UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





(Mark
One)





[X]
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the quarterly period ended March 31,
2008





[  
      ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT





For the
transition period from ____________ to ______________





Commission
file number: 333-139117





EPAZZ,
Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            
            36-4313571(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (IRS
      Employer Identification No.)





445
East Ohio, Suite 250


Chicago, IL
60611


(Address
of principal executive offices)





(312)
955-8161


(Registrant's
telephone number)








Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes  x    No   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, and
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large accelerated
filer   ̈                                                    Accelerated
filer    ̈


Non-accelerated filer   ̈                                                      Smaller
reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.


Yes    ̈ No   x





The
number of shares of the issuer’s common stock outstanding as of May 12, 2008 was
39,482,940 shares of common stock, par value $0.001 per
share.

















PART
I. FINANCIAL INFORMATION





ITEM 1. FINANCIAL
STATEMENTS





EPAZZ,
INC.


BALANCE
SHEETS


As
of March 31, 2008 and December 31, 2007


(unaudited)





March
      31, 2008
            
            December
      31, 2007ASSETSCurrent
      AssetsCash
            
            $
            619
            
            $
            3,016Deposit
            
            
            10,000
            
            
            –Total
      current assets
            
            
            10,619
            
            
            3,016Property
      and equipment, net of accumulated depreciation of $11,088 and
      10,984
            
            
            1,574
            
            
            1,678TOTAL
      ASSETS
            
            $
            12,193
            
            $
            4,694LIABILITIES
      AND STOCKHOLDERS’ DEFICITLIABILITIESCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
            
            $
            24,585
            
            $
            19,240Current
      portion of note payable
            
            
            3,633
            
            
            3,509Loans
      payable to related parties
            
            
            145,035
            
            
            92,235Total
      current liabilities
            
            
            173,253
            
            
            114,984Long-term
      note payable, net of current portion
            
            
            1,113
            
            
            2,070Long-term
      line of credit
            
            
            100,000
            
            
            100,000TOTAL
      LIABILITIES
            
            
            274,366
            
            
            217,054STOCKHOLDERS’
      DEFICITCommon
      stock, Series A, $0.01 par value, 60,000,000 shares authorized, 39,482,940
      shares issued and outstanding
            
            
            394,829
            
            
            394,829Common
      stock, Series B, $0.01 par value, 60,000,000 shares authorized, 2,500,000
      shares issued and outstanding
            
            
            25,000
            
            
            25,000Additional
      paid-in capital
            
            
            1,041,014
            
            
            1,041,014Accumulated
      deficit
            
            
            (1,723,016
            )
            
            (1,673,203
            )Total
      stockholders’ deficit
            
            
            (262,173
            )
            
            (212,360
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
            
            $
            12,193
            
            $
            4,694











See notes
to financial statements.











F-1








EPAZZ,
INC.


STATEMENTS
OF OPERATIONS


Three
Months Ended March 31, 2008 and 2007


(unaudited)








2008
            
            2007Revenue
            
            $
            –
            
            $
            –Cost
      of revenueGross
      profit
            
            
            –
            
            
            –Operating
      expenses:Research
      and development
            
            
            15,080
            
            
            –General
      & administrative
            
            
            26,796
            
            
            18,385Depreciation
            
            
            104
            
            
            309Total
      operating expenses
            
            
            41,980
            
            
            18,694Operating
      income (loss)
            
            
            (41,980
            )
            
            (18,694
            )Other
      income (expense):Interest
      income
            
            
            5
            
            
            3Interest
      expense
            
            
            (7,838
            )
            
            (2,426
            )Total
      other income (expense)
            
            
            (7,833
            )
            
            (2,423
            )Net
      loss
            
            $
            (49,813
            )
            $
            (21,117
            )Basic
      and diluted net loss per common share
            
            $
            (0.00
            )
            $
            (0.00
            )Weighted
      average common shares outstanding
            
            
            41,982,940
            
            
            41,982,940











See notes
to financial statements.














F-2









EPAZZ,
INC.


STATEMENTS
OF CASH FLOWS


Three
Months Ended March 31, 2008 and, 2007


(unaudited)








2008
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (49,813
            )
            $
            (21,117
            )Adjustments
      to reconcile net loss to cash used in operating
activities:Depreciation
            
            
            104
            
            
            309Changes
      in:Accounts payable and accrued
      liabilities
            
            
            5,345
            
            
            2,426Net
      cash used in operating activities
            
            
            (44,364
            )
            
            (18,382
            )CASH
      FLOWS FROM INVESTING ACTIVITIESDeposit paid on
      acquisition
            
            
            (10,000
            )
            
            –Net
      cash used in investing activities
            
            
            (10,000
            )
            
            –CASH
      FLOWS FROM FINANCING ACTIVITIESRepayment
      of notes payable
            
            
            (833
            )
            
            (1,025
            )Proceeds
      from loans payable to related parties
            
            
            52,800
            
            
            15,400Repayment
      of loans payable to related parties
            
            
            –
            
            
            (500
            )Net
      cash provided by financing activities
            
            
            51,967
            
            
            13,875NET
      CHANGE IN CASH
            
            
            (2,397
            )
            
            (4,507
            )CASH
      AT BEGINNING OF PERIOD
            
            
            3,016
            
            
            5,381CASH
      AT END OF PERIOD
            
            $
            619
            
            $
            874Supplemental
      Disclosures:Interest
      paid
            
            $
            3,160
            
            $
            –Income
      tax paid
            
            
            –
            
            
            –











See notes
to financial statements.










F-3










EPAZZ,
INC.


NOTES
TO FINANCIAL STATEMENTS


(unaudited)








NOTE 1 -
BASIS OF PRESENTATION





The
accompanying unaudited interim financial statements of Epazz, Inc., an Illinois
corporation, have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission, and should be read in conjunction with the
audited financial statements and notes thereto contained in the Annual Report on
Form 10-KSB for the year ended December 31, 2007.  In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected
herein.  The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full
year.  Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements for the
fiscal year 2007, as reported in the Form 10-KSB, have been
omitted.








NOTE 2 –
GOING CONCERN





As of
March 31, 2008, we had an accumulated deficit of $1,723,016 and a working
capital deficit of $162,634.  In addition, we have not generated any
cash from operations and had no cash reserve dedicated to fund
expenditures.  These factors create a substantial doubt as to our
ability to continue as a going concern.





We will
require substantial additional funding for continuing research and development,
obtaining regulatory approval and for the commercialization of our
products.  Management expects to be able to raise enough funds to meet
its working capital requirements through through debt and/or equity
financing.  There is no assurance that we will be able to obtain
sufficient additional funds when needed, or that such funds, if available, will
be obtainable on terms satisfactory to us.  The financial statements
do not include any adjustments that might be necessary should we be unable to
continue as a going concern.








NOTE 3 –
PROPERTY AND EQUIPMENT





Property
and equipment consisted of the following:





Description
            Life
            
            March
      31,2008
            
            December 31,
      2007Computer
      equipment
            5
      years
            
            $
            12,662
            
            $
            12,662Less:
      accumulated depreciation
            
            
            
            (11,088)
            
            
            (10,984)Equipment,
      net
            
            
            $
            1,574
            
            $
            1,678








NOTE 4 –
LETTER OF INTENT





On
February 25, 2008, we entered into a non-binding letter of intent to acquire
100% of the outstanding shares of two proprietary office efficiency software
companies based in Chicago, Illinois.  The total cost of the
acquisition is $420,000.  We currently hope to raise approximately
$200,000 through the sale of equity, and plan to borrow the additional
$220,000.  However, we have not received any of this funding to date,
and as such, there can be no assurance that such funding will be raised on
favorable terms, if at all.  The closing of the acquisition is to
occur in May 2008, funding permitting, and we are required to have funding in
place to complete the acquisition by April 7, 2008 (the “Funding
Date”).  We paid $10,000 as a deposit on the acquisition, which amount
is refunded to us in the event the letter of intent is terminated.





We do not
currently have sufficient cash on hand to complete the acquisition and we are
currently taking steps to raise additional funding through the sale of debt
and/or equity securities.  There can be no assurance that we will have
sufficient funds to complete the acquisition, that the parties will be able to
agree to binding terms for the definitive agreement in connection with the
acquisition, that the funds required for the acquisition will be raised on
favorable terms, if at all, or that such acquisition will be consummated by
us.








NOTE 5 –
LOANS PAYABLE TO RELATED PARTIES





During
the three months ended March 31, 2008, we borrowed an additional $52,800 from
our Chief Executive Officer and other related parties.  At March 31,
2008, the total principal outstanding is $145,035, and we have accrued interest
payable of $22,140 related to these loans.













F-4










ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS





CERTAIN
STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q (THIS "FORM 10-Q"), CONSTITUTE
"FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 (COLLECTIVELY, THE "REFORM ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH
FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "BELIEVES", "EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES", OR
THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR
BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
EPAZZ, INC. ("THE COMPANY", "EPAZZ", "WE", "US" OR "OUR") TO BE MATERIALLY
DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-Q, UNLESS
ANOTHER DATE IS STATED, ARE TO MARCH 31, 2008.





