Compensation
|
12 Months Ended |
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Dec. 31, 2012
|
|
Notes | |
Note 13 - Stock-based Compensation | Note 13 Stock-Based Compensation
On December 2, 2011, the Board of Directors approved a stock-based compensation program entitled The 2011 Benefit Plan of Green Endeavors, Inc. (the Plan) wherein common stock options are granted to employees. A total of 1,500,000 shares of the Greens 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 and during the year ended December 31, 2011, the company granted 300,000 stock options to three employees (100,000 options each) for services of which all were exercised by the year ended December 31, 2011. For the year ended December 31, 2011, stock-based compensation expense was $25,364 and was accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The weighted average components used for the calculation of the fair value for the options granted were: $0.06 exercise price, one year term, 422% volatility, and a . 12% risk free rate. The income tax benefit related to the 2011 stock-based compensation expense was $0. Also, the aggregate intrinsic value of all options outstanding and exercisable at December 31, 2011, was $0. For the year ended December 31, 2011, there were no expired or cancelled grants. As of December 31, 2011, grants unexercised and shares available for future stock-based compensation grants were -0- and 1,200,000 shares, respectively.
Under the Plan and during the year ended December 31, 2012, the company granted 730,000 stock options to five employees for services. For the year ended December 31, 2012, stock-based compensation expense of $71,775 was accounted for under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. The weighted average components used for the calculation of the fair value for the options granted were approximately: $0.08 exercise price, one year term, 502% volatility, and a .18% risk free rate. The income tax benefit related to the stock-based compensation expense during the period was $0. Also, the aggregate intrinsic value of all options outstanding and exercisable at December 31, 2012, was $0. As of December 31, 2012, 1,030,000 shares under the grants had been exercised and there were no unexercised grants. For the year ended December 31, 2012, there were no expired or cancelled grants. As of December 31, 2012, grants unexercised and shares available for future stock-based compensation grants were -0- and 470,000 shares, respectively. |
Note 5 - Other Assets (Details) (USD $)
|
12 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jun. 18, 2010
|
Dec. 31, 2012
Certificate of Deposit
|
Dec. 31, 2011
Certificate of Deposit
|
Dec. 31, 2012
Wasatch Capital Corp
|
Dec. 31, 2011
Wasatch Capital Corp
|
Dec. 31, 2010
Series B Preferred Stock
Landis Salons II, Inc.
|
|
Stock Issued During Period, Shares, Issued for Noncash Consideration | 50,000 | |||||||
Stock Issued During Period, Value, Issued for Noncash Considerations | $ 250,000 | |||||||
Convertible Preferred Stock, Settlement Terms | On September 28, 2012, the landlord returned the shares back to Landis II and terminated the requirements of the Stock Pledge Agreement. As of December 31, 2012, the shares have been cancelled and are no longer considered issued and outstanding. | |||||||
Interest Receivable, Current | 2,015 | 1,226 | 11,661 | 7,724 | ||||
Certificates of Deposit, at Carrying Value | $ 26,226 | $ 27,015 | $ 25,000 |
Note 9 - Related Party Transactions: Schedule Of Related Party Principal and Accrued Interest (Details) (Convertible Debenture - Related Party, USD $)
|
0 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Convertible Debenture - Related Party
|
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Long-term Debt, Gross | $ 2,359,800 | $ 2,359,800 |
Debt Instrument, Convertible, Interest Expense | 114,156 | 627,106 |
Convertible Debt, Current | $ 2,473,956 | $ 2,986,906 |
Note 11 - Lease Commitments: Schedule of Capital Leased Assets (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||
Schedule of Capital Leased Assets |
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Note 6 - Fair Value Measurements: Fair Value Measurements, Recurring (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring | Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of December 31, 2012 and 2011, consisted of the following:
(1) Derivative liability amounts are due to the embedded derivatives of certain convertible notes payable issued by the Company and are calculated using the Black Scholes pricing model (see Note 7 - Derivative liability) |
Note 5 - Other Assets: Schedule of Other Assets (Tables)
|
12 Months Ended | |||||||||||||||||||||||
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Dec. 31, 2012
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Tables/Schedules | ||||||||||||||||||||||||
Schedule of Other Assets |
