19. Restatement (Tables)

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Restated financial statements

	As Originally Reported						AS RESTATED
	September 30, 2014			Adjustments			September 30, 2014
Assets
Current assets:
Cash	$	71,963		$	–		$	71,963
Accounts receivable, net		256,617			–			256,617
Other current assets		131,392			–			131,392
Total current assets		459,972			–			459,972
Property and equipment, net		115,470			–			115,470
Intangible assets, net		451,391			–			451,391
Goodwill		1,355,361			–			1,355,361
Total assets	$	2,382,194		$	–		$	2,382,194
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Dividends payable	$	–		$	–		$	–
Accounts payable		339,540			–			339,540
Accrued expenses		213,022			–			213,022
Accrued expenses, related parties		–			–			–
Deferred revenue		592,408			–			592,408
Lines of credit		83,260			–			83,260
Current maturities of capital lease obligations payable		7,031			–			7,031
Current maturities of notes payable, related parties ($1,066,073 currently in default)		1,186,618			–			1,186,618
Convertible debts, net of discounts of $131,774 and $105,300, respectively ($60,674 currently in default)		152,275			–			152,275
Current maturities of long term debts		809,177			–			809,177
Derivative Liabilities		–			–			–
Total current liabilities		3,383,331			–			3,383,331
Notes payable, related parties		–			–			–
Convertible debts, net of discounts of $0 and $4,283, respectively		–			–			–
Long term debts, net of current maturities		911,467			–			911,467
Total liabilities		4,294,798			–			4,294,798
Stockholders' equity (deficit):
Convertible preferred stock, Series A, $0.0001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding		–			–			–
Convertible preferred stock, Series B, $0.0001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding		–			–			–
Convertible preferred stock, Series C, $0.0001 par value, 3,000,000,000 shares authorized, 2,932,755,533 shares issued and outstanding		294,372			–			294,372
Common stock, Class A, $0.0001 par value, 9,000,000,000 shares authorized, 37,557,842 and 346,836 shares issued and outstanding, respectively		721,338			–			721,338
Convertible common stock, Class B, $0.0001 par value, 60,000,000 shares authorized, 23,000,000 and 10,500,000 shares issued and outstanding, respectively		2,300			–			2,300
Additional paid in capital		9,290,110			721,207			10,011,317
Stockholders' payable, consisting of 19,000,000 shares of Series C Convertible Preferred Stock and 28,875,000 shares of Class A Common Stock		–						–
Stockholders' receivable, consisting of -0- and 20,000,000 shares of Class A Common Stock, respectively		–			–			–
Accumulated deficit		(12,220,724	)		(721,207	)		(12,941,931	)
Total stockholders' equity (deficit)		(1,912,604	)		–			(1,912,604	)
Total liabilities and stockholders' equity (deficit)	$	2,382,194		$	–		$	2,382,194

EPAZZ, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ending September 30, 2014
	As Originally Reported			Adjustments			As RESTATED
Revenue	$	361,150		$	–		$	361,150
Expenses:
General and administrative		113,308			–			113,308
Salaries and wages		209,667			721,207			930,874
Depreciation and amortization		55,156			–			55,156
Bad debts (recoveries)		30,813			–			30,813
Total operating expenses		408,944			721,207			1,130,151
Net operating loss		(47,794	)		(721,207	)		(769,001	)
Other income (expense):
Interest Income		–			–			–
Interest expense		(194,583	)		–			(194,583	)
Loss on debt modifications, related parties		–			–			–
Other Income / (Expense)		19,251						19,251
Change in derivative liabilities		–			–			–
Total other income (expense)		(175,332	)		–			(175,332	)
Net loss	$	(223,126	)	$	(721,207	)	$	(944,333	)
Weighted average number of common shares outstanding - basic and fully diluted		7,052,068,854			7,052,068,854			7,052,068,854
Net loss per share - basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)

