CURRENT NOTE PAYABLE

9 Months Ended

Sep. 30, 2011

CURRENT NOTE PAYABLE [Abstract]

CURRENT NOTE PAYABLE

NOTE 6 - CURRENT NOTE PAYABLE

On September 23, 2011, Epazz entered into a six month $25,000 note payable agreement with On Deck Capital.  Payments of $231 are due daily on the loan.  The Company paid total initial fees of $3,322 in connection with the loan, agreed to pay additional fees of $387 per month in servicing fees during the term of the loan and to repay the loan via daily payments of $231.  The total payments due on the loan equate to an annual interest rate of 38%. On September 30, 2011, the balance of this loan is $23,450.

On June 28, 2011, Epazz entered into a nine month $37,500 convertible note payable agreement with Asher Enterprises, Inc. ("Asher").  Principal and interest of 8% is due on March 30, 2012.  On September 30, 2011, the balance of this loan is $37,500.   The convertible note provides Asher the right to convert the outstanding balance (including accrued and unpaid interest) of such convertible note into shares of the Company's common stock at a conversion price equal to 59% of the average of the five lowest trading prices of the Company's common stock during the ten trading days prior to such conversion date, at any time after the expiration of 180 days from the date such convertible note was issued.

On June 28, 2011, the Company sold Asher an additional 8% Convertible Note in the amount of $37,500 on substantially similar terms as the convertible note described above, except that the maturity date of such note was March 30, 2012.

On January 1, 2011, Epazz entered into a nine month $14,400 loan payable agreement with MB Financial.  Payments and interest of 13% are due monthly until the note is paid in full.  On September 30, 2011, the balance of this loan is $1,011.