GreenPlex Services, Inc. - Quarter Report: 2014 August (Form 10-Q)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive DataFile 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. (Check one):

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

Yes [  ]  No [X]

Number of shares outstanding of the issuer’s common stock as of October 20, 2014: 36,055,884* shares

(*this figure takes into account a 11-for-1 stock split after the report period which was effectuated on April 15, 2014)

TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

Item1. Financial Statements

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GreenPlex Services, Inc.

August 31, 2014 and 2013

Notes to the Financial Statements

(Unaudited)

Note 1 - Organization and Operations

GreenPlex Services, Inc. (“GreenPlex” or the “Company”) was incorporated on September 2, 2009 under the laws of the State of Nevada for the purpose of serving both residential and commercial customers in the greater Spokane and Coeur d’ Alene area.  Its services include all aspects of lawn care, tree and shrub maintenance, landscape maintenance and a multiphase pest and insect control program.  The Company is committed to a “Green Philosophy” and where feasible, utilizing organic and socially responsible products, such as fertilizer and pesticides.

Note 2 - Significant and Critical Accounting Policies and Practices

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application.  Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.  The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the transitional period ended November 30, 2013 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2014.

Fiscal Year End

On December 21, 2012, the Board of Directors of the Company passed a resolution to change the Company's fiscal year end date from December 31 to November 30, effective upon approval of the majority stockholders, which was ratified by the majority of the stockholders of the Company as part of the proxy vote related to the Company's 2012 Annual meeting, held on December 21, 2012.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material.  The Company’s critical accounting estimates and assumptions affecting the financial statements were:

(i)

Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business;

(ii)

Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of

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the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes.  The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

(iii)

Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance.  Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions.  After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, sales tax payable, and accrued payroll liabilities approximate their fair

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value because of the short maturity of those instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist.  Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets.  The Company’s long-lived assets, which include landscaping equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes.  The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.  The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.

Outstanding account balances are reviewed individually for collectability.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  There was $0 allowance for doubtful accounts at August 31, 2014 or November 30, 2013.

The Company does not have any off-balance-sheet credit exposure to its customers.

Landscaping Equipment

Landscaping equipment is recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. Depreciation of landscaping equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of either three (3) or five (5) years.  Upon sale or retirement of landscaping equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Related Parties

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The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b.  Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.  Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business.  However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.  The disclosures shall include: a. the nature of the relationship(s) involved; b.  description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.  If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.  Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

The Company derives its revenues from sales contracts with customers with revenues being generated when services are rendered.  Persuasive evidence of an arrangement is demonstrated via invoice and service agreement, service rendering is evidenced by a signed service application form by the service technician; the sales price to the customer is fixed upon signing of the service agreement and there is no separate sales rebate, discount, or volume incentive.

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Stock-Based Compensation for Obtaining Employee Services

The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum ("PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

·

Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding.  Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term.  The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

·

Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

·

Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.

·

Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.

The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.

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Income Tax Provision

The Company accounts for income taxes under paragraph 710-10-30-2 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  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 the statements of operations in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”).  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.  Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards.  The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability.  In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years.  If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended August 31, 2014 or November 30, 2013.

Net Income (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.

The following table shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per common share calculation as they were anti-dilutive, as adjusted by the Company’s 11:1 stock split.

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Cash Flows Reporting

The Company has adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-24 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.  The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20.

Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation.

The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.

The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.

In May 2014, the FASB issued the FASB Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”)

This guidance amends the existing FASB Accounting Standards Codification, creating a new Topic 606, Revenue from Contracts with Customer. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

To achieve that core principle, an entity should apply the following steps:

1.

Identify the contract(s) with the customer

2.

Identify the performance obligations in the contract

3.

Determine the transaction price

4.

Allocate the transaction price to the performance obligations in the contract

5.

Recognize revenue when (or as) the entity satisfies a performance obligations

The ASU also provides guidance on disclosures that should be provided to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue recognition and cash flows arising from contracts with customers.  Qualitative and quantitative information is required about the following:

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1.

Contracts with customers – including revenue and impairments recognized, disaggregation of revenue, and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations)

2.

Significant judgments and changes in judgments – determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations

3.

Assets recognized from the costs to obtain or fulfill a contract.

ASU 2014-09 is effective for periods beginning after December 15, 2016, including interim reporting periods within that reporting period for all public entities.  Early application is not permitted.