Business
Overview




EPAZZ,
Inc. was incorporated in the State of Illinois on March 23, 2000, to create
software to help college students organize their college information and
resources. The idea behind EPAZZ was that if the information and resources
provided by colleges and universities was better organized and targeted toward
each individual, the students would encounter a personal experience with the
college or university that could lead to a lifetime relationship with the
institution. This concept is already used by business software designed to
retain their relationships with clients, employees, vendors and
partners.





EPAZZ,
Inc. developed a web portal infrastructure operating system product called
BoxesOS v3.0. BoxesOS provides a web portal infrastructure operating system
designed to increase the satisfaction of key stakeholders (students, faculty,
alumni, employees, and clients) by enhancing the organizational experience
through the use of enterprise web-based applications to organize their
relationships and improve the lines of communication. BoxesOS decreases an
organization’s operating expenses by providing development tools to create
advanced web applications. The applications can be created by non-technical
staff members of each institution. BoxesOS creates sources of revenue for Alumni
Associations and Non-Profit organizations through utilizing a web platform to
conduct e-commerce and provides e-commerce tools for small businesses to easily
create "my accounts" for their customers. It further reduces administrative
costs, by combining technology applications into one package, providing an
alternative solution to enterprise resource planner (“ERP”) modules and showing
a return on investment for institutions by reducing the need for 3rd party
applications license fees. BoxesOS can also link a college or university’s
resources with the business community by allowing businesses to better train
their employees by utilizing courseware development from higher education
institutions.





Effective
May 1, 2005, we affected a 20:1 forward stock split of our issued and
outstanding common stock.  All share amounts listed throughout this
report retroactively take into account the forward split.





Recent
Events:





On
February 25, 2008, we entered into a non-binding letter of intent (the “Letter
of Intent”) to acquire 100% of the outstanding shares of two proprietary office
efficiency software companies based in Chicago, Illinois (collectively the
“Target Company”).  The total cost of the acquisition of the Target
Company pursuant to the Letter of Intent is $420,000.  The Company
currently hopes to raise approximately $200,000 through the sale of equity, and
plans to borrow the additional $220,000, however, the Company has not received
any of this funding to date, and as such, there can be no assurance that such
funding will be raised on favorable terms, if at all.  The closing of
the acquisition was to occur on April 30, 2008 (the “Closing”), funding
permitting, and the Company was required to have funding in place to complete
the acquisition by April 7, 2008 (the “Funding Date”).  The Company is
currently working to complete the audit of the Target Company and the seller has
agreed verbally to extend the Closing and the Funding Date.  As such,
we still believe that we will be able to close the acquisition of the Target
Company, funding permitting, of which there can be no assurance.  The
Company has paid $10,000 as deposit on the acquisition to date, which amount is
refunded to the Company in the event the Company terminates the Letter of Intent
and to the Target Company, in the event the Target Company terminates the Letter
of Intent, as described below.











-2-










The
Letter of Intent can be terminated by the mutual consent of both parties, by the
Company at any time while conducting due diligence, by the Target Company, if
the Company materially breaches any covenant under the Letter of Intent, or by
the Company, if the Target Company breaches any term of the Letter of
Intent.





The
Company does not currently have sufficient cash on hand to complete the
acquisition and is currently taking steps to raise additional funding through
the sale of debt and/or equity securities.  There can be no assurance
that the Company will have sufficient funds to complete the acquisition, that
the parties will be able to agree to binding terms for the definitive agreement
in connection with the acquisition, that the funds required for the acquisition
will be raised on favorable terms, if at all, or that such acquisition will be
consummated by the Company.





Our
Product




EPAZZ
BoxesOS v3.0 (Web Infrastructure Operating System) is EPAZZ's flagship product.
It is the core package of EPAZZ’s products and services. EPAZZ BoxesOS
integrates with each organization's back-end systems and provides a customizable
personal information system for each stakeholder.




Services
include:




·Single
      sign-on: Provides a powerful single-sign-on with security procedure to
      product users’ information and
identity.





·Course
      Management System: Manage distance, traditional courses and
      Calendar.





·Enterprise
      Web Site Content Management: Manage public sites with multi
      contributors.





·Integration
      Management Services: Integrated into Enterprise Resource Planning (“ERP”)
      and Mainframes.





·Email
      Management: Email server and web
client.





·Instant
      Messenger Services: Instant messaging and
  alerts.





·Customer
      Relationship Management: Prospective students and
  alumni.





·Calendar/Scheduler
      Management: Event directory, groupware, and personal
    calendar.





·Administrative
      Support Services: Online payment
services.





·Business
      Services: Facility Management and Online
  Bookstore.
















-3-




BoxesOS
software provides:






Web
Portal Component





BoxesOS
Web Portal Component is a gateway to all of an organization’s online services
and information resources. The Web Portal Component provides a Personal
Information System, which refers to the user's entire online environment - the
user’s resources, information, graphics, color, layout, and organization. All
resources are customizable. The Web Portal Component simplifies organizations’
ability to create and deploy custom web applications with a common graphic user
interface and connectivity to the back-end systems.





Administrative
Content Management





BoxesOS
Content Management Component provides an organization with enterprise level
tools for creating, managing, organizing, archiving and sharing content. Content
can be delivered in many forms such as web pages, emails, polls, documents, web
forms, rich site summaries (“RSS”), and “hot news.” The Content Management
Component enables staff members with little technical skills to create web pages
and processes without having any programming skills.




Work
Hub





Work Hub
provides a host of applications that can empower an organization to increase
productivity while decreasing costs. Work Hub helps to manage work flow
throughout an organization. Senior management is able to view a document for
approval before it is sent out to a client. A Company can view all projects of
the enterprise in one page. Some of the applications in Work Hub are
products/services management, project management, invoice management, time
management, content management and sales management. Work Hub has clear graphic
charts with detail reports on many areas.





Central
Repository





BoxesOS
Central Knowledge Repository is a collection and indexing of shareable content.
Central Knowledge Repository installs a server index application on the Windows
2003 platform to identify an organization’s current knowledge assets. All
knowledge assets will be imported into a storage device. The server index
application will import the knowledge assets into a temporary folder before
moving into a main folder. The server index application will prompt the
organization’s administrators to add detailed information about the knowledge
assets into the database by using a web form. These forms will allow the
administrators to add custom fields; therefore, allowing the organization to add
custom information to the database in the present and at a future date. The
organization would be able to group their knowledge objects by program, course,
subject, topic, users, content, or date.





ViewPoint





ViewPoint
is BoxesOS central communication hub, calendaring, contact management and
scheduling system. ViewPoint works with or can be used as an alternative to MS
Outlook/MS Exchange Server. The web applications provide the institution with an
extensive range of options including communication system email web client and
an email server. Email applications provide features you would find on popular
web-based e-mail providers. ViewPoint provides robust threaded discussion boards
and a “chatting” environment. ViewPoint provides each user with a personal
calendar, which notifies users of scheduling conflicts and appointments
priorities. ViewPoint makes it easy to create group calendars and public
calendars. With the ViewPoint scheduling system users are able to schedule group
meetings together. The scheduling system will view each user's calendar to see
the next available time and date the group can meet.





Learning
Management System




BoxesOS
My Courses is an extensive application for learning management, and e-learning.
My Courses is an effective means for managing traditional courses, distance
learning courses, and self-paced courses. My Courses is a powerful communication
tool that can be effectively used by students, instructors, employees and
corporate trainers to make information flow easily, clearly and faster. My
Courses provides a robust grade book, powerful authoring content tools, easy to
use drop box, sharable folders, wide-ranging course calendar and many more
features all designed to provide customization to key stakeholders.
Organizations will be able to train their employees on systems using My Courses
self-paced settings, as well as test candidates on their skill sets before they
are hired.













-4-










Single
Sign-on




Single
Sign-on provides organizations the ability to log into multiple systems with a
single unique username and password. The username and password authenticates the
user’s credentials to make sure the person who is accessing the data is
authorized to. BoxesOS uses Microsoft Active Directory Identity Management to
accomplish single sign on. Microsoft Active Directory allows institutions to
centrally manage and share user information. Active Directory also acts as the
single sign on point for bringing systems and applications together. BoxesOS
user management integrates with Active Directory.





Pathways
Real-time Integration





EPAZZ
Pathways is an integration suite enabling real-time connectivity with ERP and
Legacy systems. Pathways integration suite allows organizations to retrieve data
from ERPs and write data back to ERPs in real-time.





PLAN
OF OPERATION





During
the next twelve months, we plan to take the following steps in connection with
the further development of our business and the implementation of our plan of
operations:




·Single
      sign-on: Provides a powerful single-sign-on with security procedure to
      product users’ information and
identity.
 
 ·Course
      Management System: Manage distance, traditional courses and
      Calendar.
 
 ·Enterprise
      Web Site Content Management: Manage public sites with multi
      contributors.
 
 ·Integration
      Management Services: Integrated into Enterprise Resource Planning (“ERP”)
      and Mainframes.
 
