UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10–Q

(Mark One)

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

For the quarterly period ended June 30, 2015

[ ] 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: 000-55254

Baristas Coffee Company, Inc.
(Exact name of registrant as specified in its charter)

Nevada		20-3118202
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

411 Washington Ave. N., Kent, WA 98032
(Address of principal executive offices)

(800) 988-7735
(Registrant's telephone number, including area code)


(Former name, former address and former fiscal year, if changed since last report)

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 (Check one).

Large accelerated filer [ ]		Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)		Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of July 23, 2015 there were 297,599,374 shares of the issuer's common stock, par value $0.001, outstanding.

BARISTAS COFFEE COMPANY, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015

TABLE OF CONTENTS

			PAGE

PART I – FINANCIAL INFORMATION
	ITEM 1.	FINANCIAL STATEMENTS	3
	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
	ITEM 4.	CONTROLS AND PROCEDURES	23
PART II – OTHER INFORMATION
	ITEM 1.	LEGAL PROCEEDINGS	24
	ITEM 1A.	RISK FACTORS	24
	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24
	ITEM 4.	MINE SAFETY DISCLOSURES	24
	ITEM 5.	OTHER INFORMATION	24
	ITEM 6.	EXHIBITS	25
SIGNATURES			26

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

BARISTAS COFFEE COMPANY, INC.

Condensed Consolidated Balance Sheets


	June 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
Current Assets
Cash	$	-		$	21,471
Accounts receivables		77,309			75,000
Inventory		29,153			29,281
Prepaid expenses		6,180			12,360
Total Current Assets		112,642			138,112
Loans to shareholders		300,000			300,000
Investment in marketable securities		42,920			82,084
Property & equipment, net		209,569			267,068
Intangible assets, net		2,937,568			2,959,193
Other assets		9,950			9,750
TOTAL ASSETS		3,612,649			3,756,207

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank overdraft	$	1,743		$	-
Accounts payable and accrued liabilities		3,665,472			2,895,083
Shareholder loans		602,115			564,115
Notes payable		227,850			286,432
Total Current Liabilities		4,497,180			3,745,630

STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 30,000,000 shares authorized: Series A Preferred Stock, $0.001 par value, 30,000,000 shares authorized, 27,328,358 and 27,328,358 shares issued and outstanding, respectively		27,328			27,328
Common Stock, $0.001 par value, 300,000,000 shares authorized; 299,973,104 and 297,091,258 shares issued, respectively 297,349,374 and 297,091,258 shares outstanding, respectively		299,973			297,091
Additional paid-in capital		9,652,900			9,545,477
Treasury stock, at cost		(74,514	)		-
Accumulated deficit		(10,434,527	)		(7,952,506	)
Accumulated other comprehensive loss		(343,360	)		(1,924,426	)
Total Baristas Coffee Company Inc. stockholders' equity (deficit)		(872,200	)		(7,036	)
Noncontrolling interest		(12,331	)		17,613
Total equity		(884,531	)		10,577
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,612,649		$	3,756,207

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

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BARISTAS COFFEE COMPANY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Revenues	$	322,054		$	297,054		$	654,038		$	615,793
Franchise Fees		-						-
TOTAL REVENUES		322,054			297,054			654,038			615,793

OPERATING EXPENSES
Direct costs		111,680			110,986			230,949			210,603
Compensation		158,389			165,648			305,980			294,908
Depreciation and amortization		39,367			36,613			83,477			77,084
General and administrative		115,762			104,234			229,878			147,030
Professional expenses		27,306			31,859			72,324			43,668
Stock-based compensation		85,825			5,000			205,175			15,000
Total Operating Expenses		538,329			454,340			1,127,783			788,293
OPERATING LOSS		(216,275	)		(157,286	)		(473,745	)		(172,500	)

OTHER (INCOME) EXPENSE
Beneficial conversion fee		80,600			-			202,100			-
Impairment loss on marketable securities		-			-			1,620,230			-
Interest expense (recovery)		175,848			(7,402	)		199,391			78,301
Gain on disposal		-			-			-			(32	)
Loss on loan settlement		(40,853	)		-			(14,683	)		-
Total Other Expenses		215,595			(7,402	)		2,007,038			78,269
LOSS BEFORE INCOME TAXES		(431,870	)		(149,884	)		(2,480,783	)		(250,769	)

Provision for income taxes		-			-			-			-

NET LOSS		(431,870	)		(149,884	)		(2,480,783	)		(250,769	)
Net loss attributable to the noncontrolling interest		14,273			20,968			29,943			44,776
NET LOSS ATTRIBUTABLE TO
THE SHAREHOLDERS OF BARISTAS COFFEE COMPANY INC.		(417,597	)		(128,916	)		(2,450,840	)		(205,993	)

OTHER COMPREHENSIVE INCOME (LOSS)
Impairment of marketable securities		-			-			1,620,230			-
Unrealized gain (loss) on marketable securities		(42,920	)		(82,085	)		(39,164	)		113,094
Other comprehensive income attributable to the noncontrolling interest		-			-			-			-
NET COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE SHAREHOLDERS OF BARISTAS COFFEE COMPANY INC.		(42,920	)		(82,085	)		1,581,066			113,094

NET LOSS AND OTHER COMPREHENSIVE LOSS ATTRIBUTABLE TO THE SHAREHOLDERS OF BARISTAS COFFEE COMPANY INC.		(460,517	)		(211,001	)	$	(869,774	)		(92,899	)