EPAZZ, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Nine Months Ending September 30, 2014
	As Originally Reported			Adjustments			As RESTATED
Revenue	$	941,227		$	–		$	941,227
Expenses:
General and administrative		683,447			–			683,447
Salaries and wages		2,654,666			721,207			3,375,873
Depreciation and amortization		152,711			–			152,711
Bad debts (recoveries)		25,551			–			25,551
Total operating expenses		3,516,375			721,207			4,237,582
Net operating loss		(2,575,148	)		(721,207	)		(3,296,355	)
Other income (expense):
Interest income		55			–			55
Interest expense		(1,212,360	)		–			(1,212,360	)
Loss on debt modifications, related parties		(172,864	)		–			(172,864	)
Other Income / (Expense)		19,251						19,251
Change in derivative liabilities		(777,664	)		–			(777,664	)
Total other income (expense)		(2,143,582	)		–			(2,143,582	)
Net loss	$	(4,718,730	)	$	(721,207	)	$	(5,439,937	)
Weighted average number of common shares outstanding - basic and fully diluted		5,563,139,967			5,563,139,967			5,563,139,967
Net loss per share - basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)

EPAZZ, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	As Originally Reported						As RESTATED
	September 30, 2014			Adjustments			September 30, 2014
Cash flows from operating activities
Net loss	$	(4,718,730	)	$	(721,207	)	$	(5,439,937	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debts (recoveries)		25,551			–			25,551
Depreciation and amortization		41,452			–			41,452
Impairment of intangible assets		111,259			–			111,259
Amortization of deferred financing costs		317,789			–			317,789
Amortization of discounts on convertible debts		495,683			–			495,683
Loss on debt modifications, related parties		172,864			–			172,864
Loss on default provisions of convertible debt		77,375			–			77,375
Change in fair market value of derivative liabilities		777,664			–			777,664
Stock based compensation issued for services		93,056			–			93,056
Stock based compensation issued for services, related parties		2,243,402			721,207			2,964,609
Decrease (increase) in assets:
Accounts receivable		1,130			–			1,130
Other current assets		48,035			–			48,035
Increase (decrease) in liabilities:								–
Accounts payable		(395,307	)		–			(395,307	)
Accrued expenses		81,049			–			81,049
Accrued expenses, related parties		57,450			–			57,450
Deferred revenues		270,277			–			270,277
Net cash provided by (used in) operating activities		(300,001	)		–			(300,001	)
Cash flows from investing activities
Cash acquired in merger		736			–			736
Purchase of equipment		(43,512	)		–			(43,512	)
Acquisition of subsidiaries		(582,945	)		–			(582,945	)
Net cash used in investing activities		(625,721	)		–			(625,721	)
Cash flows from financing activities
Payments on capital lease obligations payable		(10,392	)		–			(10,392	)
Proceeds from notes payable, related parties		774,524			–			774,524
Repayment of notes payable, related parties		(82,879	)		–			(82,879	)
Proceeds from convertible notes		–			–			–
Repayment of convertible notes		(1,500	)		–			(1,500	)
Proceeds from long term debts		582,206			–			582,206
Repayment of long term debts		(472,841	)		–			(472,841	)
Net cash provided by financing activities		789,118			–			789,118
Net increase (decrease) in cash		(136,604	)		–			(136,604	)
Cash - beginning		208,567			–			208,567
Cash - ending	$	71,963		$	–		$	71,963
Supplemental disclosures:
Interest paid		187,563			–			187,563
Income taxes paid		–			–			–
Non-cash investing and financing activities:
Acquisition of subsidiary in exchange for debt	$	611,988		$	–		$	611,988
Value of shares issued for conversion of debt	$	533,360		$	–		$	533,360
Value of shares issued for conversion of debt, related parties	$	112,183		$	–		$	112,183
Shares issued for dividend payable	$	11,000		$	–		$	11,000
Discount on derivatives	$	422,240		$	–		$	422,240
Beneficial conversion feature	$	35,028		$	–		$	35,028
Deferred financing costs	$	391,102		$	–		$	391,102
Value of derivative adjustment due to debt conversions	$	1,199,904		$	–		$	1,199,904
Dividends payable declared	$	–		$	–		$	–