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.

The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.

Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments.

The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage.

The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

The company has limited operations and is considered to be in the development stage. The Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

In June 2014, the FASB issued the FASB Accounting Standards Update No. 2014-12 “Compensation—Stock Compensation (Topic 718) : Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”).

The amendments clarify the proper method of accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period.  The Update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be

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achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered.

The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015.  Earlier adoption is permitted.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Note 3 – Going Concern

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had an accumulated deficit at August 31, 2014, and had a net loss and net cash used in operating activities for reporting period then ended.  These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company is attempting to generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations.  While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds.

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

Note 4 – Landscaping Equipment

(i)

Impairment Test

The Company completed its annual impairment testing of landscaping equipment and determined that there was no impairment as the fair value of its landscaping equipment, substantially exceeded their carrying values at November 30, 2013.

(ii)

Depreciation Expense

Depreciation expense was $3,277 and $3,140 for the reporting period ended August 31, 2014 and 2013, respectively.

Note 5 - Notes Receivable

On June 17, 2014, the Company entered into a definitive agreement with C.S. Analytics LLC and executed a one year promissory note relating to a loan from Greenplex to C.S. Analytics LLC in the amount of $20,000 at 8% interest per annum.  

Note 6 - Other Assets - Joint Venture Investment

On March 25, 2014, GreenPlex entered into an Option to Joint Venture agreement with C.S. Analytics LLC, pursuant to which GreenPlex agreed to contribute a total of One Million Five Hundred Thousand Dollars as its capital contribution to a fifty-fifty joint venture to be organized and referred to as the CannaSafe-Greenplex LLC.  The purpose of the Joint Venture is to operate a cannabis testing facility in Pullman, Washington, and to expand to other states.  C.S. Analytics, LLC is based in Temecula, California and is the only ISO/IEC 17925-2005 accredited cannabinoid profiling laboratory in the United States.  C.A. Analytics, LLC is accredited in accordance with the recognized International Standard ISO/IEC 17025-2005 and this accreditation demonstrates technical competence for a defined scope and operation of a laboratory quality management system.  The option agreement calls for the contributions to be made in two $750,000 increments by Greenplex prior to August 24, 2014.  The first contribution is to be made on or before July 31, 2014.  Upon formation of CannaSafe-Greenplex LLC, CannaSafe will contribute certain business assets, know-how, diagnostic testing know-how and proprietary intellectual property to the CannaSafe-Greenplex LLC joint venture.  GreenPlex paid a $50,000 option fee with regard to the original option agreement.  As a consideration for extending the Option to Joint Venture first

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contribution deadline to October 1, 2014, Greenplex agreed to pay CannaSafe Analytics LLC an additional $160,000 as a non-refundable deposit.  As of August 31, 2014, Greenplex paid $130,000 to CannaSafe Analytics LLC and in September 2014, Greenplex paid $80,000 to CannaSafe Analytics LLC as non-refundable deposit.

An aggregate of $210,000 in option fees have been paid by GreenPlex, which is creditable towards the first tranche of capital contribution due from GreenPlex at the closing of the Joint Venture.  The Option has been extended and expires October 31, 2014.

Note 7 - Notes Payable

On February 26, 2013, a note payable was signed with a third-party for the principal amount of $3,000 with no interest thereon and a maturity date of December 31, 2013.

On March 22, 2013, a note payable was signed with a third-party for the principal amount of $3,000 with no interest thereon and a maturity date of December 31, 2013.

On May 16, 2013, a note payable was signed with a third-party for the principal amount of $700 with no interest thereon and a maturity date of December 31, 2013.

On May 17, 2013, a note payable was signed with a third-party for the principal amount of $500 with no interest thereon and a maturity date of December 31, 2013.

On May 23, 2013, a note payable was signed with a third-party for the principal amount of $500 with no interest thereon and a maturity date of December 31, 2013.

On June 17, 2013, a note payable was signed with a third-party for the principal amount of $1,300 with no interest thereon and a maturity date of December 31, 2013.  

On July 22, 2013, a note payable was signed with a third-party for the principal amount of $2,000 with no interest thereon and a maturity date of December 31, 2013.  

On August 30, 2013, note holders with notes issued between February 26, 2013 and July 22, 2013 converted their notes, in aggregate, of $11,000 into common shares of stock at $0.0036 per share.  A total of 3,025,000 shares were issued in exchange for the notes.