Basic and Diluted Loss per Common Share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Basic and Diluted Weighted Average Common Shares Outstanding		299,286,003			299,738,714			298,987,279			297,818,897

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

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BARISTAS COFFEE COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,			June 30,
	2015			2014

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,450,840	)	$	(205,993	)
Adjustment to reconcile net income to net cash provided by operations:
Beneficial Conversion Fee		202,100			-
Depreciation and amortization		83,477			77,084
Impairment loss on marketable securities		1,620,230			-
Gain on loan settlement		(14,683	)		-
Minority interest in net loss of consolidated entities		(29,943	)		(44,776	)
Stock-based and non-cash compensation		205,175			15,000
Changes in operating assets and liabilities:
Accounts receivable		(2,309	)		-
Inventory		128			(653	)
Prepaid		6,180			-
Other assets		(201	)		-
Accounts payable and accrued liabilities		180,407			125,950
Net cash used in operating activities		(200,279	)		(33,388	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(4,353	)		(161,018	)
Purchase of intangible assets		-			(7,477	)
Net cash used in investing activities		(4,353	)		(168,495	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of preferred stock		-			15,000
Proceeds from issuance of notes payable		102,100			86,915
Repayment on notes payable		(5,682	)		-
Proceeds from issuance of shareholder loans		90,000			22,745
Repayment on shareholder loans		(5,000	)		-
Proceeds from minority interest		-			115,000
Net cash provided by financing activities		181,418			239,660

Net (decrease) increase in cash and cash equivalents		(23,214	)		37,777
Cash and cash equivalents - beginning of period		21,471			-
Cash and cash equivalents - end of period	$	(1,743	)	$	37,777

Supplemental Cash Flow:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Noncash investing and financing activities:
Stocks issued for accrued interest	$	13,193		$	5,017
Notes payable settled by stocks	$	47,000		$	5,000
Shareholder loans settled by stocks	$	155,000		$	120,544

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

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Baristas Coffee Company Inc.

Notes to Interim Consolidated Financial Statements

June 30, 2015

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Baristas Coffee Company, Inc. ("Baristas" "The Company") is a Nevada C Corporation that was originally formed as InfoSpi.com on October 18, 1996. On December 22, 2009, it acquired greater than a 60% interest in Pangea Networks, Inc. ("Pangea")/ DBA Baristas and Inc., and it acquired for cash, stock, and other consideration, numerous coffee stands in the greater Seattle area through the acquisition of Pangea; In May of 2010, the Company changed its name to Baristas Coffee Company, Inc. The Company's fiscal year end is December 31.

Baristas operates a specialty drive-through beverage retailer with attractive female theme-costumed models as servers. Baristas provides its customers the ability of drive up and order their choice of a custom-blended espresso drink, freshly brewed coffee, or other beverages. We generate revenue by offering our patrons the finest hot and cold beverages, specializing in specialty coffees, blended teas and other custom drinks. In addition, we offer smoothies, fresh-baked pastries and other confections.

Basis of Presentation

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company's opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2015 are not necessarily indicative of the results for the full years. While management of the Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the year ended December 31, 2014.

Principles of Consolidation

The consolidated financial statements reflect the financial position and operating results of Baristas and include our 51% investee, Barista Coffee Company of Florida, LLC, as of January 1, 2014. Intercompany transactions and balances have been eliminated.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation for comparative purposes.

Estimates and Assumptions

Preparing 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, liabilities, revenues and expenses. Examples include, but are not limited to, estimates for asset and goodwill impairments, stock-based compensation forfeiture rates, future asset retirement obligations, and inventory reserves; assumptions underlying self-insurance reserves and income from unredeemed stored value cards; and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions.

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Financial Instruments

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At June 30, 2015 and December 31, 2014, the Company had $1,743 cash overdraft and $21,471 cash, respectively.

Accounts Receivables

The Company's accounts receivable consists of trade receivables from franchisee and other trade receivables.

Franchisee Receivable

Franchise fee revenue from an individual franchise sale is recognized, with an appropriate provision for estimated uncollectible amounts, when all material services or conditions relating to the sale have been substantially performed or satisfied by the Company. Continuing franchise fees are reported as revenue as the fees are earned and become receivable from the franchisee.

Allowance for Doubtful Accounts

The Company evaluates the collectability of its accounts receivables on an on-going basis and writes off the amount when it is considered to be uncollectible. At June 30, 2015 and December 31, 2014, the Company does not have an allowance for doubtful accounts.

Marketable Securities

The Company's marketable equity securities have been classified and accounted for as available-for-sale. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations at each balance sheet date. The Company classifies its marketable equity securities as either short-term or long-term based on the nature of each security and its availability for use in current operations. The Company's marketable equity securities are carried at fair value, with the unrealized gains or losses reported as a component of shareholder's equity except impairment.

Adjustments resulting from the change in fair value, included in accumulated other comprehensive income in shareholder's equity, were an impairment loss of $1,620,230 and an unrealized loss of $39,164 for the six months ended June 30, 2015 and an unrealized gain of $113,094 for the six months ended June 30, 2014, respectively.

Fair Value of Financial Instruments

The carrying amount of the Company's cash, accounts receivables, accounts payables and accrued liabilities approximates their estimated fair values due to the short-term maturities of those financial instruments.