 ·Email
      Management: Email server and web
client.
 
 ·Instant
      Messenger Services: Instant messaging and
  alerts.
 
 ·Customer
      Relationship Management: Prospective students and
  alumni.
 
 ·Calendar/Scheduler
      Management: Event directory, groupware, and personal
    calendar.
 
 ·Administrative
      Support Services: Online payment
services.
 
 ·Business
      Services: Facility Management and Online
  Bookstore.











We
believe we can satisfy our cash requirements for the next two months with our
current cash on hand. As such, continuing operations and completion of our plan
of operation, including the proposed purchase of the Target Company, as
described above, is subject to attaining adequate revenue. We cannot assure
investors that adequate revenues will be generated. In the absence of our
projected revenues, we may be unable to proceed with our plan of operations.
Even without significant revenues within the next several months, we still
anticipate being able to continue with our present activities, but we may
require financing to potentially achieve our goal of profit, revenue and
growth.




We
anticipate that our operational as well as general and administrative expenses
for the next 12 months will total approximately $100,000, not including the
significant funds we will need to raise to complete the acquisition of the
Target Company, which there can be no assurance will be raised. In the event we
are not successful in reaching our initial revenue targets, additional funds may
be required, and we would then not be able to proceed with our business plan for
the development and marketing of our software. Should this occur, we would
likely seek additional financing to support the continued operation of our
business. We anticipate that depending on market conditions and our plan of
operations, we would incur operating losses in the foreseeable future. We base
this expectation, in part, on the fact that we may not be able to generate
enough gross profit from sales to cover our operating expenses.





RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008, AS COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2007





For the
three months ended March 31, 2008 we had revenue of $0, as well as revenue of $0
for the three months ended March 31, 2007.   We do not currently
have any customers nor do we anticipate generating any additional revenues
until we obtain additional customers, if ever.





We had
research and development expenses of $15,080 for the three months ended March
31, 2008, compared with research and development expenses of $0 for the three
months ended March 31, 2007, an increase of $15,080.  The primary
reason for the increase in research and development expenses was testing of our
updates to BoxesOS during the three months ended March 31, 2008, which expenses
were not present during the three months ended March 31, 2007.





General
and administrative expenses increased by $8,411 or 45.7% to $26,796 for the
three months ended March 31, 2008 compared to general and administrative
expenses of $18,385 for the three months ended March 31, 2007.  This
increase in general and administrative expenses is due to increased legal,
accounting and filing expenses associated with our status as a public reporting
company during the three months ended March 31, 2008, compared to the three
months ended March 31, 2007, when we were not a public reporting
company.





We had
depreciation expense of $104 for the three months ended March 31, 2008 compared
to $309 for the three months ended March 31, 2007, due to a decrease in our
depreciable asset base.





Total
operating expenses for the three months ended March 31, 2008 were $41,980,
compared to $18,694 for the three months ended March 31, 2007, an increase of
$23,286 or 125% from the prior period. Operating expenses increased for the
three months ended March 31, 2008 compared to the three months ended March 31,
2007 as a result of the $15,080 increase in research and development expenses
and the $8,411 increase in general and administrative expenses, offset by the
$205 decrease in depreciation, for the three months ended March 31, 2008
compared to the three months ended March 31, 2007.





Interest
expense was $7,838 for the three months ended March 31, 2008 compared to $2,426
for the three months ended March 31, 2007, an increase of $5,412 or 223% from
the prior period. Interest expense increased for the three months ended March
31, 2008 because we borrowed additional funds from our CEO and against a bank
line of credit during the three months ended March 31, 2008, as described
below.





We had a
net loss of $49,813 for the three months ended March 31, 2008 compared to a net
loss of $21,117 for the three months ended March 31, 2007.











-5-








LIQUIDITY
AND CAPITAL RESOURCES





We had
total current assets of $10,619 as of March 31, 2008, consisting of cash of $619
and deposits of $10,000, in connection with the deposit for the Target Company,
described above.





We had
property and equipment, net of accumulated depreciation, of $1,574 as of March
31, 2008.





We total
current liabilities of $173,253 as of March 31, 2008, consisting of $24,585 of
accounts payable and accrued liabilities, $3,633 of current portion of note
payable, and $145,035 of loans payable to related parties, which loans were due
to our Chief Executive Officer and various other related parties.





We had
negative working capital of $162,634 and a total accumulated deficit of
$1,723,016 as of March 31, 2008.





We had
long-term note payable, net of current portion of $1,113 and long term line of
credit of $100,000 as of March 31, 2008, which line of credit is described
below.





We had
net cash used in operating activities of $44,364 for the three months ended
March 31, 2008, which was mainly due to $49,813 of net loss, offset by $5,345 of
increase in accounts payable and accrued liabilities and $104 of
depreciation.





We had
$10,000 of net cash used in investing activities for the three months ended
March 31, 2008, which was in connection with the deposit paid on the pending
acquisition, as described above.





We had
$51,967 of net cash provided by financing activities during the three months
ended March 31, 2008, which represented $52,800 of proceeds from loans payable
to related parties, offset by $833 of repayment of debt.





On June
5, 2007, we obtained a line of credit of $100,000 from a bank.  The
outstanding balance on the line of credit bears interest at prime plus 4.5%
(9.75% as of the filing of this Report, with the prime rate at 5.25% as of April
1, 2008), resetting every January 1, April 1, July 1, and October 1, that the
line of credit is outstanding, and expiring on July 5, 2010.  Interest
is due monthly.  Combined equal installments of principal and interest
are to be paid monthly beginning July 5, 2010 until June 5, 2014.  We
agreed pursuant to the line of credit to pay a late fee equal to 4% of any
payment due under the line of credit which is more than fifteen days
late.  As of the date of this report, the entire $100,000 has been
borrowed under the line of credit.





We also
borrow from our Chief Executive Officer, Shaun Passley and other related parties
periodically under verbal agreements.  The loans bear interest at 15%
interest.  At March 31, 2008, the outstanding balance was
$145,035.  We also had accrued interest payable of $22,140 in
connection with the outstanding loans owed to Mr. Passley.





We have
no current commitment from our officers and Directors or any of our shareholders
to supplement our operations or provide us with financing in the future. If we
are unable to raise additional capital from conventional sources and/or
additional sales of stock in the future, we may be forced to curtail or cease
our operations. Even if we are able to continue our operations, the failure to
obtain financing could have a substantial adverse effect on our business and
financial results.





In the
future, we may be required to seek additional capital by selling debt or equity
securities, selling assets, or otherwise be required to bring cash flows in
balance when we approach a condition of cash insufficiency. The sale of
additional equity or debt securities, if accomplished, may result in dilution to
our then shareholders. We provide no assurance that financing will be available
in amounts or on terms acceptable to us, or at all.











-6-










Critical
Accounting Policies





Our
discussion and analysis of our financial condition and results of operations is
based upon our unaudited financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to
uncollectible receivable, investment values, income taxes, the recapitalization
and contingencies. We base our estimates on various assumptions that we believe
to be reasonable under the circumstances, the results of which form the basis
for making judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.




Recently issued accounting
pronouncements. The Company does not expect the adoption of any recently
issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flows.





ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to
provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).





ITEM 4. CONTROLS AND
PROCEDURES





(a)
Evaluation of disclosure controls and procedures. Our Chief Executive Officer
and Principal Financial Officer, after evaluating the effectiveness of our
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by
this Quarterly Report on Form 10-Q (the "Evaluation Date"), has concluded that
as of the Evaluation Date, our disclosure controls and procedures were effective
to provide reasonable assurance that information we are required to disclose in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.





(b)
Changes in internal control over financial reporting. There were no changes in
our internal control over financial reporting during our most recent fiscal
quarter that materially affected, or were reasonably likely to materially
affect, our internal control over financial reporting.












-7-












PART II - OTHER
INFORMATION





ITEM 1. LEGAL
PROCEEDINGS





From time
to time, we may become party to litigation or other legal proceedings that we
consider to be a part of the ordinary course of our business. We are not
currently involved in legal proceedings that could reasonably be expected to
have a material adverse effect on our business, prospects, financial condition
or results of operations. We may become involved in material legal proceedings
in the future.





ITEM 1A. RISK
FACTORS





Any
investment in our common stock involves a high degree of risk. Investors should
carefully consider the risks described below and all of the information
contained in this report before deciding whether to make an equity investment in
our Company. Our business, financial condition or results of operations could be
materially adversely affected by these risks if any of them actually occur. Some
of these factors have affected our financial condition and operating results in
the past or are currently affecting us.




RISKS
RELATED TO OUR BUSINESS





We
will need to raise additional funds in the future to continue our operations and
these funds may not be available on acceptable terms or at all. Failure to raise
additional funds could require us to substantially reduce or terminate our
operations.





