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NOTES PAYABLE - Note 10

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

NOTES PAYABLE - Note 10

NOTE 10 - NOTES PAYABLE

As of March 31, 2014 and December 31, 2013, the Company's notes payable consisted of the following:

			March 31,			December 31,
			2014			2013
			(Unaudited)
Former Executives of Nollec		$	145,000		$	145,000
The Cellular Network Communications Group, Inc.			205,937			205,937
Total		$	350,937		$	350,937

There was a note owed to the former executives of Nollec that was an incentive for key managers to remain with the Nollec after Zoom acquired it in 2010. The note neither bears interest nor is collateralized by any assets.

The Note due to CNCG carries an annual interest rate of 8.00% to be made in quarterly installments of $43,708. The Company's subsidiary Zoom Sub is currently in default of the note due to CNCG therefore the interest rate adjusted to 14.00%. The note amortizes and matures in October of 2014. The note is unsecured and is not guaranteed by Zoom Technologies, Inc. The note was previously classified as long term.

As of March 31, 2014, and for the three months then ended, the Company has not made any payments on these outstanding notes and they are considered in default.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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