UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number: 000-26973

FOREVERGREEN WORLDWIDE CORPORATION

(Exact name of registrant as specified in its charter)

(801) 655-5500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [X]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]   No [X]

The number of shares outstanding of the registrant’s common stock as of November 12, 2014 was 23,456,951.

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TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

2

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

4

Condensed Consolidated Statements of Cash Flows

5

Notes to the Condensed Consolidated Financial Statements

6

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

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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Item 4.  Controls and Procedures

15

PART II – OTHER INFORMATION

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

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Item 6.  Exhibits

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Signatures

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PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The financial information set forth below with respect to our statements of operations for the three and nine month periods ended September 30, 2014 and 2013 is unaudited.  This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data.  The results of operations for the three and nine month periods ended September 30, 2014 are not necessarily indicative of results to be expected for any subsequent period.  

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

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                                                      ForeverGreen Worldwide Corporation

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

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

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the period ended September 30, 2014 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements as reported in its Form 10-K. The results of operations for the nine-month period ended September 30, 2014 are not necessarily indicative of the operating results for the full year ended December 31, 2014.

NOTE 2 – GOING CONCERN

The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has been operationally profitable for the past five quarters and has incurred operating income during the nine months ended September 30, 2014 of $996,624, but the Company has an accumulated deficit totaling $34,408,370. The ability of the Company to continue as a going concern is dependent on consistently having continued profitable quarters.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements are prepared on the basis of accounting principles generally accepted in the United States of America.

Principles of Consolidation

The consolidated balance sheets and statement of operations at September 30, 2014 include the books of ForeverGreen Worldwide Corporation (Nevada) and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation.

Foreign Currency Translation

The Company’s functional currency is recorded in various currencies, corresponding to the various foreign subsidiaries and its reporting currency is the United States dollar. Management has adopted ASC 830-20, “Foreign Currency Matters – Foreign Currency Transactions.”  All assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. For revenues and expenses, the weighted average exchange rate for the period is used.  Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in other comprehensive loss.

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets for accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term nature of these financial instruments. The carrying amounts reported for notes payable approximate fair value because the underlying instruments are at interest rates which approximate current market rates.

Basic and Diluted Loss Per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Our potentially dilutive shares, which include outstanding common stock options, common stock warrants and convertible debentures, have not been included in the computation of diluted net loss per share attributable to common stockholders for all periods presented, as the results would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share.

Revenue Recognition

Revenues and costs of revenues are recognized during the period in which the products are provided. The Company applies the provisions of FASB Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition in Financial Statements ASC 605-10, which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the SEC. ASC 605-10 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue for sale of products when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

The Company’s source of revenue is from the sale of various food and other natural products. The Company recognizes the sale upon shipment of such goods. The Company offers a 100% satisfaction guarantee against defects for 30 days after the sale of their product except for a few circumstances. The Company extends this return policy to its members for a 30 day period and the consumer has the same return policy in effect against the

member. All conditions of ASC 605-10 are met and the revenue is recorded upon sale, with an estimated allowance for returns where material.

Inventory

Inventory is recorded at the lower of cost or market and valued on a first-in, first-out basis. Inventory consists primarily of consumable food products and ingredients. Food products are discarded as they reach the expiration dates because the food products are made with natural foods containing a minimum of preservatives. Non-food products are reviewed periodically to determine any obsolescence and a reserve is booked when appropriate. The products have expiration dates that range from 3 months on some of the food products to 2 years for non-food products. On September 30, 2014 and December 31, 2013, the reserve for obsolete inventory had balances in the 

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Inventory - continued

amount of $89,050 and $5,660, respectively. This increase of allowance is due to receiving some defective inventory that the Company is trying to return to the vendor.

Accounts Receivable

Accounts receivable arise from doing business with third party distributor centers in various locations throughout South America and Korea. The accounts receivable are made up of fees owed by the distribution centers to the Company for the right to do business in our name. The Company evaluates the need for an allowance for doubtful accounts when it is determined that collection amounts owed is unlikely. No allowance has been recorded at September 30, 2014 compared to an allowance of $29,234 at December 31, 2013.