We
anticipate raising additional funds through public or private financing,
strategic relationships or other arrangements in the near future to support our
business operations; however we currently do not have commitments from third
parties for additional capital. We currently anticipate that we will only be
able to continue our business operations for the next two (2) months with our
current cash on hand and will need approximately $100,000 to continue our
operations for the next 12 months, not including any funds we will need in
connection with the acquisition of the Target Company.  We cannot be
certain that any such financing will be available on acceptable terms, or at
all, and our failure to raise capital when needed could limit our ability to
continue and expand our business. We intend to overcome the circumstances that
impact our ability to remain a going concern through a combination of the
commencement of additional revenues, with interim cash flow deficiencies
being addressed through additional equity and debt financing. Our ability to
obtain additional funding in year 2008 and thereafter will determine our ability
to continue as a going concern. There can be no assurances that these plans for
additional financing will be successful. Failure to secure additional financing
in a timely manner and on favorable terms if and when needed in the future could
have a material adverse effect on our financial performance, results of
operations and stock price and require us to implement cost reduction
initiatives and curtail operations. Furthermore, additional equity financing may
be dilutive to the holders of our common stock, and debt financing, if
available, may involve restrictive covenants, and strategic relationships, if
necessary to raise additional funds, and may require that we relinquish valuable
rights.





We will require a significant amount
of additional financing to complete our planned Target Company
acquisition.




On
February 25, 2008, we entered into a non-binding letter of intent (the “Letter
of Intent”) to acquire 100% of the outstanding shares of two proprietary office
efficiency software companies based in Chicago, Illinois (collectively the
“Target Company”).  The total cost of the acquisition of the Target
Company pursuant to the Letter of Intent is $420,000.   We will need
to raise additional funds in order to acquire the Target Company. Any required
additional financing may not be available on terms acceptable to us, or at all.
If we raise additional funds by issuing equity securities, you may experience
significant dilution of your ownership interest, and the newly-issued securities
may have rights senior to those of the holders of our common stock. If we raise
additional funds by obtaining loans from third-parties, the terms of those
financing arrangements may include negative covenants or other restrictions on
our business that could impair our operational flexibility, and would also
require us to fund additional interest expense. If additional financing is not
available when required or is not available on acceptable terms, we may be
unable to successfully complete the acquisition of the Target Company, which
could materially adversely affect our software and services offerings, revenue,
results of operations and financial condition. We have not currently raised any
funds in connection with the planned purchase of the Target
Company.













-8-












If
we are deemed to be a “shell company,” shareholders who hold unregistered shares
of our common stock will be subject to resale restrictions pursuant to Rule
144.





Pursuant
to Rule 144 of the Securities Act of 1933, as amended (“Rule 144”), a “shell
company” is defined as a company that has no or nominal operations; and, either
no or nominal assets; assets consisting solely of cash and cash equivalents; or
assets consisting of any amount of cash and cash equivalents and nominal other
assets.  We do not currently believe that we are a “shell company”
however, we may be deemed to be a “shell company.” If we are deemed to be a
“shell company” pursuant to Rule 144, sales of our securities pursuant to Rule
144 will not be able to be made until 1) we have ceased to be a “shell company;
2) we are subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, and have filed all of our required periodic reports for a period of
one year; and a period of at least twelve months has elapsed from the date “Form
10 information” has been filed with the Commission reflecting the Company’s
status as a non-“shell company.”  Because none of our securities will
be able to be sold pursuant to Rule 144, until at least a year after we cease to
be a “shell company” (as described in greater detail above), any securities we
issue to consultants, employees, in consideration for services rendered or for
any other purpose will have no liquidity in the event we are deemed to be a
“shell company” until and unless such securities are registered with the
Commission and/or until a year after we cease to be a “shell company” and have
complied with the other requirements of Rule 144, as described
above.  As a result, it may be harder for us to fund our operations
and pay our consultants with our securities instead of
cash.  Furthermore, it will be harder for us to raise funding through
the sale of debt or equity securities unless we agree to register such
securities with the Commission, which could cause us to expend additional
resources in the future.  If we are deemed a “shell company,” it could
prevent us from raising additional funds, engaging consultants using our
securities to pay for any acquisitions, which could cause the value of our
securities, if any, to decline in value or become
worthless.





We
have a limited operating history on which to evaluate our business which makes
it difficult to predict future operating results.




Our
business prospects are difficult to predict because of our limited operating
history, unproven business strategy and unproven product. Since our inception in
March 2000, it has been our business plan to design, develop and distribute our
sole product - BoxesOS. BoxesOS is enterprise software for higher education
institutions and enterprises. BoxesOS has yet to be introduced to the mainstream
market and there is no guarantee that our product will be able to generate any
significant revenues. To the extent that we are able to implement our business
plan, our business will be subject to all of the problems that typically affect
a business with a limited operating history, such as unanticipated expenses,
capital shortfalls, delays in design and manufacturing and possible cost
overruns.





We
have a history of losses and we anticipate that our expenses will dramatically
increase as we execute our business plan. Thus, we will likely experience
continued losses in the near future and may not ever achieve or maintain
profitability.





EPAZZ has
yet to initiate significant sales or demonstrate that it can generate sufficient
sales to become profitable. EPAZZ incurred significant net losses since its
inception in March 2000, including a net loss of $152,658 and $618,988 for the
years ended December 31, 2007 and 2006, respectively, and a net loss of $49,813
for the three months ended March 31, 2008. As of March 31, 2008, EPAZZ had an
accumulated deficit of $1,723,016. We expect to continue to incur operating
losses in the future. Furthermore, we expect operating expenses to increase as
we seek to update our product, build relationships with future customers, build
a distribution channel for our products, continue design and development
projects, and increase administrative activities to support our planned growth.
We expect to need approximately $100,000 to sustain our operations for the next
12 months, not including the purchase of the Target Company. We anticipate only
being able to continue our operations for the next two months if no additional
funding is raised.  The extent of our future operating losses and the
timing of our profitability are highly uncertain, we may never generate
sufficient revenues to achieve or sustain profitability.














-9-











Our
independent registered public accountants indicate that we have conditions that
raise substantial doubts that we can continue as a going concern, which may
negatively affect our ability to raise additional funds and otherwise operate
our business. If we fail to raise sufficient capital, we will not be able to
implement our business plan, we may have to liquidate our business, and you may
lose your investment.




GBH CPAs,
PC, our independent registered public accountants, has added an explanatory
paragraph to their audit opinion issued in connection with the financial
statements contained herein indicating that it has substantial doubt about our
ability to continue as a going concern given our recurring losses from
operations and deficiencies in working capital and equity. This opinion could
materially limit our ability to raise additional funds by issuing new debt or
equity securities or otherwise. If we fail to raise sufficient capital, we will
not be able to implement our business plan, we may have to liquidate our
business and you may lose your investment. You should consider our independent
registered public accountants’ comments when determining if an investment in us
is suitable.




Shares
eligible for future sale may adversely affect the market price of our common
stock, as the future sale of a substantial amount of outstanding stock in the
public marketplace could reduce the price of our common
stock. Additionally, shares issued in our planned offering will cause
immediate and substantial dilution to our existing shareholders.




Shares
eligible for future sale may have an adverse effect on the market price of our
common stock by creating an excessive supply. We currently plan to undertake an
offering of our securities in connection with the planned acquisition of the
Target Company, which would cause a significant increase in the number of
outstanding shares which we currently have, and would cause immediate and
substantial dilution to our existing shareholders.  Additionally in
the future, shareholders, including our President and Chief Executive Officer,
and any shareholders who purchase shares in the planned offering may be eligible
to sell all or some of their shares of common stock by means of ordinary
brokerage transactions in the open market pursuant to Rule 144, promulgated
under the Securities Act, subject to certain limitations. In general, pursuant
to Rule 144, if Epazz remains a reporting company, a non “affiliate” stockholder
(or stockholders whose shares are aggregated) who has satisfied a six month
holding period may sell their securities free of any volume limitations. Rule
144 also permits, under certain circumstances, the sale of securities, with
certain volume limitations, by an affiliate, if the Company is a reporting
company, the “affiliate” has held such shares for six months, and the Company
continues to file periodic reports with the commission.  The rules are
different however for non-reporting companies in that non-“affiliate” and
“affiliate shareholders must hold their securities for at least a year, and no
sales by “non-affiliates” are able to be made unless certain requirements are
met, including, but not limited to that there is current public information
available regarding the Company and the “affiliate” complies with the applicable
volume limitations.  The disclosures in this paragraph assume for all
purposes that the Company is not a “shell company,” as described above. Any
substantial sale of common stock pursuant to any resale prospectus or Rule 144
may have an adverse effect on the market price of our common stock by creating
an excessive supply.





Our
business is based on a single unproven product, and we may not be able to
generate significant revenue if our product fails.





We have
one product line. Our business and ability to generate revenue will depend on
our ability to successfully develop and commercialize our only product type —
our BoxesOS software — which currently has a very limited market. We may
experience unforeseen difficulties during our development of a market for our
product, which may require us to expend a significant amount of resources. Any
problems with the product could affect the commercial viability of the
product.





Further,
even if we are able to release our product into the broad market, there can be
no assurance that it will be well-received by the market or that it will
generate any substantial revenue. Accordingly, our failure to generate revenue
from our sole product type will have a significant negative impact on our
business and results of operation, and shareholders in our company may lose all
or part of their investment.