The Company has adopted a single definition of fair value, a framework for measuring fair value, and providing expanded disclosures concerning fair value whereby estimated fair value is the price to be paid for an asset or the amount to settle a liability in an orderly transaction between market participants at the measurement date. Accordingly, fair value is a market-based measurement and not an entity-specific measurement.

The Company utilizes the following hierarchy in fair value measurements:

Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

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	As at June 30, 2015 Fair Value Measuring Using
	Carrying Value			Level 1			Level 2		Level 3		Total
Investments in Marketable Securities, available-for-sale		$	42,920		$	42,920		-		-		$	42,920
Total		$	42,920		$	42,920		-		-		$	42,920

	As at December 31, 2014 Fair Value Measuring Using
	Carrying Value			Level 1			Level 2		Level 3		Total
Investments in Marketable Securities, available-for-sale		$	82,084		$	82,084		-		-		$	82,084
Total		$	82,084		$	82,084		-		-		$	82,084

Impairment

The Company assesses at the end of each reporting period whether there is objective evidence that financial assets are impaired. A financial asset is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset that has a negative impact on the estimated future cash flows of the financial asset that can be reliably estimated. The Company recognized $1,620,230 and $0 impairment loss on marketable securities during the periods ended June 30, 2015 and 2014, respectively.

Inventories

Inventories are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost, on a first-in, first-out basis. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As at June 30, 2015 and December 31, 2014 the Company determined that no reserve was required.

Property, Plant and Equipment

Property, plant and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation of property, plant and equipment, which includes assets under capital leases, is provided on the straight-line method over estimated useful lives, generally ranging from 3 to 5 years for equipment and 5 years for buildings. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 5 years. For leases with renewal periods at our option, we generally use the original lease term, excluding renewal option periods, to determine estimated useful lives. If failure to exercise a renewal option imposes an economic penalty to us, we may determine at the inception of the lease that renewal is reasonably assured and include the renewal option period in the determination of the appropriate estimated useful lives. The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.

Goodwill

We test goodwill for impairment on an annual basis, or more frequently if circumstances, such as material deterioration in performance or a significant number of store closures, indicate reporting unit carrying values may exceed their fair values. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than its carrying amount. If we do not perform a qualitative assessment or if the fair value of the reporting unit is not more likely than not greater than its carrying amount, we calculate the implied estimated fair value of the reporting unit. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to the implied estimated fair value. There were no goodwill impairment charges recorded during the periods ended June 30, 2015 and 2014.

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Other Intangible Assets

Definite-lived intangible assets, which mainly consist of acquired rights, trade secrets, trademarks and copyrights, are amortized over their estimated useful lives, and are tested for impairment when facts and circumstances indicate that the carrying values may not be recoverable. There were no other intangible asset impairment charges recorded during the periods ended June 30, 2015 and 2014.

Long-lived Assets

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.

Revenue Recognition

The Company's revenues consist of sales by Company-operated coffee stores and fees from franchised coffee stores operated by conventional franchisees.

Consolidated revenues are presented net of intercompany eliminations for investees controlled by us. Additionally, consolidated revenues are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and rebates. Company-operated stores revenues are recognized when payment is tendered at the point of sale. Company-operated store revenues are reported net of sales, use or other transaction taxes that are collected from customers and remitted to taxing authorities. All revenue is recognized when (i) persuasive evidence of an arrangement exists; (ii) the service or sale is completed; (iii) the price is fixed or determinable; and (iv) the ability to collect is reasonably assured.

Revenues from conventional franchised restaurants include initial fees and royalties based on a percent of sales. Initial fees are recognized upon opening of a restaurant or granting of a new franchise term, which is when the Company has performed substantially all initial services required by the franchise arrangement. Royalties are recognized in the period earned.

The Company recognized $0 initial franchise fees, during the period ended June 30, 2015 and 2014. The Company recognized $1,547 and $0 franchise royalties, during the period ended June 30, 2015 and 2014, respectively.

Marketing & Advertising

Advertising costs are expensed as incurred. Advertising costs totaled $23,370 and $6,822 for the period ended June 30, 2015 and 2014, respectively.

Stock-based Compensation

The Company accounts for employee stock-based compensation to employees, including grants of employee stock options, based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Stock options and warrants issued to consultants and other non-employees are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.

Stock-based expenses to employees and consultants for general and administration services totaled $205,175 and $15,000, for period ended June 30, 2015 and 2014, respectively.

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Income Taxes

The Company uses the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Earnings per Share

Basic earnings per common share equal net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. The Company incurred a net loss for periods ended June 30, 2015 and 2014, respectively and therefore, basic and diluted earnings per share for those periods are the same because all potential common equivalent shares would be anti-dilutive.

As at June 30, 2015, convertible shareholder loans of $602,115, convertible notes payable of $227,850 and 27,328,358 shares of preferred stock were considered to be anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued guidance codified in Accounting Standards Codification ("ASC") 606, "Revenue Recognition - Revenue from Contracts with Customers," which amends the guidance in ASC 605, "Revenue Recognition," and becomes effective beginning January 1, 2017. The Company is currently evaluating the impact of the provisions of ASC 606.

Accounting standards that have been issued by the FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company's financial statements.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As at June 30, 2015, the Company has a loss from operations of $2,450,840 and an accumulated deficit of $10,434,527 The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2015.