Members are required to pay for products prior to shipment. Members typically pay for products in cash, by wire transfer or by credit card. Accordingly, the Company seldom carries accounts receivable from members that are not distribution centers and any balances carried would be minimal.

Valuation of Long-lived Assets

In accordance with ASC 360-10, the carrying values of the Company’s long-lived assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that they may not be recoverable. The Company records impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount.  The Company’s assessment of events and circumstances indicated that an analysis for impairment of long-lived assets as of September 30, 2014 was not needed.

Intangible Assets

Intangible assets consist of patent costs, trademark costs and the customer base. Patent costs are costs incurred to develop and file patent applications. Trademark costs are costs incurred to develop and file trademark applications. If the patents or trademarks are approved, the costs are amortized using the straight-line method over the estimated lives of 7 years for patents and 10 years for trademarks. Unsuccessful patent and trademark application costs are expensed at the time the application is denied. Management assesses the carrying values of long-lived assets for impairment when circumstances warrant such a review. In performing this assessment, management considers current market analysis of the technology and future cash flows.

The Company recognizes impairment losses when undiscounted cash flows estimated to be generated from long-lived assets are less than the net carrying amount of intangible assets. No impairment was recognized, accordingly, during the periods ended September 30, 2014 and 2013.

Reclassification of Financial Statement Accounts

Certain amounts in the September 30, 2013 statement of operations and December 31, 2013 balance sheet have been reclassified to conform to the presentation in the September 30, 2014 financial statements. These amounts include cost of sales, sales and marketing, and general and administrative expenses.

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

New Accounting Pronouncements

After evaluating the recent accounting pronouncements through the date of this filing, the Company has concluded that application of these pronouncements will have no material impact on the Company’s financial results.

NOTE 4 – NOTES PAYABLE

Long-term notes payable

Long term liabilities are detailed in the following schedules as of September 30, 2014 and December 2013:

Notes Payable as of September 30, 2014

On December 31, 2013 the Company received $100,000 cash from a non-related party to share in the expenses of recruiting new members.  The amount is due as expenses are reimbursable and bears 0% interest. At September 30, 2014 $0 remained of the $100,000.

On September 30, 2014 the Company converted a convertible note of $394,962 to 1,974,810 shares of common

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FOREVERGREEN WORLDWIDE CORPORATION

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 5 - COMMITMENTS AND CONTINGENCIES

As of December 31, 2013 the Company had recorded a $114,398 liability in accrued expenses for foreign sales tax. On June 4, 2014 this liability was settled and a gain of $114,398 was recorded in the nine months ending September 30, 2014.

NOTE 6 – INVENTORY

Inventories for September 30, 2014 and December 31, 2013 were classified as follows:

NOTE 7 – COMMON STOCK

On September 30, 2014 a third party creditor converted a note payable of $394,962 to 1,978,810 shares of common stock with a conversion price of $.20. On September 30, 2014 the same third party creditor converted accrued interest of $126,920 to 630,000 shares of common stock with a conversion rate of $.20.

NOTE 8 – NEW SUBSIDIARIES

The Company has formed the following wholly-owned subsidiaries, ForeverGreen (HK) Limited in Hong Kong, FG International (India) LLP in India, and ForeverGreen Peru S.A.C. in Peru.  These subsidiaries are wholly-owned by the Company.

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no such events that would have a material impact on the financial statements.

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In this report references to “ForeverGreen,” “the Company,” “we,” “us,” and “our” refer to ForeverGreen Worldwide Corp. and its subsidiaries.

NOTE REGARDING FORWARD LOOKING STATEMENTS

The U.S. Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions.  This report contains these types of statements.  Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

ForeverGreen Worldwide is a holding company which operates through its wholly-owned subsidiary, ForeverGreen International, LLC.  