On January 31, 2014, a note payable was signed with a third-party for the principal amount of $1,600 with no interest thereon and a maturity date of January 31, 2015. $1,200 was repaid in cash on February 20, 2014. $400 was repaid on April 10, 2014

On February 7, 2014, a note payable was signed with a third-party for the principal amount of $4,000 with no interest thereon and a maturity date of February 7, 2015.

On March 7, 2014, a note payable was signed with a third-party for the principal amount of $1,000 with no interest thereon and a maturity date of March 7, 2015.  

On March 19, 2014, a creditor of the Company that had outstanding loans due to them agreed to convert their loans due plus any accrued interest into common shares of stock at a conversion rate of $0.0068 per share.  The total outstanding loans in aggregate were $5,000 and the aggregate interest accrued was $0.  A total of 733,337 shares in aggregate were issued in exchange for the loans due.

On April 8, 2014, the Company entered into a definitive agreement with an unaffiliated accredited entity and executed a convertible promissory note relating to a loan in the amount of $75,000 at 8% interest per annum due December 31, 2014.  The note's principal and interest are convertible at any time for common stock at the price of $0.027 per share, as adjusted by the Company’s 11:1 stock split.

On June 10, 2014, a note payable was signed with a third-party for the principal amount of $1,200 with no interest thereon and a maturity date of December 31, 2014.

On June 17, 2014, the Company entered into a definitive agreement with an unaffiliated accredited investor and executed a one year convertible promissory note relating to a loan in the amount of $75,000 at 8% interest per annum.  The note's

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principal and interest are convertible at any time for common stock at the price of $0.15 per share and Two Hundred Fifty Thousand (250,000) stock purchase warrants that are exercisable at $.60 per share for a period of three years after issuance.  The Warrants are callable at the option of GreenPlex for $0.001 per Warrant at any time after June 30, 2015 when the Common Stock trades at an average closing sales price of $0.75 or more for a period of 20 consecutive trading days, subject to the common stock underlying the warrants being registered with the Securities and Exchange Commission.

On July 14, 2014, a note payable was signed with a third-party for the principal amount of $1,500 with no interest thereon and a maturity date of December 31, 2014.  $1,250 was paid back on August 21, 2014 and the balance remaining at August 31, 2014 was $250.

Note 8 – Related Party Transactions

Due to Related Party - Director

On March 25, 2014, the Company entered into a definitive agreement with Mr. Manuel Graiwer and executed a ninety day promissory note relating to a loan in the amount of $60,000 at 6% interest per annum.  The due date of this was extended to December 31, 2014.  This individual became a director of the company and an affiliate on April 30, 2014.  As a consideration of the loan, Greenplex issued a three years stock purchase warrant to purchase 550,000 shares of restricted common stock at $0.009 per share, as adjusted by the Company’s 11:1 stock split.

Note 9 – Stockholders’ Deficit

Shares Authorized

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Seventy Five Million (75,000,000) shares of Common Stock, par value $0.001 per share.

Issuance of Common Stock

On April 5, 2012, the Company sold 2,200,000 shares of its restricted common stock, to one non-affiliated investor at $0.0045 per share for $10,000 in cash.

On December 31, 2012, four (4) note holders converted all of the principal balance of their outstanding notes and related accrued interest, totaling $20,491, into common shares of the Company at $0.0036 per share for an aggregate of 5,635,047 shares.

On December 31, 2012, the Chief Executive Officer converted the entire balances of his advances to the Company of $3,800 into common shares of the Company at $0.0036 per share for an aggregate of 1,045,000 shares.

On August 16, 2013, the Company entered into a definitive agreement relating to the private placement of $1,000 of its securities through the sale of 275,000 shares of its common stock at $0.0036 per share to an investor.

On August 30, 2013, the Company entered into a definitive agreement relating to the private placement of $1,000 of its securities through the sale of 275,000 shares of its common stock at $0.0036 per share to an investor.

On August 30, 2013, note holders converted their notes, in the aggregate amount of $11,000 into common shares of stock at $0.0036 per share.  A total of 3,025,000 shares in aggregate were issued in exchange for the notes.

On September 30, 2013, the Company entered into a definitive agreement relating to the private placement of $5,000 of its securities through the sale of 1,375,000 shares of its common stock at $0.0036 per share to an investor.