The ability of the Company to fully commence its operations is dependent upon, among other things, obtaining additional financing to continue operations, and execution of its business plan. In response to these concerns, management intends to raise additional funds through public or private placement offerings and through loans from officers and directors.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management's plan will be successful.

NOTE 3 – INVENTORY

Inventories were comprised of:

		June 30, 2015				December 31, 2014
Coffee and merchandise held for sale		$	29,153			$	29,281

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NOTE 4 – MARKETABLE SECURITIES

The following tables show the Company's available-for-sale security as of June 30, 2015 and December 31, 2014. The fair value for Reeltime Rentals, Inc ("RLTR") is based on closing market price, less a marketability discount of 0% and 15% as at June 30, 2015 and December 31, 2014, respectively. The fair value of Business Continuity Systems, Inc. (BUCS) is based on a 100% valuation allowance to the market price due to limited information and activity.

During the period ended June 30, 2015, the Company recognized an impairment loss of $1,620,230 on RLTR shares based on the highest price of $0.018 per share, during April 1, 2013 to March 31, 2015.

June 30, 2015

	Cost		Realized Losses		Unrealized Losses		Fair Value
RLTR – 21,460,000 common shares	$	2,006,510	$	1,620,230	$	343,360	$	42,920
BUCS – 2,576,389 common shares		-		-		-		-
Total	$	2,006,510	$	1,620,230	$	343,360	$	42,920

December 31, 2014

	Cost		Realized Losses		Unrealized Losses		Fair Value
RLTR – 21,460,000 common shares	$	2,006,510	$	-	$	1,924,426	$	82,084
BUCS – 2,576,389 common shares		-		-		-		-
Total	$	2,006,510	$	-	$	1,924,426	$	82,084

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET

	June 30, 2015			December 31, 2014
Buildings and leaseholds	$	402,963		$	402,963
Machinery and equipment		219,353			215,000
Computer equipment		17,382			17,382
Furniture and fixtures		19,065			19,065
Property, plant and equipment, gross		658,763			654,410
Less accumulated depreciation		(449,194	)		(387,342
Property, plant and equipment, net	$	209,569		$	267,068

The Company recorded $61,852 and $54,834 depreciation for the periods ended June 30, 2015 and 2014, respectively.

NOTE 6 – INTANGIBLE ASSETS AND GOODWILL

	June 30, 2015			December 31, 2014
Goodwill	$	2,770,651		$	2,770,651
Definite-lived intangibles:
Trademarks		100,000			100,000
Logo		80,000			80,000
Website		27,500			27,500
Policies and procedures		10,000			10,000
Ice cream intangibles		125,000			125,000
		342,500			342,500
Accumulated amortization		(175,583	)		(153,958
Definite-lived intangibles, net		166,917			188,542
Total intangible assets and goodwill	$	2,937,568		$	2,959,193

The Company recorded $21,625 and $22,250 amortization for the periods ended June 30, 2015 and 2014, respectively.

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Goodwill

The intangible assets were purchased along with the hard assets, in December 2009, for $3.5 million in our common stock. After the assets and intangible assets were identified, the remaining $2,770,651 was recorded as goodwill. The Company does not amortize goodwill. Instead, the Company evaluates goodwill annually in the fourth quarter and whenever events or changes in circumstances indicate that it is more likely than not that an impairment loss has been incurred.

As at June 30, 2015 and December 31, 2014, the Company determined that no such impairment existed based on the following financial and non-financial considerations:

·	As at December 31, 2014 the company's market capitalization was approximately $11,000,000 and has historically exceeded goodwill.

·	Management has been actively building brand awareness through obtaining a brand patent, establishing multiple locations, periphery product branding, and development of a pilot TV episode.

·	The Company has signed a franchising agreement that is currently adding additional locations.

·	The Company is expanding into additional product lines and actively developing additional sources of revenues.

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company's accounts payable and accrued liabilities consist of the followings:

	June 30,		December 31,
	2015		2014
Accounts payable	$	87,607	$	73,456
Accrued liabilities		3,220,496		2,453,646
Prepaid gift card		21,762		20,324
Taxes payable		335,607		347,657
	$	3,665,472	$	2,895,083

NOTE 8 – RELATED PARTY TRANSACTIONS

Accounts Payable

Prior to December 31, 2014, he Company granted 60,000,000 shares to two officers of the Company (30,000,000 shares each) for their services with a value of $2,304,000. During the six months ended June 30, 2015, the Company granted 5,000,000 shares to two officers of the Company (2,500,000 shares each) for their services with a value of $170,750. These shares were not yet issued as at June 30, 2015 and the amounts due to these officers were recorded as accrued liabilities.

On April 28, 2015, the Company repurchased 4,000,000 common shares from two officers of the Company (2,000,000 common shares each officer) and returned those shares to treasury. The Company promised to issue 8,000,000 common shares back these two officers (4,000,000 common shares each officer) once the increase in authorized shares is approved. The value of the 4,000,000 common shares repurchased from the officers was $162,000 and recorded as accrued liabilities. The value of the additional 4,000,000 common shares which will be issued to the officers was $162,000 and recorded as interest expenses.

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On June 15, 2015, the Company repurchased 10,000,000 common shares from one of our officers. The Company promised to reissue 10,000,000 common shares to the officer once the increase in authorized shares is approved. The value of the 10,000,000 common shares repurchased from the officer was $284,000 and recorded as accrued liabilities.