-10-












Our
success depends in part upon our ability to develop new products and enhance our
existing products. Failure to successfully introduce new or enhanced products to
the market may adversely affect our business.




We may
not be successful in achieving market acceptance of our recently released
products, any other new products that we develop or any enhanced versions of our
existing products that we introduce. Any failure or delay in diversifying our
existing product offerings could harm our business, results of operations and
financial condition.




Our
future success depends in part on our ability to develop enhancements to our
existing products and to introduce new products that keep pace with rapid
technological developments. We must continue to modify and enhance our products
to keep pace with changes in technologies. We may not be successful in
developing these modifications and enhancements or in bringing them to market in
a timely manner. In addition, uncertainties about the timing and nature of new
technologies and platforms or modifications to existing platforms or
technologies, could increase our research and development expenses. Any failure
of our products to operate effectively with future network platforms and
technologies could reduce the demand for our products, result in customer
dissatisfaction and harm our business.  Additionally, accelerated
product introductions and short product life cycles require high levels of
expenditures for research and development that could adversely affect our
operating results.





Our
operating results are difficult to predict and fluctuate substantially from
quarter to quarter and year to year, which may increase the difficulty of
financial planning and forecasting and may result in declines in our stock
price.




Our
future operating results may vary from our past operating results, are difficult
to predict and may vary from year to year due to a number of factors. Many of
these factors are beyond our control. These factors include:






●the potential delay in recognizing revenue from transactions due to
      revenue recognition rules which we must
follow;
 
 ·      ●customer decisions to delay implementation of our
      products;
 
 ●any
      seasonality of technology
purchases;
 
 ●demand for our products, which may fluctuate
      significantly;
 
 ●the
      timing of new product introductions and product enhancements by both EPAZZ
      and our competitors;
 
 ●changes in our pricing policy;
and
 
 ●the
      publication of opinions concerning us, our products or technology by
      industry analysts.
 
 As a
result of these and other factors, our operating results for any fiscal year
will be subject to significant variation, and we believe that period-to-period
comparisons of our results of operations are not necessarily meaningful in terms
of their relation to future performance. You should not rely upon these
comparisons as indications of future performance. It is likely that our future
quarterly and annual operating results from time to time will not meet the
expectations of public market analysts or investors, which could cause a drop in
the price of our common stock.













-11-








Defects or errors in our software
could adversely affect our reputation, result in significant costs to us and
impair our ability to sell our software.




If our
software is determined to contain defects or errors, our reputation could be
materially adversely affected, which could result in significant costs to us and
impair our ability to sell our software in the future. The costs we would incur
to correct product defects or errors may be substantial and would materially
adversely affect our operating results. After the release of our software,
defects or errors may be identified from time to time by our internal team and
by our clients. Such defects or errors may occur in the future.





Any
defects in our applications, or defects that cause other applications to
malfunction or fail, could result in:





·      ●lost
      or delayed market acceptance and sales of our
  software;




·      ●loss
      of clients;





·      ●product liability suits against
us;





·      ●diversion of development
  resources;





·      ●injury to our reputation;
and





·      ●increased maintenance and warranty
  costs.




Our
market is subject to rapid technological change and if we fail to continually
enhance our products and services in a timely manner, our revenue and business
would be harmed.




We must
continue to enhance and improve the performance, functionality and reliability
of our products and services in a timely manner. The software industry is
characterized by rapid technological change, changes in user requirements and
preferences, frequent new product and services introductions embodying new
technologies, and the emergence of new industry standards and practices that
could render the our products and services obsolete. Our failure to continually
enhance our products and services in a timely manner would adversely impact our
business and prospects. Our success will depend, in part, on our ability to
internally develop and license leading technologies to enhance our existing
products and services, to develop new products and services that address the
increasingly sophisticated and varied needs of our future customers, and to
respond to technological advances and emerging industry standards and practices
on a cost-effective and timely basis. Our product development efforts with
respect to ourBoxesOSproduct is expected to continue to require substantial investments by
EPAZZ, and we may not have sufficient resources to make the necessary
investments. If we are unable to adapt our products and services to changing
market conditions, customer requirements or emerging industry standards, we may
not be able to maintain or increase our revenue and expand our
business.





Our
management has no senior management experience in the software industry which
may hinder our ability to manage our operations.





Our
Company is a new software company and our management has limited experience
managing in our industry and our management and employees have limited
experience developing and selling software. The lack of experience in software
design and sales may make it difficult to compete against companies that have
more senior management and design experience. We expect to add additional key
personnel in the future. Our failure to attract and fully integrate our new
employees into our operations or successfully manage such employees could have a
material adverse effect on our business, financial condition and results of
operations.











-12-










Our
lack of product diversification means that any decline in price or demand for
our products and services would seriously harm our business.




Our
BoxesOS product and related services have accounted for substantially all of our
revenue and this situation is expected to continue for the foreseeable future.
Consequently, a decline in the price of, or demand for BoxesOS or related
services, or its failure to achieve broad market acceptance, would seriously
harm our business.




Significant
unauthorized use of our products would result in material loss of potential
revenues and our pursuit of protection for our intellectual property rights
could result in substantial costs to us.




EPAZZ’s
software is planned to be licensed to customers under license agreements, which
license may include provisions prohibiting the unauthorized use, copying and
transfer of the licensed program. Policing unauthorized use of our products will
likely be difficult and, while we are unable to determine the extent to which
piracy of our software products exists, any significant piracy of our products
could materially and adversely affect our business, results of operations and
financial condition. In addition, the laws of some foreign countries do not
protect the proprietary rights to as great an extent as do the laws of the
United States and our means of protecting our proprietary rights may not be
adequate.





We
may face product liability claims from our future customers which could lead to
additional costs and losses to the Company.




Our
license agreements with our future customers will contain provisions designed to
limit our exposure to potential product liability claims. It is possible,
however, that the limitation of liability provisions contained in the license
agreements may not be effective under the laws of some jurisdictions. A
successful product liability claim brought against EPAZZ could result in payment
by EPAZZ of substantial damages, which would harm its business, operating
results and financial condition and cause the price of its common stock to
fall.




We may not be able to respond to
technological changes with new software applications, which could materially
adversely affect our sales and profitability.





The
markets for our software applications are characterized by rapid technological
changes, changing customer needs, frequent introduction of new software
applications and evolving industry standards. The introduction of software
applications that embody new technologies or the emergence of new industry
standards could make our software applications obsolete or otherwise
unmarketable. As a result, we may not be able to accurately predict the
lifecycle of our software applications, which may become obsolete before we
receive any revenue or the amount of revenue that we anticipate receiving from
them. If any of the foregoing events were to occur, our ability to retain or
increase market share could be materially adversely affected.




To be
successful, we need to anticipate, develop and introduce new software
applications on a timely and cost-effective basis that keep pace with
technological developments and emerging industry standards and that address the
increasingly sophisticated needs of our future customers and their budgets. We
may fail to develop or sell software applications that respond to technological
changes or evolving industry standards, experience difficulties that could delay
or prevent the successful development, introduction or sale of these
applications or fail to develop applications that adequately meet the
requirements of the marketplace or achieve market acceptance. Our failure to
develop and market such applications and services on a timely basis, or at all,
could materially adversely affect our sales and profitability.





Our failure to offer high quality
customer support services could harm our reputation and could materially
adversely affect our sales of software applications and results of
operations.




Our
future customers, if any, will depend on us to resolve implementation, technical
or other issues relating to our software. A high level of service is critical
for the successful marketing and sale of our software. If we do not succeed in
helping our customers quickly resolve post-deployment issues, our reputation
could be harmed and our ability to make new sales or increase sales to customers
could be damaged.











-13-










We
expect to rely on off-shore independent contract service providers and, as a
result, will be exposed to potential service problems from those
providers.





Certain
company functions, such as software development, will be provided through
off-shore contract providers. Any material disruption or slowdown in service
resulting from telephone or Internet failures, power or service outages, natural
disasters, labor disputes, or other events could make it difficult or impossible
to provide adequate off-shore services. Furthermore, we may be unable to attract
and retain an adequate number of competent software developers, which is
essential in creating a favorable customer experience. In addition, because our
outsourced software development is located in India, we may experience
difficulties in training or monitoring the level of support provided. If we are
unable to continually provide adequate and trained staffing for our software
development operations, our reputation could be seriously harmed and our sales
could decline. Further, we cannot assure you that our needs will not exceed our
capacities. If this occurs, we could experience delays in developing software
and addressing customer concerns. Because our success depends in large part on
keeping our future customers satisfied, any failure to provide satisfactory
levels of software development would likely impair our reputation and we could
lose customers.





Our
business could be harmed if our independent third party contractors violate
labor or other laws.





Once we
are able to retain them, our independent contract third party contractors may
not operate in compliance with applicable United States and foreign laws and
regulations, including labor practices. If one of any of our possible future
independent contractors violates labor or other laws or diverges from those
labor practices generally accepted as ethical in the United States, it could
result in adverse publicity for us, damage our reputation in the United States
or render our conduct of business in a particular foreign country undesirable or
impractical, any of which could harm our business.