On March 11, 2014, the Company entered into a definitive agreement relating to the private placement of $7,500 of its securities through the sale of 1,100,000 shares of its common stock at $0.0068 per share to an investor.

On April 15, 2014, the Board of Directors of the Company approved a 11:1 stock split of the Company's issued and outstanding shares of common stock.

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All shares and per share amounts in the financial statements have been adjusted to give retroactive effect to the 11:1 Stock Split.

In August 2014, the Company entered into a four definitive agreement relating to the private placement of $110,000 of its securities through the sale of 733,333 shares of its common stock at $0.15 per share to an investor.  Also issued as consideration for the investment were 366,666 three year callable warrants exercisable at $.60 per share.  If at any time after a year the common stock of the Company trades and closes at a price of more than $.75 per share (as adjusted for share splits, recapitalizations or other similar adjustments) for more than 20 consecutive trading days and the resale of the Warrant Stock is covered by a then-current registration statement, then any outstanding Warrants shall become callable, in whole or in part, at $.01 at the discretion of the Company, upon ten (10) days prior written notice (the “Notice Period”) given to the Holder within five business days immediately following the end of such twenty (20) trading day period.

Stock Options

The Company’s board of directors approved the adoption of the “Non-Qualified Stock Option and Stock Appreciation Rights Plan” by unanimous consent on September 4, 2009 (“2009 Stock Option Plan”).  This plan was initiated to encourage and enable officers, directors, consultants, advisors and other key employees of the Company to acquire and retain a proprietary interest in the Company by ownership of its common stock.  1,000,000 shares of the Company’s common stock were authorized under the 2009 Stock Option Plan.

The Board of Directors did not grant the issuance of any non-statutory stock options from the Company’s Non-Qualified Stock Option Plan for the reporting period ended August 31, 2014 or 2013.

Warrants

Warrants Issued for Consulting Services

On March 3, 2014, the Company entered into a definitive consulting agreement relating to the use of services from IWJ Consulting Group, LLC ("Consultant").  Due to the Company’s lack of operating success since its inception, the Board of Directors authorized retaining a consultant to assist in identifying and screening possible private companies: 1) to be acquired by the Company for stock; 2) to be merged with the Company by an exchange of stock; or 3) to be willing to sell operating assets to the company for stock.  The Company has entered into a 90 day agreement with the Consultant whereby the Consultant has agreed to cover their own out-of-pocket expenses in regards to this objective and they will be compensated by the issuance of a two-year option to purchase up to 5,500,000 shares of restricted common stock at $.0036 per share, the current market value, predicated on the Consultant being successful and the Company completing a transaction.  The Company valued these warrants issued at $24,870 on March 25, 2014, the date of grant using the Black-Scholes Option Pricing Model, and recorded the fair value of warrants of $24,870 as additional paid-in capital.

The fair value of each warrant grant estimated on the date of grant uses the Black-Scholes option-pricing model with the following assumptions:

Warrants Issued in connection with Note

On March 25, 2014, the Company entered into a definitive agreement with Manuel Graiwer and executed a ninety day promissory note relating to a loan in the amount of $60,000 at 6% interest per annum.  This individual became a director of the company and an affiliate on April 30, 2014.  As a consideration of the loan, the Company has issued a three years stock purchase warrant to purchase 550,000 shares of restricted common stock at $0.009 per share.  The Company valued these warrants issued at $2,100 on the date of grant using the Black-Scholes Option Pricing Model, and recorded the fair value of warrants of $2,100 as additional paid-in capital.

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The fair value of each warrant grant estimated on the date of grant uses the Black-Scholes option-pricing model with the following assumptions:

Warrants Issued with Common Shares

In August 2014, the Company entered into definitive stock purchase agreements with four individuals totaling $110,000.  As a consideration of the stock purchases, the Company has issued three years callable stock purchase warrants to purchase 366,666 shares of restricted common stock at $0.60 per share.  The Company valued these warrants issued at $47 on the date of grant using the Black-Scholes Option Pricing Model, and recorded the fair value of warrants of $47 as additional paid-in capital.