We intend to maintain our focus as a total lifestyle company, emphasizing our exclusive PowerStrips™, SolarStrips™ and BeautyStrips™ global product offerings. In addition, we intend to provide convenient whole food products for snacks, nutritional support and weight management as well as a strategic mix of essential oils and personal care products in selected markets. PowerStrips currently ship to 174 countries. As our international markets mature, additional products such as FrequenSea™, Pulse-8, and Thunder will be introduced to our most advantageous regions as part of the Build & Buy model, which was first unveiled in October 2014.

The Build & Buy strategy will allow the Company to increase sales of core product brands to new markets. Replicated websites for cross purchasing and cross promotion will continue to offer effective customer growth and retail options. We actively seek relationships with key vendors to continue to innovate and develop new exclusive products for our Members.  

The FGXpress™ brand was introduced in November 2012, featuring the unique and proprietary PowerStrips natural pain relief product. The FGXpress model, also referred to internally as the envelope model, allows each product to be shipped to virtually any mailing address in the world in an envelope. Due to its flexibility and agility, this model continues to attract seasoned network marketing professionals and leaders to our independent distributor (Member) community. PowerStrips™ volume has become the significant revenue driver, with a sales trend averaging 30% growth per month since its launch in 2012.

 Revenue/Income Progression

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The recent global introductions of both SolarStrips and BeautyStrips have been well received by our Members. SolarStrips are an exclusive raw food nutrition breath strip product. The BeautyStrips system consists of a face mask and a serum, both specially developed with proprietary ingredients to enhance the healthy, youthful appearance of skin. SolarStrips, combined with the launch of BeautyStrips in October 2014, are projected to increase sales substantially during Q4 2014.

Key developments this period include several successful Member conferences around the world, including Latin America, Southeast Asia, Japan, Mexico, Europe and India. The Company also invested in monthly ‘fly-in’ events over the last quarter to introduce industry leaders to our products and business opportunity, resulting in measurable upticks in enrollment, sales activity and capital investments from multiple Member-leaders.

Our major challenges for the next twelve months will be to stay responsive to economic conditions and properly manage our systems and regional logistics centers to support the growing demand for our products and business opportunity. Included in this challenge is the need to maintain a high standard of quality, service and Member satisfaction. We continue to expand and train a multi-lingual call center staff at the home office and selected international support hubs. Overcoming periodic economic shifts requires skilled personnel and responsive manufacturing and shipping facilities. Our management team is driving ongoing process improvement initiatives, especially in the areas of production, order fulfillment and worldwide commission payment processing.

To keep pace with our market and product growth, we are actively expanding our international logistics centers, with particular emphasis in Southeast Asia, Hong Kong and Latin America, India and Europe. In Q3, we invested in our international expansion and infrastructure efforts by hiring country managers and presidents to help create a more aggressive presence in these countries.

The rewards of this strategy include increased sales performance and diversified market incomes. International expansion is very expensive and profitability in a given foreign country depends on key Members who can rapidly ramp up their business growth and volume in the target region. These new operating efficiencies address the current economic environment and are preparing the Company for an upturn in demand as people continue to seek out alternative income opportunities.

Liquidity and Capital Resources

During the 2014 nine month period we financed our operations with revenues and $2,000,000 investment capital from the sale of common stock.  At September 30, 2014 we had cash and cash equivalents of $878,427, with a working capital deficit of $1,382,980.  We recognized revenues of $40,544,486 and recorded comprehensive income of $612,124 for the nine month period ended September 30, 2014 (“2014 nine month period”) compared to revenues of $11,495,874 and comprehensive income of $125,254 for the nine month period ended Sept 30, 2013 (“2013 nine month period”).

Based on the results of our operations at December 31, 2013, our independent auditors have expressed an opinion that there is substantial doubt as to our ability to continue as a going concern.  We have been operationally profitable for the past five quarters and have incurred operating income during the nine months ended September 30, 2014 of $839,247, but the Company has an accumulated deficit totaling $34,408,370.  Our ability to continue as a going concern is dependent on consistently having continued profitable quarters.