Loan Receivable

The Company has a receivable from a related party for services in prior years. Balance of this loan receivable was $300,000 as at June 30, 2015 and December 31, 2014. The Company will evaluate the collectability of the loan quarterly.

Shareholder loans

The Company has issued a number of notes with various maturities dates to related parties for advances. These notes are convertible either at a fixed dollar amount or 50% of market price and accrue interest at an average rate of 8% per annum. Due to the short-term nature of these loans they are recorded as current liabilities. The outstanding balances at June 30, 2015 and December 31, 2014 were $602,115 and $564,115, respectively. The Company plans to pay the loans back as cash flows become available.

During the periods ended June 30, 2015, and 2014, the Company recognized $90,000 and $0 beneficial conversion fee on convertible shareholder loans respectively.

NOTE 9 – NOTE PAYABLE

The Company has issued a number of notes with various maturities dates to unrelated parties. These notes are convertible at a fixed dollar amount and accrue interest at 8% per annum. Due to the short-term nature of these loans they are recorded as current liabilities. The outstanding balances at June 30, 2015 and December 31, 2014 and were $227,850 and $286,432, respectively. During the periods ended June 30, 2015 and 2014, the Company recognized a $112,100 and $0 beneficial conversion fee on convertible loans from un-related parties respectively.

NOTE 10 – STOCKHOLDER'S EQUITY

Preferred Stock

The Company has authorized 30,000,000 preferred shares with a par value of $0.001 per share. Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. The entire 30,000,000 shares of preferred stock were designated to be Series A Convertible Preferred Stock in 2014.

During the year ended December 31, 2014, the Company issued the following shares of Series A Convertible Preferred Stock:

·	300,000 shares to a non-affiliated investor for cash of $15,000.

·	7,965,000 shares to officers and directors for cash of $186,800.

·	11,750,000 shares to officers and director to replace 11,750,000 shares of common stock, which were cancelled.

No preferred shares were issued during the six months ended June 30, 2015.

As at June 30, 2015 and December 31, 2014, there were 27,328,358 shares of Series A Convertible Preferred Stock issued and outstanding.

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Common Stock

The Company has authorized 300,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought. Holders have equal ratable rights to dividends from funds legally available and are entitled to share in assets available for distribution upon liquidation. Holders do not have preemptive, subscriptive, conversion or cumulative voting rights, and there are no redemption or sinking find provisions or rights. Holders of common stock have the right to approve any amendment of the Articles of Incorporation, elect directors, approve any plan of merger and approve a plan for the sale, lease or exchange of all of the Company's assets as proposed by the Board of Directors. There are no restrictions that limit the Company's ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation. The Company is currently seeking to increase the number of shares of common stock to 600,000,000.

During the year ended December 31, 2014, the Company issued the following shares of common stock:

2,650,000 shares in exchange for services and prepaid valued at $147,000.

1,650,000 shares in exchange for advertising and promotion valued at $135,975.

9,307,953 shares in exchange for debt and accrued interest valued at $200,856.

11,750,000 shares of common stock were retired and replaced by 11,750,000 shares of Series A convertible preferred stock.

During the six months ended June 30, 2015, the Company issued the following shares of common stock:

1,881,846 shares in exchange for debt of $20,492 and accrued interest of $1,225.

1,000,000 shares in exchange for services valued at $38,400.

14,000,000 shares were returned to treasury and 11,376,270 shares were re-issued from treasury.

There were 299,973,104 and 297,091,258 common shares issued as at June 30, 2015 and December 31, 2014, respectively. There were 297,349,374 and 297,091,258 common shares outstanding as at June 30, 2015 and December 31, 2014, respectively.

Treasury Stock

Following our Board of Directors authorization, on April 28, 2015, the Company repurchased 4,000,000 common shares from two officers of the Company for an aggregate purchase price of $162,000 and on June 15, 2015, the Company repurchased 10,000,000 common shares from one of our officers for an aggregate purchase price of $284,000. Repurchased shares become a part of treasury stock.

During the six months ended June 30, 2015, the Company reissued the following common shares from treasury:

11,126,270 shares in exchange for debt of $181,508 and accrued interest of $11,968.

250,000 shares in exchange for services valued at $9,600.

Minority Interest

Certain unrelated third parties hold 49% of Baristas Coffee Company of Florida, LLC, a consolidated subsidiary. During the period ended June 30, 2015, the minority interest recognized $29,943 in losses from the operations. During the period ended June 30, 2014, the minority interest contributed $115,000 in equipment and expenses and recognized $44,776 in losses from the operations.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net earnings and other comprehensive income (loss). Accumulated other comprehensive loss reported on our balance sheets consists of unrealized losses on available-for-sale securities.

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	June 30, 2015			December 31, 2014
Accumulated other comprehensive loss, opening balance	$	(1,924,426	)	$	(1,964,556	)
Impairment loss on marketable securities		1,620,230			-
Net unrealized loss on available-for-sale securities		(39,164	)		40,130
Accumulated other comprehensive loss, ending	$	(343,360	)	$	(1,924,426	)

NOTE 11 – NET INCOME (LOSS) PER SHARE OF COMMON STOCK

The Company follows ASC 260, "Earnings per Share," ("EPS") which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS include additional dilution from common stock equivalents, such as convertible notes, preferred stock, stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented. As at June 30, 2015, the Company had $602,115 and $564,115 in convertible shareholder loans, respectively, $227,850 and $286,432 convertible notes payable and respectively, 27,328,358 and 27,328,358 convertible preferred stock issued and outstanding, respectively, which have been omitted from diluted EPS.