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Note 10 - Notes Payable: Summary of Captial Leases Payable (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Captial Leases Payable |
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Note 1 - Organization (Details)
|
Dec. 31, 2012
|
Mar. 29, 2012
|
Mar. 28, 2012
|
Dec. 31, 2011
|
---|---|---|---|---|
Common Stock, Shares Authorized | 10,000,000,000 | 10,000,000,000 | 2,500,000,000 | 10,000,000,000 |
Preferred Stock, Shares Authorized | 15,000,000 | |||
Undesignated
|
||||
Preferred Stock, Shares Authorized | 3,000,000 | 3,000,000 | ||
Convertible Preferred Stock
|
||||
Preferred Stock, Shares Authorized | 2,000,000 | |||
Super Voting Preferred Stock
|
||||
Preferred Stock, Shares Authorized | 10,000,000 |
Note 6 - Fair Value Measurements: Fair Value Measurements, Recurring (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Derivative liability | $ 231,609 | $ 116,409 |
Fair Value, Inputs, Level 2
|
||
Derivative liability | $ 231,609 | $ 116,409 |
Note 9 - Related Party Transactions: Schedule of Related Party Transactions (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions |
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Note 11 - Lease Commitments: As of December 31, 2012, Future Minimum Lease Payments Under Non-cancelable Operating Leases Were As Follows (Details) (USD $)
|
Dec. 31, 2012
|
---|---|
Details | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | $ 191,066 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Two | 198,859 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Three | 188,415 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Four | 131,741 |
Operating Leases, Future Minimum Payments, Due in Rolling Year Five | 137,801 |
Operating Leases, Future Minimum Payments, Due in Rolling after Year Five | 348,724 |
Operating Leases, Future Minimum Payments Due | $ 1,196,606 |
Note 18 - Subsequent Events (Details) (USD $)
|
12 Months Ended | 0 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jun. 27, 2013
Subsequent Event
|
Jun. 11, 2013
Subsequent Event
|
May 31, 2013
Subsequent Event
|
May 29, 2013
Subsequent Event
|
May 27, 2013
Subsequent Event
|
May 22, 2013
Subsequent Event
|
Apr. 15, 2013
Subsequent Event
|
May 27, 2013
Subsequent Event
Conversion 2
|
May 22, 2013
Subsequent Event
Conversion 2
|
|
Debt Instrument, Face Amount | $ 37,400 | ||||||||||
Interest Rate | 20.00% | 10.00% | |||||||||
Debt Instrument, Periodic Payment, Principal | 1,725.82 | ||||||||||
Debt Instrument, Maturity Date, Description | the note is due 24 months from signing. | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 32,000 | ||||||||||
Conversion of Stock, Shares Converted | 2,797 | 2,000 | 2,600 | 2,772 | 2,772 | ||||||
Conversion of Series B preferred stock to common stock | 448 | 64,959 | 1,280,678 | 1,035,197 | 1,069,078 | 1,000,000 | 1,000,000 | ||||
Debt Instrument, Convertible, Conversion Price | $ 0.0032 | $ 0.0146 | $ 0.00966 | $ 0.0035 | $ 0.01216 | $ 0.0075 | $ 0.01386 | $ 0.01386 | |||
Conversion of convertible note payable to common shares | $ 14,500 | $ 3,500 | $ 3,800 | $ 5,800 | |||||||
Conversion of convertible note payable to common shares | 1,093,750 | 1,085,714 | 733,333 |
Note 11 - Lease Commitments (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Details | ||
Operating Leases, Rent Expense, Net | $ 232,247 | $ 154,615 |
Capital Leased Assets, Gross | $ 70,256 |
Note 2 - Summary of Significant Accounting Policies: Advertising (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Details | ||
Advertising Revenue Cost | $ 93,459 | $ 96,409 |
Note 14 - Equity Purchase Agreement (Details) (USD $)
|
Aug. 15, 2012
|
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Details | |
Financing Commitment Amount | $ 10,000,000 |
Financing Commitment, maximum draw percent | 4.99% |
Financing Commitment, purchase price as percent of closing bid | 91.00% |
Financing Commitment, initiation fee | $ 75,000 |
Note 4 - Property, Plant, and Equipment: Summary of Property, Plant, and Equipment by Major Category (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Summary of Property, Plant, and Equipment by Major Category | The following is a summary of Greens Property, plant, and equipment by major category as of December 31, 2012:
The following is a summary of Greens Property, plant, and equipment by major category as of December 31, 2011:
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Note 2 - Summary of Significant Accounting Policies
|
12 Months Ended | ||||||||||||
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Dec. 31, 2012
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Notes | |||||||||||||
Note 2 - Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Green and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly-owned by Green.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value 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.
