1. Basis of Presentation and Consolidation (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Consolidated Entities

The accompanying consolidated financial statements include the accounts of the following entities, all of which are under common control and ownership:

	State of		Abbreviated
Name of Entity(2)	Incorporation	Relationship(1)	Reference
Epazz, Inc.	Illinois	Parent	Epazz
IntelliSys, Inc.	Wisconsin	Subsidiary	IntelliSys
Professional Resource Management, Inc.	Illinois	Subsidiary	PRMI
Desk Flex, Inc.	Illinois	Subsidiary	DFI
K9 Bytes, Inc.	Illinois	Subsidiary	K9 Bytes
MS Health, Inc.	Illinois	Subsidiary	MS Health

⁽¹⁾All subsidiaries are wholly-owned subsidiaries.

⁽²⁾All entities are in the form of Corporations.

Property and Equipment

Property and Equipment consists of the following at December 31, 2012 and 2011, respectively:

	December 31,			December 31,
	2012			2011
Furniture and fixtures	$	2,187		$	2,187
Computers and equipment		315,572			181,459
Software		70,689			52,325
Assets held under capital leases		134,800			116,945
		523,248			352,916
Less accumulated depreciation and amortization		(326,951	)		(207,323	)
	$	196,297		$	145,593

Estimated Useful Life

Property and Equipment

Furniture and fixtures	5 years
Computers and equipment	3-5 years
Software	3 years
Assets held under capital leases	3-4 years