The following table sets forth the computation of basic and diluted earnings per share, for the periods ended June 30, 2015 and 2014.

	Six Months Ended June 30,
	2015			2014
Net loss	$	(2,480,783	)	$	(250,769	)
Weighted average common shares outstanding, basic and diluted		298,987,279			297,818,897
Net loss per share, basic and diluted	$	(0.01	)	$	(0.00	)

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Leases

Rental expense under operating lease agreements:

		June 30, 2015				June 30, 2014
Total rentals		$	64,792			$	76,077

Minimum future rental payments under non-cancelable operating leases as of June 30, 2015:

Fiscal Year Ending

2015	$	64,790
2016		120,341
2017		93,131
2018		31,284
Thereafter		-
Total minimum lease payments	$	309,546

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Legal Matters

From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.

NOTE 13 – SUBSEQUENT EVENTS

Subsequent to June 30, 2015, the Company issued 250,000 shares of common stock in exchange for services valued at $9,600.

Management has evaluated subsequent events through the date the financial statements were issued and determined there are no additional items to disclose.

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

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Registration Statement on Form 10-12G/A, as filed on July 24, 2015. You should carefully review the risks described in our Form 10 and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the "Company," "Baristas", "we," "us," or "our" are to Baristas Coffee Company, Inc.

Critical Accounting Policies

We prepare our interim consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the interim consolidated financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our interim consolidated financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our interim consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

Results of Operations

Three Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014

Revenue was $322,054 for the three months ended June 30, 2015 compared to $297,054 for the three months ended June 30, 2014, an increase of $25,000 or 8.42%. The increase was primarily due to increase advertising and promotion done by the Company.

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The changes in our operating expenses are as follows:

	Three Months Ended
	June 30,
	2015		2014		$ Change			% Change
Direct costs	$	111,680	$	110,986	$	694			0.63
Compensation		158,389		165,648		(7,259	)		(4.38	)
Depreciation and amortization		39,367		36,613		2,754			7.52
General and administrative		115,762		104,234		11,528			11.06
Professional expenses		27,306		31,859		(4,553	)		(14.29	)
Stock-based compensation		85,825		5,000		80,825			1,616.50
Total Operating Expenses	$	538,329	$	454,340	$	83,989			18.49

Direct costs for generating sales was $111,680 for the three months ended June 30, 2015 compared to $110,986 in the three months ended June 30, 2014, an increase of 694 or 0.63%. The increase direct costs in three months ended June 30, 2015 was primarily the result of increase of purchases for increased sales.

Compensation was $158,389 for the three months ended June 30, 2015 compared to $165,648 in the three months ended June 30, 2014, a decrease of 7,259 or 4.38%. The decrease compensation in three months ended June 30, 2015 was primarily due to less staff compared to the three months ended June 30, 2014.

Depreciation and amortization expenses for the three months ended June 30, 2015 was $39,367, increased $2,754 or 7.52%, compared to $36,613 in the three months ended June 30, 2014.

General and administrative expenses consisted of expenses covering office, supplies, shipping, telephone, internet insurance, and other general operating costs related to our business. General and administrative expenses was $115,762 for the three months ended June 30, 2015 compared to $104,234 for the three months ended June 30, 2014, an increase of $11,528 or 11.06%. The increase was the result of increase business activities.

Professional expenses was $27,306 for the three months ended June 30, 2015 compared to $31,859 in the three months ended June 30, 2014, a decrease of $4,553 or 14.29%. The Company's professional expenses were primarily used to meet regulatory filing requirements.

Stock-based compensation consisted of $85,825 in stock issued / granted for compensation in the three months ended June 30, 2015, compared to $5,000 in the three months ended June 30, 2014, an increase of $80,825 or 1,616.50%. The increase on stock-based compensation was primarily due to 2,500,000 shares granted to two officers of the Company (1,250,000 shares each) for their services with a value of $62,250.

The changes in our other loss are as follows:

	Three Months Ended
	June 30,
	2015			2014			$ Change			% Change
Beneficial conversion fee	$	80,600		$	-		$	80,600			100.00
Interest expense (recovery)		175,848			(7,402	)		183,250			(2,475.68	)
Loss on loan settlement		(40,853	)		-			(40,853	)		100.00
Total Other Expenses	$	215,595		$	(7,402	)	$	222,997			(3,012.66	)

The Company has issued a number of notes with various maturities dates to related parties for advances. These notes are convertible either at a fixed dollar amount or 50% of market price and accrue interest at an average rate of 8% per annum. During the periods ended June 30, 2015, and 2014, the Company recognized $39,000 and $0 beneficial conversion fee on convertible shareholder loans respectively.

The Company has issued a number of notes with various maturities dates to unrelated parties. These notes are convertible at a fixed dollar amount and accrue interest at 8% per annum. During the periods ended June 30, 2015 and 2014, the Company recognized a $41,600 and $0 beneficial conversion fee on convertible loans from un-related parties respectively.

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During the three months ended June 30, 2015, 289,791 shares valued at $9,592, in exchange for debt of $5,492 and accrued interest of $304, result a $1,696 loss on settlement. During the period ended June 30, 2014, no loans were settled by shares.

