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18. Subsequent Events
9 Months Ended
Sep. 30, 2014
Subsequent Events [Abstract]  
Subsequent Events

Reverse Stock Split

 

In September 2014, Epazz, Inc.’s (the “Company’s”) majority stockholder and sole director (Shaun Passley) approved a 1:10,000 reverse stock split of the Company’s Class A common stock Effective October 6, 2014, the Company affected the 1:10,000 reverse stock split of its Class A common stock. The Company’s Class B common stock and preferred stock were not affected by the reverse stock split. The Company’s new symbol following the reverse split will be EPAZD. The D will be removed in 20 business days. Following the reverse stock split, the Company has 33,621,390 shares of common stock issued and outstanding and 100,000,000 shares of Class A common stock authorized. The Company’s new CUSIP number is 29413V 309.

 

Forbearance Agreement

In November 2014, Epazz, Inc’s (the “Company’s”) signed a forbearance agreement with St. George Investments, LLC, which changed the outstanding balance to $75,000 with interest accruing at the rate of 8% per annum, compounding daily, based on a 360-day year, commencing on the date. The Company has the right to repay the note at any time.

 

Debt Conversions into Class A Common Stock

On November 3, 2014, the Company issued 1,500,000,000 pre-reverse split shares of Class A Common Stock pursuant to the conversion of $5,994 of convertible debt held by JMJ Financial, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On November 3, 2014, the Company issued 350,000,000 pre-reverse split shares of Class A Common Stock pursuant to the conversion of $1,399 of convertible debt held by JMJ Financial, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On November 10, 2014, the Company issued 2,272,730,000 pre-reverse split shares of Class A Common Stock pursuant to the conversion of $15,000 of convertible debt held by St. George Investments, LLC, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

Issuances of Class A Common Stock for Stock Class Conversion

On October 10, 2014 the Company issued 30,000,000 post reverse split shares of Class A Common to our CEO from a conversion notice from Preferred C.

 

On October 10, 2014 the Company issued 1,500,000 post reverse split shares of Class A Common to Star Financial, a company owned by our CEO’s family member, a related party, from a conversion notice from Preferred C.

 

On October 10, 2014 the Company issued 1,400,000 post reverse split shares of Class A Common to GG Mars Capital., a company owned by our CEO’s family member, a related party, from a conversion notice from Preferred C.

 

Debt Financing, Related Parties,

Originated November 10, 2014, an unsecured $60,000 promissory note payable, including a $12,000 loan origination fee, owed to Star Financial, a corporation owned by an immediate family member of the Company’s CEO. The note carries a 15% interest rate, matures on February 15, 2015. The note also carried a liquidated damages fee of $1,000 upon default.

 

On November 10, 2014 the Company issued 250,000,000 pre reverse split shares of Class A Common Stock to Wellington Shields Holdings, LLC, as a fee for closing on an acquisition. The total fair value of the common stock was $5,000 based on the closing price of the Company’s common stock on the date of grant.