The fair value of each warrant grant estimated on the date of grant uses the Black-Scholes option-pricing model with the following assumptions:

Summary of the Company’s Warrant Activities

The table below summarizes the Company’s warrant activities:

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The following table summarizes information concerning outstanding and exercisable warrants as of August 31, 2014:

Note 10 - Commitment and Contingency

On March 3, 2014, the Company entered into a definitive consulting agreement relating to the use of services from IWJ Consulting Group, LLC ("Consultant").  Due to the Company’s lack of operating success since its inception, the Board of Directors authorized retaining a consultant to assist in identifying and screening possible private companies: 1) to be acquired by the Company for stock; 2) to be merged with the Company by an exchange of stock; or 3) to be willing to sell operating assets to the company for stock.  The Company entered into a 90 day agreement with the Consultant whereby the Consultant has agreed to cover their own out-of-pocket expenses in regards to this objective and they were compensated by the issuance of a two-year option to purchase up to 5,500,000 shares of restricted common stock at $.0036 per share, as adjusted by the Company’s 11:1 stock split, for the Company successfully entering an Option to Enter Into a Joint Venture agreement with C.S. Analytics, LLC.

Note 11 – Subsequent Events

The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.  The Management of the Company determined that there were certain reportable subsequent events to be disclosed as followed:

In September 2014, the Company entered into a five definitive agreement relating to the private placement of an aggregate of $100,000 of its securities through the sale of 666,666 shares of its common stock at $0.15 per share to an investor.  Also issued as consideration for the investment were 333,333 three year warrants exercisable at $.60 per share.  If at any time after a year, the common stock of the Company trades and closes at a price of more than $.75 per share (as adjusted for share splits, recapitalizations or other similar adjustments) for more than 20 consecutive trading days and the resale of the Warrant Stock is covered by a then-current registration statement, then any outstanding Warrants shall become callable, in whole or in part, at $.01 at the discretion of the Company, upon ten (10) days prior written notice (the “Notice Period”) given to the Holder within five business days immediately following the end of such twenty (20) trading day period.

Per a six month consulting agreement with Uptick Capital, LLC, entered into on September 2, 2014, 100,000 common shares for services was issued to them on September 16, 2014, and twenty five thousand dollars worth of restricted shares will be issued to them per month based on the average closing price of the last three days of the prior month.

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

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVES A HIGH DEGREE OF RISK AND UNCERTAINTY. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACTS, INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS FORM 10-Q ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, WHEN USED IN THIS DOCUMENT, THE WORDS “ANTICIPATE,” “ESTIMATE,” “PROJECT,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS DUE TO RISKS AND UNCERTAINTIES THAT EXIST IN OUR OPERATIONS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS INCLUDING AMONG OTHERS, THE RISK THAT OUR PRODUCT DEVELOPMENT PROGRAMS WILL NOT PROVE SUCCESSFUL, THAT WE WILL NOT BE ABLE TO OBTAIN FINANCING TO COMPLETE ANY FUTURE PRODUCT DEVELOPMENT, THAT OUR PRODUCTS WILL NOT PROVE COMPETITVE IN THEIR MARKETS. THESE RISKS AND OTHERS ARE MORE FULLY DESCRIBED IN OUR ANNUAL REPORT ON FORM 10-K FOR THE ELEVEN MONTHS ENDED NOVEMBER 30, 2013.  SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR PROJECTED.

ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS INCLUDED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GIVE ANY ASSURANCES THAT THESE EXPECTATIONS WILL PROVE TO BE CORRECT. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

The following discussion should be read in conjunction with the condensed Financial Statements and the Notes included in Item 1 of Part I in this Quarterly Report on Form 10-Q, the audited Financial Statements and Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the most recently filed Annual Report on Form 10-K for the eleven months ended November 30, 2013.

General

GreenPlex Services, Inc. (“GreenPlex”, "we", or "us”) was organized under the laws of the State of Nevada on September 2, 2009.  Greenplex was organized for the express purpose of providing landscape and exterior property management services and product sales to residential, industrial, and commercial customers throughout areas of Western Washington State and Northern Idaho.  Our services include all aspects of lawn care, tree and shrub installation and maintenance, landscape creation and maintenance, consumer greenhouse and compost center setup, synthetic grass installation, wildfire risk assessment, and a multiphase pest and insect control program.  We are committed to a “Green Philosophy” and where feasible we utilize organic, non-toxic, and socially responsible products, such as fertilizers and pesticides.  In the event our business model is successful, we plan to undertake in the future a franchise opportunity program after a feasibility evaluation, according to our business plan, is completed and found to be reasonable.