During the three months ended June 30, 2015, 11,126,270 shares re-issued from treasury valued at $330,706, in exchange for debt of $181,508 and accrued interest of $11,969, result a $34,157 loss on settlement. During the three months ended June 30, 2014, no loans were settled by shares.

Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014

Revenue was $654,038 for the six months ended June 30, 2015 compared to $615,793 for the six months ended June 30, 2014, an increase of $38,245 or 6.21%. The increase was primarily due to increase advertising and promotion done by the Company.

The changes in our operating expenses are as follows:

	Six Months Ended
	June 30,
	2015		2014		$ Change		% Change
Direct costs	$	230,949	$	210,603	$	20,346		9.66
Compensation		305,980		294,908		11,072		3.75
Depreciation and amortization		83,477		77,084		6,393		8.29
General and administrative		229,878		147,030		82,848		56.35
Professional expenses		72,324		43,668		28,656		65.62
Stock-based compensation		205,175		15,000		190,175		1,267.83
Total Operating Expenses	$	1,127,783	$	788,293	$	339,490		43.07

Direct costs for generating sales was $230,949 for the six months ended June 30, 2015 compared to $210,603 in the six months ended June 30, 2014, an increase of 20,346 or 9.66%. The increase direct costs in six months ended June 30, 2015 was primarily the result of increase of purchases for increased sales.

Compensation was $305,980 for the six months ended June 30, 2015 compared to $294,908 in the six months ended June 30, 2014, a increase of 11,072 or 3.75%. The increase compensation in six months ended June 30, 2015 was primarily due to more staff compared to the six months ended June 30, 2014.

Depreciation and amortization expenses for the six months ended June 30, 2015 was $83,477, increased $6,393 or 8.29%, compared to $77,084 in the six months ended June 30, 2014.

General and administrative expenses consisted of expenses covering office, supplies, shipping, telephone, internet insurance, and other general operating costs related to our business. General and administrative expenses was $229,878 for the six months ended June 30, 2015 compared to $147,030 for the six months ended June 30, 2014, an increase of $82,848 or 56.35%. The increase was the result of increase business activities.

Professional expenses was $72,324 for the six months ended June 30, 2015 compared to $43,668 for the six months ended June 30, 2014, an increase of $28,656 or 65.62%. The Company's professional expenses were primarily used to meet regulatory filing requirements.

Stock-based compensation consisted of $205,175 in stock issued / granted for compensation in the six months ended June 30, 2015, compared to $15,000 in the three months ended June 30, 2014, an increase of $190,175 or 1,267.83%. The increase on stock-based compensation was primarily due to 5,000,000 shares granted to two officers of the Company (2,500,000 shares each) for their services with a value of $170,750.

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The changes in our other loss are as follows:

	Six Months Ended
	June 30,
	2015			2014			$ Change			% Change
Beneficial conversion fee	$	202,100		$	-		$	202,100			100.00
Impairment loss on marketable securities		1,620,230			-			1,620,230			100.00
Interest expense (recovery)		199,391			78,301			121,090			154.65
Gain on disposal		-			(32	)		32			(100.00	)
Loss on loan settlement		(14,683	)		-			(14,683	)		100.00
Total Other Expenses	$	2,007,038		$	78,269		$	1,928,769			2,464.28

The Company has issued a number of notes with various maturities dates to related parties for advances. These notes are convertible either at a fixed dollar amount or 50% of market price and accrue interest at an average rate of 8% per annum. During the six months ended June 30, 2015, and 2014, the Company recognized $90,000 and $0 beneficial conversion fee on convertible shareholder loans respectively.

The Company has issued a number of notes with various maturities dates to unrelated parties. These notes are convertible at a fixed dollar amount and accrue interest at 8% per annum. During the six months ended June 30, 2015 and 2014, the Company recognized $112,100 and $0 beneficial conversion fee on convertible loans from un-related parties respectively.

During the six months ended June 30, 2015, the Company recognized an impairment loss of $1,620,230 on marketable securities based on the highest price of $0.018 per share during April 1, 2013 to March 31, 2015.

During the six months ended June 30, 2015, 1,881,846 shares valued at $66,682, in exchange for debt of $20,492 and accrued interest of $1,224, result a $24,474 gain on settlement. During the six months ended June 30, 2014, no loans were settled by shares.

Liquidity and Capital Resources

The Company's liquidity may be affected by general decrease in revenues during the holiday months and by the need to allocate startup costs for potential expansion.

Baristas forecasts opening ten new franchise locations in addition to maintaining our existing locations, during the next 12 month period. We will receive a franchise fee of $25,000 for each new location ($250,000 in revenue) and anticipate expenses in supporting each new franchise location to be $17,500 ($175,000 in expenses) for an additional net profit of $75,000 before royalties and other revenues. We anticipate hiring an operations manager as franchise sales are closed.

We believe that we do not have enough cash on hand and from operations to operate for the next 12 months. We will require additional financing if we are to complete our expansion plan for the next 12 months. While we are optimistic that we can generate the revenue from new franchise fees and refinancing of our existing properties, we do not have any current financing available to us. If we are unable to generate additional fees through franchising, in order to execute our plan of expansion, we would be required to raise funds through a sale of equities, the issuance of debt or a combination thereof. We have no assurances that we would be successful in raising the requite financing.