Our
future success depends on our ability to respond to changing customer demands,
identify and interpret trends and successfully market new products.





The
software industry is subject to rapidly changing customer demands, particularly
in the “enterprise” market that we intend to market our product. Accordingly, we
must identify and interpret trends and respond in a timely manner. Demand for
and market acceptance of new products are uncertain and achieving market
acceptance for new products generally requires substantial product development
and marketing efforts and expenditures. If we do not meet changing customer
demands or are unable to develop products that appeal to current customer
demands, our results of operations will be negatively impacted. In addition, we
will have to make decisions about product development and marketing expenditures
in advance of the time when customer acceptance can be determined. If we fail to
anticipate, identify or react appropriately to changes and trends or are not
successful in marketing our products, we could experience excess inventories,
higher than normal markdowns or an inability to sell our products once and if
the products are available.





Our
business and the success of our products could be harmed if we are unable to
establish and maintain a brand image.





We
believe that establishing the EPAZZ brand is critical to achieving acceptance of
our software products and to establishing key strategic relationships. As a new
company with a new brand, we believe that we have little to no brand recognition
with the public. We may experience difficulty in establishing a brand name that
is well-known and regarded, and any brand image that we may be able to create
may be quickly impaired. The importance of brand recognition will increase when
and if our competitors create products that are similar to our products. Even if
we are able to establish a brand image and react appropriately to changes in
customer preferences, customers may consider our brand image to be less
prestigious or trustworthy than those of our larger competitors. Our results of
operations may be affected in the future should our products even be
successfully launched.










-14-







We
may fail in introducing and promoting our products to the software market, which
will have an adverse effect on our ability to generate revenues.




Demand
for and market acceptance of new products such as BoxesOS is inherently
uncertain. We expect that our revenue, if and when generated, will come from the
sale of our products, and our ability to sell our products will depend on
various factors, including the eventual strength, if any, of our brand name,
competitive conditions and our access to necessary capital. If we fail to
introduce and promote our products, we may not be able to generate any
significant revenues. In addition, as part of our growth strategy, we intend to
expand our product offerings to introduce products in multiple categories. This
strategy may however prove unsuccessful and our association with failed products
could impair our brand image. Introducing and achieving market acceptance for
these products will require, among other things:





·      ●the
      establishment of our brand;





·      ●the
      development and performance to our planned product
      introductions;





·      ●the
      establishment of key relationships with customers for our software
      products; and





·      ●substantial marketing and product development efforts and
      expenditures to create and sustain customer
  demand.





We
are likely to depend upon a relatively small group of customers for a large
portion of our sales making us vulnerable to significant decreases in
revenue.





While we
do not currently have any customers, our future customers are not likely to have
a contractual obligation to purchase our products once they are available and we
cannot be certain that we will be able to retain major customers. We are likely
to rely at all stages of our business on certain significant customers. If we
lose a major customer in the future, experience a significant decrease in sales
to a major customer or are unable to collect the accounts receivable of a major
customer, our business could be harmed.





We
will face intense competition, including competition from companies with
significantly greater resources than ours, and if we are unable to compete
effectively with these companies, our business could be harmed.





We will
face intense competition in the software industry from other established
companies. We have a very limited market for our product, product sales, brand
recognition, manufacturing or brand equity. Almost all of our competitors have
significantly greater financial, technological, engineering, manufacturing,
marketing and distribution resources than we do. Their greater capabilities in
these areas will enable them to better withstand periodic downturns in the
software industry, compete more effectively on the basis of price and production
and more quickly develop new products. In addition, new companies may enter the
markets in which we expect to compete, further increasing competition in the
software industry.





We
believe that our ability to compete successfully will depend on a number of
factors, including the functionality of our products once marketed and the
strength of our brand, once established, as well as many factors beyond our
control. We may not be able to compete successfully in the future, and increased
competition may result in price reductions, reduced profit margins, loss of
market share and an inability to generate cash flows that are sufficient to
maintain or expand our development and marketing of new products.





We
depend on key personnel to manage our business effectively in a rapidly changing
market, and if we are unable to retain existing personnel, our business could be
harmed.





Our
future success depends upon the continued services of key employees especially
Shaun Passley, our President and Chief Executive Officer. The loss of the
services of Mr. Passley or any other key employee could harm us. Our future
success also depends on our ability to identify, attract and retain additional
qualified personnel. Competition for employees in our industry is intense and we
may not be successful in attracting and retaining such personnel.













-15-








The
disruption, expense and potential liability associated with unanticipated future
litigation against us could have a material adverse effect on our business,
results of operations and financial condition.





We may be
subject to various legal proceedings and threatened legal proceedings from time
to time as part of our ordinary business. We are not currently a party to any
legal proceedings. However, any unanticipated litigation in the future,
regardless of merits, could significantly divert management’s attention from our
operations and result in substantial legal fees to us. Further, there can be no
assurance that any actions that have been or will be brought against us will be
resolved in our favor or, if significant monetary judgments are rendered against
us, that we will have the ability to pay such judgments. Such disruptions, legal
fees and any losses resulting from these claims could have a material adverse
effect on our business, results of operations and financial
condition.




Protection of our intellectual
property is limited, and any misuse of our intellectual property by others could
materially adversely affect our sales and results of
operations.




Proprietary
technology in our software is important to our success. To protect our
proprietary rights, we plan to rely on a combination of patents, copyrights,
trademarks, trade secrets, confidentiality procedures and contractual
provisions. We do not own any issued patents and we have not emphasized patents
as a source of significant competitive advantage. We have sought to protect our
proprietary technology under laws affording protection for trade secrets,
copyright and trademark protection of our software, products and developments
where available and appropriate. In the event we are issued patents, our issued
patents may not provide us with any competitive advantages or may be challenged
by third parties, and the patents of others may seriously impede our ability to
conduct our business. Further, any patents issued to us may not be timely or
broad enough to protect our proprietary rights.





We also
have one registered trademark in the U.S. for our EPazz mark. Although we
attempt to monitor use of and take steps to prevent third parties from using our
trademark without permission, policing the unauthorized use of our trademark is
difficult. If we fail to take steps to enforce our trademark rights, our
competitive position and brand recognition may be diminished.




We plan
to protect our software, trade secrets and proprietary information, in part, by
requiring all of our employees to enter into agreements providing for the
maintenance of confidentiality and the assignment of rights to inventions made
by them while employed by us. We also enter into non-disclosure agreements with
our consultants to protect our confidential and proprietary information. There
can be no assurance that our confidentiality agreements with our employees,
consultants and other third parties will not be breached, that we will be able
to effectively enforce these agreements, have adequate remedies for any breach,
or that our trade secrets and other proprietary information will not be
disclosed or otherwise be protected. Furthermore, there also can be no assurance
that others will not independently develop technologies that are similar or
superior to our technology or reverse engineer our products.




Protection
of trade secrets and other intellectual property rights in the markets in which
we operate and compete is highly uncertain and may involve complex legal and
scientific questions. The laws of countries in which we operate may afford
little or no protection to our trade secrets and other intellectual property
rights. Policing unauthorized use of our trade secret technologies and proving
misappropriation of our technologies is particularly difficult, and we expect
software piracy to continue to be a persistent problem. Piracy of our products
represents a loss of revenue to us. Furthermore, any changes in, or unexpected
interpretations of, the trade secret and other intellectual property laws in any
country in which we operate may adversely affect our ability to enforce our
trade secret and intellectual property rights. Costly and time-consuming
litigation could be necessary to enforce and determine the scope of our
confidential information and trade secret protection. If we are unable to
protect our proprietary rights or if third-parties independently develop or gain
access to our or similar technologies, our competitive position and revenue
could suffer.













-16-










We
may incur significant litigation expenses protecting our intellectual property
or defending our use of intellectual property, which may have a material adverse
effect on our cash flow and results of operations.





If our
efforts to protect our intellectual property rights are inadequate to prevent
imitation of our products by others or to prevent others from seeking to block
sales of our products as a violation of the intellectual property rights of
others, we could incur substantial significant legal expenses in resolving such
disputes.





Our
competitors may develop similar, non-infringing products that adversely affect
our ability to generate revenues.





Our
competitors may be able to produce a software product that is similar to our
product without infringing on our intellectual property rights. Since we have
yet to establish any significant brand recognition for our product, we could
lose a substantial amount of business due to competitors developing products
similar to BoxesOS software product. As a result, our future growth and ability
to generate revenues from the sale of our product could suffer a material
adverse effect.




Claims that we misuse the
intellectual property of others could subject us to significant liability and
disrupt our business, which could materially adversely affect our results of
operations and financial condition.