Greenplex is looking at options to move into the laboratory testing of Cannabis industry and on March 25, 2014, Greenplex entered into an Option to Joint Venture agreement with C.S. Analytics LLC ("Cannasafe"), pursuant to which Greenplex Services, Inc. agreed to contribute a total of One Million Five Hundred Thousand Dollars as its capital contribution to a fifty-fifty joint venture to be organized and referred to as the CannaSafe-Greenplex LLC.  The option agreement calls for the contributions to be made in two $750,000 increments by Greenplex prior to August 24, 2014.  The first contribution is to be made on or before July 31, 2014.  Upon formation of CannaSafe-Greenplex LLC, CannaSafe will contribute certain business assets, know-how, diagnostic testing know-how and proprietary intellectual property to the CannaSafe-Greenplex LLC joint venture.  As a consideration for entering into the Option to Joint Venture and extending it, Greenplex paid C.S. Analytics LLC $100,000 as a non-refundable deposit.  C.S. Analytics LLC is based in Temecula, California and is the only ISO/IEC 17925-2005 accredited cannabinoid profiling laboratory in the United States.  CannaSafe is accredited in accordance with the recognized International Standard ISO/IEC 17025-2005 and this accreditation demonstrates technical competence for a defined scope and operation of a laboratory quality management system.

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We have launched a July 2014 private placement offering to raise $1.5 million to complete the joint venture with Cannasafe.

As a consideration for extending the Option to Joint Venture first contribution deadline to October 1, 2014, Greenplex agreed to pay CannaSafe Analytics LLC an additional $160,00 as a non-refundable deposit.  On June 17, 2014, the Company entered into a definitive agreement with C.S. Analytics LLC and executed a one year promissory note relating to a loan from Greenplex to C.S. Analytics LLC in the amount of $20,000 at 8% interest per annum.  An aggregate of $210,000 in option fees have been paid by GreenPlex, plus a loan in the amount of $20,000, for a total of $230,000 which is creditable towards the first tranche of capital contribution due from GreenPlex at the closing of the Joint Venture.  The Option has been extended and expires October 31, 2014.

On May 21, 2014, Greenplex Services, Inc. entered into a preliminary Product Research and Development Agreement with Botanical Extractor Research Group LLC, (“BERG”), a Limited Liability Company organized in the state of Washington.  A botanical extractor is a device that utilizes one or more techniques to extract cannabinoids and other active ingredients from by-products, waste and trim derived from a marijuana plants after they have been harvested.  The agreement is subject to Greenplex securing additional funding of at least $1.8 million.  The objectives of the Agreement are to undertake research on a variety of potentially new extractor designs, different extraction methodologies and investigating the possible utilization of different organic or inorganic media as solvents.  Greenplex will provide funding for the research program on an hourly basis and any new technology, scientific advancement, innovative equipment designs, or new products resulting from work by BERG will become the property of Greenplex.  Any product developed by Botanical Extractor Research Group LLC pursuant to the contract with Greenplex is subject to a royalty equal to three percent (3%) of the net selling price.

Material Changes in Results of Operations

Since GreenPlex Services, Inc. was formed on September 2, 2009, we have earned minimal revenues of $222,662 from sales of services.  Revenues of $24,173 were earned for the nine months ended August 31, 2014, as compared to $31,187 for the eight months ended August 31, 2013.  The decreased revenue in the recent period was due to having only one employee and having less clients than the previous period.  We expect the revenue to stay the same through the period ending November 30, 2014.

For the nine months ended August 31, 2014, we incurred $76,126 in general and administrative expenses, $3,277 in depreciation, $139,138 in professional fees, and $19,033 in payroll expenses, compared to the eight months ended August 31, 2013 where we incurred $8,127 in general and administrative expenses, $3,140 in depreciation, $12,492 in professional fees, and $22,451 in payroll expenses.  The increase in operating expenses was due mainly to increased professional fees and general and administrative expenses.  Professional fees substantially increased due to the company engaging in a private placement and new business exploration in the cannabis sector.  We expect an increase in future payroll for the three months ended November 30, 2014 due to hiring a second employee.  We expect our general and administrative expenses to increase in future periods due to the costs associated with engaging in a private placement and new business pursuits.  Increases are possible if more clients are serviced because of higher fuel, supply, and waste dumping costs.  We expect the 2014 year end professional fees to increase in future periods from the proposed change in business direction.