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Going Concern

We have a history of operating losses as we have focused our efforts on raising capital and building our brand and expanding our business locations. The report of our independent auditors issued on our consolidated financial statements as of and for the year ended December 31, 2014, expresses substantial doubt about our ability to continue as a going concern. For the period ended June 30, 2015, we were successful in raising net proceeds of $181,418 through debt financing in order to fund the development and growth of our operations. For the period ended June 30, 2014, the Company received $115,000 cash from minority interest, $15,000 proceeds from issuance of preferred stock and $109,660 net proceeds through debt financing. Our ability to continue as a going concern is dependent on our obtaining additional adequate capital to fund additional operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to cease operations.

The following table presents a summary of our net cash provided by (used in) operating, investing and financing activities for the periods ended June 30, 2015 and 2014:

	Six Months Ended
	June 30,
	2015			2014
Net cash used in operating activities	$	(200,279	)	$	(33,388	)
Net cash used in investing activities		(4,353	)		(168,495	)
Net cash provided by financing activities		181,418			239,660
Net (decrease) increase in cash	$	(23,214	)	$	37,777

For the six months ended June 30, 2015, we incurred a net loss of $2,450,840. Net cash used in operating activities was $200,279, net cash used in investing activities was $4,353 and net cash provided by financing activities was $181,418. For the six months ended June 30, 2014, we incurred a net loss of $205,993. Net cash used in operating activities was $33,388, net cash used in investing activities was $168,495 and net cash provided by financing activities was $239,660.

Working Capital Information

The following table presents a summary of our working capital at the end of each period:

	June 30, 2015			December 31, 2014			$ Change			% Change
Cash	$	-		$	21,471		$	(21,471	)		100.00
Current assets		112,642			138,112			(25,470	)		(18.44	)
Current liabilities		4,497,180			3,745,630			751,550			20.06
Working deficit	$	(4,384,538	)	$	(3,607,518	)	$	(777,020	)		21.54

As of June 30, 2015, the Company had a working capital deficit of $4,384,538, compared to $3,607,518 at December 31, 2014, or an increase in working capital deficit of $777,020 (20.06%). As of June 30, 2015, the Company had cash and cash equivalents of $0 as compared to $21,471 on December 31, 2014. For June 30, 2015, current assets decreased $25,470 (18.44%) due to decreases of $21,471 in cash. Current liabilities increased $751,550 (20.06%), with an increase in bank overdraft of $1,743, an increase in accounts payable and accrued expenses of $770,388 (26.61%), an increase in shareholder loans of $38,000 (6.74%), and a decrease in notes payable of $58,582 (20.45%).

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Funding Requirements:

We expect to incur substantial expenses and generate ongoing operating losses for the foreseeable future as we prepare for the ongoing development and launch of our sports bar business, grow the existing base of our coffee store locations and support business and further expand this business into additional facilities and locations. If we are unable to raise an adequate amount of capital, however, we could be forced to curtail or cease operations. Our future capital uses and requirements depend on numerous forward-looking factors.

These factors include the following:

the time and expense needed to complete the successful launch of the sports bar business;

the expense associated with building a network of coffee shops to market the brand;

the degree and speed of developing our franchises with BMOC.

During 2014, we entered joint venture agreements to launch franchises in new states and as well to develop a sports bar. We have yet to achieve profitability as a result of the Company's non-operating expenses, and the issuance of shares of our common stock to third parties for various services rendered. As we grow, the use of our common stock as currency will decline when our cash availability grows.

In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon our continued operations, which in turn is dependent upon our ability to meet our financial requirements, raise additional financing, and the success of our future operations.

Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, if we raise additional funds by issuing equity securities or by selling debt securities, if convertible, further dilution to our existing stockholders would result. To the extent our capital resources are insufficient to meet our future capital requirements, we will need to finance our future cash needs through public or private equity offerings, collaboration agreements, debt financings or licensing arrangements.

If adequate funds are not available, we may be required to terminate, significantly modify or delay the development and launch of our businesses, reduce our planned commercialization efforts, or obtain funds through means that may require us to relinquish certain rights that we might otherwise seek to protect and retain. Further, we may elect to raise additional funds even before we need them if we believe the conditions for raising capital are favorable.

Off-Balance Sheet Arrangements

We do not have 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 that are material to investors.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon those evaluations, management concluded that our disclosure controls and procedures were not effective as of June 30, 2015, in light of the material weaknesses that were found during an assessment of our internal control over financial reporting to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of June 30, 2015.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

ITEM 1A. RISK FACTORS.

As a "smaller reporting company", we are not required to provide the information required by this Item.

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

During the period ended June 30, 2015, the Company issued the following shares of common stock:

1,881,846 shares in exchange for debt of $20,492 and accrued interest of $1,224.

1,000,000 shares in exchange for services valued at $38,400.

Subsequent to June 30, 2015, and through to date of this form, the Company issued the following shares of common stock and preferred stock:

250,000 shares in exchange for services valued at $9,600.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number		Description
31.1*		Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer.
32.1*		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101.INS**		XBRL Instance Document
101.SCH**		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document


*		Filed herewith
**		Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

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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.

		BARISTAS COFFE COMPANY, INC.

Dated: August 13, 2015		/s/ Barry Henthorn
		Barry Henthorn
		Chief Executive Officer
		Principle Executive Officer

Baristas Coffee Company, Inc. 10-Q