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, 2012 and 2011, Green had no cash equivalents.
Inventory
Inventory consists of items held for resale and is carried at the lower of cost or market. Cost is determined using the first in, first out (FIFO) method.
Property, Plant, and Equipment
Property, plant, and equipment is stated at historical cost. Depreciation is generally provided over the estimated useful lives, using the straight-line method, as follows:
For the years ended December 31, 2012 and 2011, Green recorded depreciation expense of $123,902 and $93,983, respectively. Maintenance and repair costs are expensed as incurred.
Long-Lived Assets
We periodically review the carrying amount of our long-lived assets for impairment. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. There were no impairments of long-lived assets during the years ended December 31, 2012 and 2011.
Revenue Recognition
There are primary two types of revenue for the Company: 1) providing hair salon services, and 2) selling hair salon products. Revenue is recognized at the time the service is performed or the product is delivered. All revenue sources are domestic. In some cases, such as the sale of gift cards, revenue is deferred until the gift card is redeemed.
Deferred Revenue
Deferred revenue arises when customers pay for products and/or services in advance of revenue recognition. Greens deferred revenue consists solely of unearned revenue associated with the purchase of gift certificates for which revenue is recognized only when the service is performed or the product is delivered. As of December 31, 2012 and 2011, deferred revenue was $59,109 and $57,823, respectively.
Advertising
The Company expenses advertising production costs as they are incurred and advertising communication costs the first time the advertising takes place. For the years ended December 31, 2012 and 2011, advertising costs amounted to $93,459 and $96,409, respectively.
Stock-Based Compensation
Green recognizes the cost of employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the fair value of the restricted stock award, option, or purchase right and is recognized as expense, less expected forfeitures, over the requisite service period, which typically equals the vesting period. Because the employee is expected to and has historically received shares of common stock on or about the date of the employee stock option grant date as part of the exercise process, the fair value of each stock issuance is determined using the fair value of Greens common stock on the grant date.
Income Taxes
Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Also, Green's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Green is 100% consolidated into its parent company, Nexia, and therefore does not file an income tax return. Its financial amounts are consolidated into the Nexia income tax returns. As of December 31, 2012 and 2011, a 100% valuation allowance on the deferred tax asset and therefore is not reflected on the balance sheets.
Net Loss Per Share
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the year ended December 31, 2012, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 1,322,583,808 and 638,719,918 such potentially dilutive shares excluded as of December 31, 2012 and 2011, respectively.
Reclassification of Financial Statement Accounts
Certain amounts in the December 31, 2011 financial statements have been reclassified to conform to the presentation in the December 31, 2012 financial statements.
Recent Accounting Pronouncements
Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on Greens consolidated financial position, results of operations or cash flows upon adoption. |
Note 6 - Fair Value Measurements
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
|
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Notes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 6 - Fair Value Measurements | Note 6 Fair Value Measurements
Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of December 31, 2012 and 2011, consisted of the following:
(1) Derivative liability amounts are due to the embedded derivatives of certain convertible notes payable issued by the Company and are calculated using the Black Scholes pricing model (see Note 7 - Derivative liability) |
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