We have spent no time or financial resources on product research and development during the last two fiscal years of operation.  GreenPlex was formed primarily as a service related company to prove a business concept that can possibly be franchised in the future.  Greenplex is looking at options to move into the laboratory testing of the Cannabis industry.

Material Changes to Financial Condition

We have financed our operations primarily from the proceeds from private placements of our common stock, the issuance of promissory notes, and revenue from our operations.

As of August 31, 2014, we had $51,474 in cash and $14,060 in accounts receivable.  We do not have any available lines of credit.  Since inception we have financed our operations from private placements of equity securities.  Our recent cash burn rate in our operations over the nine months ended August 31, 2014 has been approximately $16,000 per month.  We expect that that cash burn rate will increase substantially as we explore the option to move into the testing of Cannabis industry, per our Option to Joint Venture Agreement.  Given this recent rate of use of cash in our operations, we do not have sufficient capital to carry on operations past October 2014.  Our long term capital requirements and the adequacy of our available funds will depend on many factors, including the reporting company costs, public relations fees, and

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operating expenses, among others.  If we are unable to raise additional capital, generate sufficient revenue, or receive loans from the officers on an as needed basis, we will have to curtail or cease our operations.  We are planning to have a private placement offering soon to raise funds to complete the joint venture with Cannasafe.

Net cash used in operating activities for the nine months ended August 31, 2014 was $135,975.  Seasonal monthly financial commitments of the company include salary to the General Manager of $3,000, and $200 to the General Manager for use of his truck for company business.

Net cash provided from financing activities for the nine months ended August 31, 2014, was $333,950 from short term loans and  stock sales.

On June 10, 2014, a note payable was signed with a third-party for the principal amount of $1,200 with no interest thereon and a maturity date of December 31, 2014.

On June 17, 2014, the Company entered into a definitive agreement with an unaffiliated accredited investor and executed a one year convertible promissory note relating to a loan in the amount of $75,000 at 8% interest per annum.  The note's principal and interest are convertible at any time for common stock at the price of $0.15 per share and Two Hundred Fifty Thousand (250,000) stock purchase warrants that are exercisable at $.60 per share for a period of three years after issuance.  The Warrants are callable at the option of GreenPlex for $0.001 per Warrant at any time after June 30, 2015 when the Common Stock trades at an average closing sales price of $0.75 or more for a period of 20 consecutive trading days, subject to the common stock underlying the warrants being registered with the Securities and Exchange Commission.

On July 14, 2014, a note payable was signed with a third-party for the principal amount of $1,500 with no interest thereon and a maturity date of December 31, 2014.  $1,250 was paid back on August 21, 2014 and the balance remaining at August 31, 2014 was $250.

In August 2014, the Company entered into definitive stock purchase agreements with four individuals totaling $110,000.  As a consideration of the stock purchases, the Company has issued three years callable stock purchase warrants to purchase 366,666 shares of restricted common stock at $0.60 per share

Subsequent Events

In September 2014, the Company entered into a five definitive agreement relating to the private placement of an aggregate of $100,000 of its securities through the sale of 666,666 shares of its common stock at $0.15 per share to an investor.  Also issued as consideration for the investment were 333,333 three year warrants exercisable at $.60 per share.  If at any time after a year, the common stock of the Company trades and closes at a price of more than $.75 per share (as adjusted for share splits, recapitalizations or other similar adjustments) for more than 20 consecutive trading days and the resale of the Warrant Stock is covered by a then-current registration statement, then any outstanding Warrants shall become callable, in whole or in part, at $.01 at the discretion of the Company, upon ten (10) days prior written notice (the “Notice Period”) given to the Holder within five business days immediately following the end of such twenty (20) trading day period.

Per a six month consulting agreement with Uptick Capital, LLC, entered into on September 2, 2014, 100,000 common shares for services was issued to them on September 16, 2014, and twenty five thousand dollars worth of restricted shares will be issued to them per month based on the average closing price of the last three days of the prior month.

Critical Accounting Policies and Estimates

See Notes to the Financial Statements.

Recently Issued Accounting Pronouncements

Refer to Note 2 in the accompanying financial statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not required

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Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of August 31, 2014.  Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were ineffective as of August 31, 2014.

Changes in Internal Control Over Financial Reporting

As of August 31, 2014, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended August 31, 2014 that materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.

None.

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  Mine Safety Disclosure

Not Applicable

Item 5.  Other Information

None.

Item 6.  Exhibits 

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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