Management continues to negotiate better costs and terms with our key vendors to lower our cost of goods sold.

New products have been and will continue to be introduced to bolster Member recruiting and product sales.  In addition, management intends to improve our marketing plan to enhance overall profitability.  Our management will continue to scrutinize expenses related to our operating activities and order fulfillment to determine appropriate actions to take to reduce these costs; however, we cannot guarantee that we will be able to return to profitability in the short term.  

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Management anticipates that any future additional capital needed for cash shortfalls will be provided by debt

financing.  We may pay these loans with cash, if available, or convert these loans into common stock.  We may also issue private placements of stock to raise additional funding.  Any private placement likely will rely upon exemptions from registration provided by federal and state securities laws.  The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions.  We also note that if we issue more shares of our common stock then our shareholders may experience dilution in the value per share of their common stock.  

Commitments and Contingent Liabilities

Our total liabilities at September 30, 2014 were $7,165,662, compared to $6,301,037 at December 31, 2013.  This increase is primarily due to the following: (i) a large increase in accrued expenses of $1,216,830, this is due to more and more of our members choosing to use our eWallet commission payment plan which allows the member to leave all or some of what is owed them in a commission payable account.  This allows them to pay for future orders, etc. (ii) a net increase of bank overdraft of $329,317 due to the Company’s continued growth as commissions increase at the same rate as revenues. (iii) A decrease in deferred revenues of $260,378 due to timing of the end of the quarter. (iv) a decrease in convertible notes payable of $394,962 and related accrued interest of $126,920 due to the company converting the note to common stock (v) a decrease in notes payable of $117,220 due to the Company paying off current notes payable. (vi) an increase in accounts payable of $91,037 due to timing of the Company’s weekly accounts payable check run.  

Results of Operations

The following chart summarizes the consolidated financial statements of ForeverGreen Worldwide for the 2014 nine month period and the year ended December 31, 2013.  The consolidated balance sheets and statements of operations includes ForeverGreen Worldwide and its wholly-owned subsidiaries ForeverGreen International, LLC, Productos Naturales Forevergreen Internacional en Mexico S.A. de C.V., FVGR Colombia S.A.S., 3-101-607360 S.A. (a Costa Rican corporation), ForeverGreen Chile SpA, Forevergreen (Aust & NZ) Pty, Ltd, and ForeverGreen Singapore.  The following chart is a summary of our financial statements for those periods and should be read in conjunction with the financial statements, and notes thereto, included with this report at Part I, Item 1, above.

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Our total assets increased to $6,698,154 at September 30, 2014 compared to $2,699,519 at December 31, 2013. The

increase is primarily due to the following:  (i) an increase in cash of $593,686 due to increased revenues and from $2,000,000 in stock issued; (ii) $513,007 is sales booked on September 30, 2014 that were deposited during the period of October 1 to October 3, 2014; (iii) prepaid assets increased by $1,154,658 due to increased prepaid inventory, prepaid events that occurred the in a subsequent period, and prepaid rent for our new headquarter building; (iv) inventory increased by $310,951 to keep up with growing sales; (v) property and equipment increased by $1,457,412 due to management investing in new computer software and hardware, furniture and leasehold improvements for our new headquarter building; (vi) deposits and other assets increased by $267,028 due to management investing in international growth and a security deposit for our new head-quarters building.

Our total liabilities at September 30, 2014 were $7,165,662, compared to $6,301,037 at December 31, 2013.  This increase is primarily due to the following: (i) a large increase in accrued expenses of $1,216,830, this is due to more and more of our members choosing to use our eWallet commission payment plan which allows the member to leave all or some of what is owed them in a commission payable account.  This allows them to pay for future orders, etc. (ii) a net increase of bank overdraft of $329,317 due to the Company’s continued growth as commissions increase at the same rate as revenues. (iii) A decrease in deferred revenues of $260,378 due to timing of the end of the quarter. (iv) a decrease in convertible notes payable of $394,962 and related accrued interest of $126,920 due to the company converting the note to common stock.  (v) a decrease in notes payable of $117,220 due to the Company paying off current notes payable. (vi) an increase in accounts payable of $91,037 due to timing of the Company’s weekly accounts payable check run.  