Because
of the nature of our business, we may become subject to material claims of
infringement by competitors and other third-parties with respect to current or
future software applications, trademarks or other proprietary rights. Our
competitors, some of which may have substantially greater resources than us and
have made significant investments in competing technologies or products, may
have, or seek to apply for and obtain, patents that will prevent, limit or
interfere with our ability to make, use and sell our current and future
products, and we may not be successful in defending allegations of infringement
of these patents. Further, we may not be aware of all of the patents and other
intellectual property rights owned by third-parties that may be potentially
adverse to our interests. We may need to resort to litigation to enforce our
proprietary rights or to determine the scope and validity of a third party’s
patents or other proprietary rights, including whether any of our products or
processes infringe the patents or other proprietary rights of third-parties. The
outcome of any such proceedings is uncertain and, if unfavorable, could
significantly harm our business. If we do not prevail in this type of
litigation, we may be required to:




●pay
      damages, including actual monetary damages, royalties, lost profits or
      other damages and third-party’s attorneys’ fees, which may be
      substantial;
  ●expend
      significant time and resources to modify or redesign the affected products
      or procedures so that they do not infringe a third-party’s patents or
      other intellectual property rights; further, there can be no assurance
      that we will be successful in modifying or redesigning the affected
      products or procedures;
  ●expend
      significant time and resources to modify or redesign the affected products
      or procedures so that they do not infringe a third-party’s patents or
      other intellectual property rights; further, there can be no assurance
      that we will be successful in modifying or redesigning the affected
      products or procedures;
  ● obtain a
      license in order to continue manufacturing or marketing the affected
      products or processes, and pay license fees and royalties; if we are able
      to obtain such a license, it may be non-exclusive, giving our competitors
      access to the same intellectual property, or the patent owner may require
      that we grant a cross-license to part of our proprietary technologies;
      or
  ● stop the
      development, manufacture, use, marketing or sale of the affected products
      through a court-ordered sanction called an injunction, if a license is not
      available on acceptable terms, or not available at all, or our attempts to
      redesign the affected products are
unsuccessful.










Any of
these events could adversely affect our business strategy and the value of our
business. In addition, the defense and prosecution of intellectual property
suits, interferences, oppositions and related legal and administrative
proceedings in the United States and elsewhere, even if resolved in our favor,
could be expensive, time consuming, generate negative publicity and could divert
financial and managerial resources.












-17-










We expect
that software developers will increasingly be subject to infringement claims as
the number of software applications and competitors in our industry segment
grows and the functionality of software applications in different industry
segments overlaps. Thus, we could be subject to additional patent infringement
claims in the future. There can be no assurance that the claims that may arise
in the future can be amicably disposed of, and it is possible that litigation
could ensue.




Intellectual
property litigation can be complex, costly and protracted. As a result, any
intellectual property litigation to which we are subject could disrupt our
business operations, require us to incur substantial costs and subject us to
significant liabilities, each of which could severely harm our
business.





Plaintiffs
in intellectual property cases often seek injunctive relief. Any intellectual
property litigation commenced against us could force us to take actions that
could be harmful to our business, including the following:





● stop
      selling our products or using the technology that contains the allegedly
      infringing intellectual property;
 
 ●stop
      selling our products or using the technology that contains the allegedly
      infringing intellectual property;
 
 ●attempt to obtain a license to use the relevant
      intellectual property, which may not be available onreasonable terms or at
      all; and
 
 ●attempt to redesign the products that allegedly infringed
      upon the intellectual property.





If we are
forced to take any of the foregoing actions, our business, financial position
and operating results could be harmed. We may not be able to develop, license or
acquire non-infringing technology under reasonable terms, if at all. These
developments would result in an inability to compete for customers and would
adversely affect our ability to increase our revenue. The measure of damages in
intellectual property litigation can be complex, and is often subjective or
uncertain. If we were to be found liable for the infringement of a third party’s
proprietary rights, the amount of damages we might have to pay could be
substantial and would be difficult to predict.





Our
business may be negatively impacted as a result of changes in the economy and
corporate and institutional spending.





Our
business will depend on the general economic environment and levels of corporate
and institutional spending. Purchases of software may decline in periods of
recession or uncertainty regarding future economic prospects. During periods of
recession or economic uncertainty, we may not be able to maintain or increase
our sales to customers, maintain sales levels, establish operations on a
profitable basis or create earnings from operations as a percentage of net
sales. As a result, our operating results may be adversely and materially
affected by downward trends in the economy or the occurrence of events that
adversely affect the economy in general. Our operating results and margins will
be adversely impacted if we do not grow as anticipated.




We may engage in future acquisitions
or investments that present many risks, and we may not realize the anticipated
financial and strategic goals for any of these
transactions.




We do not
have significant experience acquiring companies. However, in the future we may
acquire or make investments in additional companies and have entered into a
Letter of Intent to acquire the Target Company, described above. If we acquire
or make investments in complementary companies, products, services and
technologies, the acquisitions and investments will involve a number of risks,
including:




·     
      ●we do not have experience acquiring or making investments in
      complementary companies, products, services and
    technologies;












-18-









●we may find that the acquired company or assets do not
      further our business strategy, or that we overpaid for the company or
      assets, or that industry or economic conditions change, all of which may
      generate a future impairment
charge;





·      ●we
      may have difficulty integrating the operations and personnel of the
      acquired business and may have difficulty retaining the key personnel of
      the acquired business;





·     
      ●we may have difficulty incorporating the acquired
      technologies or products with our existing product
  lines;





·      ●there may be customer confusion where our products overlap
      with those that we acquire;





●our
      ongoing business and management’s attention may be disrupted or diverted
      by transition or integration issues and the complexity of managing
      geographically and culturally diverse
locations;





·     
      ●we may have difficulty maintaining uniform standards,
      controls, procedures and policies across
  locations;





·     
      ●the acquisition may result in litigation from terminated
      employees or third parties; and





●we
      may experience significant problems or liabilities associated with product
      quality, technology and legal
contingencies.




These
factors could have a material adverse effect on our business, results of
operations and financial condition or cash flows, particularly in the case of a
larger acquisition or multiple acquisitions in a short period of time. From time
to time, we may enter into negotiations for acquisitions or investments that are
not ultimately consummated. These negotiations could result in significant
diversion of management time, as well as out-of-pocket costs.




The
consideration paid for an investment or acquisition may also affect our
financial results. If we were to proceed with one or more significant
acquisitions in which the consideration included cash, we could be required to
use a substantial portion of our available cash, including a portion of the net
proceeds of this offering. To the extent we issue shares of our capital stock or
other rights to purchase shares of our capital stock, including options or other
rights, our existing stockholders may be diluted, and our earnings per share may
decrease. In addition, acquisitions may result in the incurrence of debt, large
one-time write-offs, including write-offs of acquired in-process research and
development costs, and restructuring charges. They may also result in goodwill
and other intangible assets that are subject to impairment tests, which could
result in future impairment charges.





We
may be unable to scale our operations successfully and fail to attain our
planned growth.




Our plan
is to grow our business rapidly. Our growth, if it occurs as planned, will place
significant demands on our management, as well as our financial, administrative
and other resources. We will need to hire highly skilled personnel to effectuate
our planned growth. There is no guarantee that we will be able to locate and
retain qualified personnel for such positions, which would likely hinder our
ability to manage operations. Furthermore, we cannot guarantee that any of the
systems, procedures and controls we put in place will be adequate to support the
commercialization of our products or other operations. Our operating results
will depend substantially on the ability of our officers and key employees to
manage changing business conditions and to implement and improve our financial,
administrative and other resources. If we are unable to respond to and manage
changing business conditions, or the scale of our products, services and
operations, then the quality of our services, our ability to retain key
personnel and our business could be harmed.













-19-










RISKS
RELATED TO OUR CAPITAL STRUCTURE




THERE
IS CURRENTLY A LIMITED PUBLIC MARKET FOR OUR SECURITIES. MOVING FORWARD OUR
STOCK PRICE MAY BE VOLATILE AND ILLIQUID.





Our
securities have been approved for quotation on the Over-The-Counter Bulletin
Board (“OTCBB”) under the symbol “EPAZ”, however, there is currently only a
limited market for our securities.  If there is a market for our
common stock in the future, we anticipate that such market would be illiquid and
would be subject to wide fluctuations in response to several factors, including,
but not limited to:





(1)
            actual
      or anticipated variations in our results of operations;(2)
            our
      ability or inability to generate new revenues;(3)
            increased
      competition; and(4)
            conditions
      and trends in the market for organizational
  software.





Furthermore,
our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations, as
well as general economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations may adversely affect the
market price and liquidity of our common stock.





The
price of our common stock may be volatile.




In the
past several years, technology stocks have experienced high levels of volatility
and significant declines in value from their historic highs. The trading price
of our common stock may fluctuate substantially. These fluctuations could cause
you to lose all or part of your investment in our common stock. Factors that
could cause fluctuations in the trading price of our common stock include the
following:




● price and
      volume fluctuations in the overall stock market from time to
      time;
 
 ●significant
      volatility in the market price and trading volume of software
      companies;
 
 ●actual
      or anticipated changes in our earnings or fluctuations in our operating
      results;
 
 ●actual
      or anticipated changes in the expectations of securities
      analysts;
 
 ●announcements
      of technological innovations, new solutions, strategic alliances or
      significant agreements by us or by our
  competitors;
 
 ●general
      economic conditions and trends;
 
 ●major catastrophic
events;
 
 ●sales
      of large blocks of our stock; or
 
 ●recruitment
      or departures of key
personnel.