The following chart summarizes the consolidated financial statements of ForeverGreen Worldwide for the three and nine month periods ended September 30, 2014 and 2013.  The following chart is a summary of our financial statements for those periods and should be read in conjunction with the financial statements, and notes thereto, included with this report at Part I, Item 1, above.

We experienced a 252.7% increase in revenues for the 2014 nine month period over the 2013 nine month period and a 231.3% increase in revenues for the 2014 third quarter over the 2013 third quarter resulting from better than expected revenues from FGX PowerStrips sales, our best selling product, which makes up the majority of the increase in our revenues. Our revenue is also from the sale of various foods, other natural products, member sign ups and kits and freight and handling to deliver products to the members and customers.  We recognize revenue upon shipment of a sales order.

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Gross profits increased in the 2014 interim periods due to increased revenues and reducing our two largest cost of

sales expense, product costs and shipping, as we were able to optimize pricing with our key vendors.  Product costs also decreased because the majority of the Company’s sales were from FGX PowerStrips and the product and shipping costs for that product line are lower than our FGI product lines.

Cost of sales consists primarily of the cost of procuring and packaging products, and the cost of shipping product to our international subsidiaries and warehouses and to our members, plus credit card sales processing fees.  Cost of sales was approximately 21.8 % of revenues for the 2014 nine month period and 27.2% of revenues for the 2013 nine month period and 21.3% for the 2014 third quarter compared to 23.5% of revenues for the 2013 third quarter. The 2014 interim period decrease is primarily due to decreasing our product and shipping costs and the lower costs for our new product, FGX PowerStrips, which comprises a larger amount of sales in 2014.

Total operating expenses increased $30,713,891 for the 2014 nine month period compared to the 2013 nine month period and increased $12,182,523 for the 2014 third quarter compared to the 2013 third quarter period.   The majority of the increase is due to increased sales and marketing expenses related to commissions paid out to our members, the hiring of more employees, and the increase in business operations.

Off-balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Critical Accounting Estimates

Intangible Assets  - The excess of the consideration paid for subsidiaries over the fair value of acquired tangible assets less the fair value of acquired liabilities is assigned to intangible assets.  We rely on an independent third party valuation to ascertain the amount to allocate to identifiable intangible assets, and the useful lives of those assets.  We amortize identifiable intangible assets over their useful life unless that life is determined to be indefinite.  The useful life of an intangible asset that is being amortized is evaluated each reporting period as to whether events and circumstances warrant a revision to the remaining period of amortization.  

We calculated ForeverGreen International’s customer base intangible using a percentage of the gross margin of ForeverGreen International.  We will amortize the customer base over a period of ten years.  

Impairment - We record impairment of long-lived assets to be held and used or to be disposed of when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount. The Company did an annual analysis for the period ended December 31, 2013 and determined no adjustment to long-lived assets was needed. No impairment was recorded during the nine month period ended September 30, 2014.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC.  This information is accumulated to allow timely decisions regarding required disclosure.  Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and concluded that our disclosure controls and procedures were effective.

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Changes to Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).  Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our management has determined that there were no changes made in the implementation of our internal controls over financial reporting during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.  

PART II – OTHER INFORMATION

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 30, 2014 the Company issued 1,622,310 shares of common stock to Maestro Investments, LLC and issued 982,500 shares of common stock to Compass Equity Partners to convert a note payable of $394,962 with accrued interest of $126,920.  All shares were privately issued with a restrictive legend, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.

ITEM 6.  EXHIBITS

Part I Exhibits

Part II Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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