In the
past, following periods of volatility in the market price of a company’s
securities, securities class action litigation has often been brought against
that company. If our stock price is volatile, we may become the target of
securities litigation. Securities litigation could result in substantial costs
and divert our management’s attention and resources from our
business.












-20-










We
may experience a decline in revenue or volatility in our operating results,
which may adversely affect the market price of our common stock.




We cannot
predict our future revenue with certainty because of many factors outside of our
control. A significant revenue or profit decline, lowered forecasts or
volatility in our operating results could cause the market price of our common
stock to decline substantially. Factors that could affect our revenue and
operating results include the following:





● the
      possibility that our future customers may cancel, defer or limit purchases
      as a result of reduced information technology
  budgets;
 
 ●the
      possibility that our future customers may defer purchases of our software
      applications in anticipation of new software applications or updates from
      us or our competitors;
 
 ●the ability
      of EPAZZ or its distributors to meet their sales
    objectives;
 
 ●market
      acceptance of our new applications and
  enhancements;
 
 ●our ability
      to control expenses;
 
 ●changes in
      our pricing and distribution terms or those of our
      competitors;
 
 ●the
      demands on our management, sales force and services infrastructure as a
      result of the introduction of new software applications or updates;
      and
 
 ●the possibility that our business will be adversely
      affected as a result of the threat of terrorism or military actions taken
      by the United States or its
allies.










Our
expense levels are relatively fixed and are based, in part, on our expectations
of our future revenue. If revenue levels fall below our expectations, our net
income would decrease because only a small portion of our expenses varies with
our revenue. Therefore, any significant decline in revenue for any period could
have an immediate adverse impact on our results of operations for the period. We
believe that period-to-period comparisons of our results of operations should
not be relied upon as an indication of future performance. In addition, our
results of operations could be below expectations of public market analysts and
investors in future periods, which would likely cause the market price of our
common stock to decline.





The
President and Chief Executive officer of EPAZZ Inc. has significant influence
over our company.




Shaun
Passley beneficially owns approximately 76% of our Class A Common Stock, and
100% of our Class B Common Stock, which is entitled to 100 votes per share,
which represents 96.7% of our aggregate outstanding voting stock. Mr. Passley,
as majority shareholder, sole Director, President and Chief Executive Officer of
the Company possesses significant influence over our Company, giving him the
ability, among other things, to elect a majority of the Board of Directors and
to approve significant corporate transactions. Such stock ownership and control
may also have the effect of delaying or preventing a future change in control,
impeding a merger, consolidation, takeover or other business combination or
discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of our Company. While Mr. Passley has managed EPAZZ
since its inception, he has no other accounting or finance experience and has no
experience relating to a public company.





If securities analysts do not publish
research or reports about our business or if they publish negative evaluations
of our stock, the price of our stock could decline.




The
trading market for our common stock will rely in part on the research and
reports that industry or financial analysts publish about us or our business. If
one or more of the analysts covering us downgrade their evaluations of our
stock, the price of our stock could decline. If one or more of these analysts
cease coverage of our company, we could lose visibility in the market for our
stock, which in turn could cause our stock price to decline.










-21-










If
we are late in filing our Quarterly or Annual Reports with the SEC, we may be
de-listed from the Over-The-Counter Bulletin Board.





Pursuant
to Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely filing
of periodic reports with the SEC, any OTCBB issuer which fails to file a
periodic report (Form 10-Q's or 10-K's) by the due date of such report (not
withstanding any extension granted to the issuer by the filing of a Form
12b-25), three (3) times during any twenty-four (24) month period is
automatically de-listed from the OTCBB. Such removed issuer would not be
re-eligible to be listed on the OTCBB for a period of one-year, during which
time any subsequent late filing would reset the one-year period of de-listing.
If we are late in our filings three times in any twenty-four (24) month period
and are de-listed from the OTCBB, our securities may become worthless and we may
be forced to curtail or abandon our business plan.





In
the future, we will incur significant increased costs as a result of operating
as a fully reporting company in connection with Section 404 of the Sarbanes
Oxley Act, and our management will be required to devote substantial time to new
compliance initiatives.





Moving
forward, we anticipate incurring significant legal, accounting and other
expenses in connection with our status as a fully reporting public company. The
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and new rules subsequently
implemented by the SEC have imposed various new requirements on public
companies, including requiring changes in corporate governance practices. As
such, our management and other personnel will need to devote a substantial
amount of time to these new compliance initiatives. Moreover, these rules and
regulations will increase our legal and financial compliance costs and will make
some activities more time-consuming and costly. In addition, the Sarbanes-Oxley
Act requires, among other things, that we maintain effective internal controls
for financial reporting and disclosure of controls and procedures. In
particular, commencing this calendar 2008 (one year after we began publicly
reporting), we must perform system and process evaluation and testing of our
internal controls over financial reporting to allow management to report on the
effectiveness of our internal controls over financial reporting, and in fiscal
2009, to allow our independent registered public accounting firm to report on
the effectiveness of our internal controls over financial reporting, as required
by Section 404 of the Sarbanes-Oxley Act. Our testing, or the subsequent testing
by our independent registered public accounting firm, may reveal deficiencies in
our internal controls over financial reporting that are deemed to be material
weaknesses. Our compliance with Section 404 will require that we incur
substantial accounting expense and expend significant management efforts. We
currently do not have an internal audit group, and we will need to hire
additional accounting and financial staff with appropriate public company
experience and technical accounting knowledge. Moreover, if we are not able to
comply with the requirements of Section 404 in a timely manner, or if we or our
independent registered public accounting firm identifies deficiencies in our
internal controls over financial reporting that are deemed to be material
weaknesses, the market price of our stock could decline, and we could be subject
to sanctions or investigations by the SEC or other regulatory authorities, which
would require additional financial and management resources.




Investors
may face significant restrictions on the resale of our common stock due to
federal regulations of penny stocks.





Once our
common stock is listed on the OTC Bulletin Board, if ever, it will be subject to
the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act
as long as the price of our common stock is below $5.00 per share. Under such
rule, broker-dealers who recommend low-priced securities to persons other than
established customers and accredited investors must satisfy special sales
practice requirements, including a requirement that they make an individualized
written suitability determination for the purchaser and receive the purchaser's
consent prior to the transaction. The Securities Enforcement Remedies and Penny
Stock Reform Act of 1990, also requires additional disclosure in connection with
any trades involving a stock defined as a penny stock. Generally, the Commission
defines a penny stock as any equity security not traded on an exchange or quoted
on NASDAQ that has a market price of less than $5.00 per share. The required
penny stock disclosures include the delivery, prior to any transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
with it. Such requirements could severely limit the market liquidity of the
securities and the ability of purchasers to sell their securities in the
secondary market.














-22-










ITEM 2. UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS





None.





ITEM 3. DEFAULTS UPON SENIOR
SECURITIES.





None.





ITEM 4. SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM 5. OTHER
INFORMATION





None.





ITEM 6.
EXHIBITS





Exhibit
              No.
            Description3.1(1)
            Articles
      of Incorporation (filed March 23, 2000)3.2(1)
            Articles
      of Amendment (filed April 5, 2005)3.3(1)
            Articles
      of Amendment (filed July 12, 2005)3.4(1)
            Articles
      of Amendment (filed March 2, 2006)3.5(1)
            Statement
      of Change of Registered Agent (filed January 12, 2006)3.6(1)
            Articles
      of Amendment (filed May 17, 2006)3.7(1)
            Amended
      and Restated By-Laws4.1(1)
            Specimen
      Stock Certificate10.1(2)
            Form
      of Subscription Agreement of July 2005 Private
  Placement.10.2(3)
            Promissory
      Note with Fay  Passley10.3(3)
            Promissory
      Note with L &  F  Lawn Service, Inc.10.4(3)
            Promissory
      Note with Shaun Passley16.1(4)
            Letter
      from Malone & Bailey, PC31*
            Certificate
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232*
            Certificate
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
2002





* Filed
herewith.




(1)
            Filed
      as an Exhibit to our Form SB-2, filed with the Commission on December 4,
      2006, and incorporated herein by
reference.





(2)
            Filed
      as an Exhibit to our Form SB-2A, filed with the Commission on May 11,
      2007, and incorporated herein by
reference.





(3)
            Filed
      as an Exhibit to our Form SB-2A, filed with the Commission on September
      24, 2007, and incorporated herein by
reference.





(4)
            Filed
      as an Exhibit to our Form SB-2A, filed with the Commission on November 28,
      2007, and incorporated herein by
reference.















-23-












SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





EPAZZ,
      INC.DATED:
      May 15, 2008
            By:/s/
      Shaun
      PassleyShaun
      PassleyChief
      Executive Officer (Principal Executive Officer)and
      Principal Financial Officer












-24-