Zoom Technologies Inc. (OTC:ZOOM)

WEB NEWS

Wednesday, December 3, 2014

Auditor trail

Item 4.01   Changes in Registrant's Certifying Accountant

Effective November 28, 2014 the Company engaged TAAD LLP as the Company's independent registered public accounting firm. The engagement was approved by the Company's stockholders at the Annual Meeting of Stockholders held on November 18, 2014 and was affirmed by the Board on November 28, 2014. During the two most recent fiscal years and through the date hereof, the Company did not consult with TAAD LLP regarding either (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and no written or oral advice was provided by TAAD LLP that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue or (ii) any matter that was either the subject of a disagreement or reportable event, as set forth in Item 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K.


Wednesday, October 29, 2014

Auditor trail

Item 4.01   Change in Registrant's Certifying Accountant.


On October 27, 2014, Marcum Bernstein & Pinchuk LLP ("Marcum") notified Zoom Technologies, Inc. (the "Company") that it has resigned as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2014, effective immediately. The Audit Committee of the Board of Directors of the Company approved the resignation.

Marcum was engaged as the independent registered public accounting firm on October 8, 2012 (such period from October 8, 2012 through Marcum's resignation, the "Engagement Period"). During the Engagement Period, Marcum did not issue any reports on the Company's financial statements that contained an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

As previously reported in the Company's Current Report on Form 8-K filed on August 27, 2014 (the "August 2014 8-K"), on June 23, 2014, the Company was notified by Marcum that Marcum had received from the Chief Executive Officer of Tinho Union Holding Group ("Tinho"), a former potential acquisition target of the Company, an audio recording of telephone conversations between the Chief Financial Officer of the Company and the Chief Executive Officer of Tinho. The recording contained certain statements about the Company and certain of its officers and directors that Marcum requested the Company's management and Board of Directors to address. On June 25, 2014, the Company's Board formed a Special Committee, consisting of three independent directors, to conduct a voluntary internal review of the statements in the audio recording, and it retained Dorsey & Whitney LLP as legal counsel and FTI Consulting, Inc. as forensic expert to assist the Special Committee to conduct the voluntary internal review. As of the date of this report, the voluntary internal review is still ongoing; no conclusions have been made by the Special Committee.

As disclosed in the August 2014 8-K, on August 15, 2014, the Company delayed the filing of its Quarterly Report for the period ended June 30, 2014 (the "June 30, 2014 10-Q") because the ongoing nature of the internal review could impact the Company's results for the reporting period and/or prior periods. Additionally, in the course of the internal review, it was brought to the Company's attention that certain changes were made to an existing trust arrangement under which approximately RMB120 million of cash assets (the "Trust Assets") of Jiangsu Leimone Electronics Co., Ltd. ("Jiangsu Leimone"), one of the Company's subsidiaries, was placed in trust with New Times Trust Co., Ltd. By the terms of the trust documents, as amended, the Trust Assets were loaned out to Jingdong Weiye Technologies Co. Ltd., and such loan, including any interest on the outstanding principal, becomes due in full upon the termination of the trust arrangement in March and May 2015, unless earlier terminated. As of September 17, 2014, the Trust Assets were repaid, the trust arrangement was terminated, and the amount of RMB68 million was deposited into a bank account for Jiangsu Leimone. The balance of the Trust Assets, or RMB52 million, was repaid to Beijing Zhumu Culture Communication Company, Ltd. ("BZCC") in connection with a credit due to BZCC relating to the Company's sale of its subsidiary, Tianjin Tong Guang Group Digital Communication Co., Ltd. The Company is evaluating the impact of these changes and will further describe and reflect any material changes to the Company's business or results of operations in its June 30, 2014 10-Q. Separately, the Company will make a decision as to whether any remedial action, such as any changes to the Company's internal control over financial reporting or disclosure controls and procedures, will be necessary after the internal review is completed. Marcum has advised the Company that until the Company's internal review is completed, Marcum is unable to complete its review of the Company's financial results for the quarterly period ended June 30, 2014, or ascertain the impact, if any, on the Company's financial statements for the fiscal years ended December 31, 2012 and 2013 and the quarterly period ended March 31, 2014.

During the years ended December 31, 2012 and December 31, 2013 and through the Engagement Period: (i) there were no disagreements between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures which, if not resolved to Marcum's satisfaction, would have caused Marcum to make reference in connection with Marcum's opinion to the subject matter of the disagreement; and (ii) there were no reportable events as the term is described in Item 304(a)(1)(v) of Regulation S-K, except (a) for the matters described in the preceding two paragraphs, and (b) that Marcum advised the Company of the existence of material weaknesses in the Company's internal control over financial reporting, as disclosed in Item 9A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed on May 23, 2014. The Company has authorized Marcum to respond to any inquiries of the above-referenced matters by its successor accountant, once such successor is engaged.

On October 29, 2014, the Company provided Marcum with a copy of the disclosures that the Company is making in response to Item 4.01 on this Form 8-K, and requested that Marcum furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements and, if not, stating the respects in which it does not agree. The Company has filed a copy of such letter as exhibit 16.1 to this Current Report.


Thursday, September 18, 2014

Investor Alert

NEW YORK, Sept. 17, 2014 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (ZOOM) (the "Company" or "Zoom") announced today that it intends to seek a voluntary delisting from the NASDAQ Capital Market.

The voluntary decision to delist from NASDAQ was taken following the Board of Director's detailed review of numerous factors, including: the Company's inability to timely file its periodic reports with the Securities Exchange Commission (the "SEC") and a letter from Nasdaq dated August 20, 2014 regarding the same, and the likelihood that the Company no longer qualifies as an operating company and therefore no longer meets the requirements to remain a Nasdaq-listed company. Based on the foregoing factors, the Company no longer sees sufficient value in maintaining its listing on NASDAQ.

The Company intends to file with the SEC a Form 25, Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, on or about September 27, 2014 to commence the Nasdaq delisting process. It is expected that the delisting will take effect as of the close of trading on October 7, 2014. Following delisting, the Company anticipates that its common stock will be quoted in the over-counter OTC Pink marketplace, a centralized electronic quotation service.


Wednesday, August 27, 2014

Investor Alert

BEIJING, Aug. 26, 2014 (GLOBE NEWSWIRE) -- On August 20, 2014, Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company") received a Nasdaq Staff Deficiency Letter indicating that, as a result of the Company not timely filing its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the "2014 Q2 Report"), the Company failed to comply with the periodic filing requirements for continued listing set forth in Rule 5250(c)(1) of the Nasdaq Listing Rules. In accordance with Nasdaq Listing Rule 5101, Nasdaq has provided the Company until September 18, 2014 to submit a plan to regain compliance. The Company expects to file its 2014 Q2 Report in short order, and fully expects to be able to meet the September 18, 2014 deadline.


Acquisition Activity

Item 2.01 Completion of Acquisition or Disposal of Assets.

As previously disclosed in Zoom Technologies, Inc.'s (the "Company") Quarterly Report on Form 10-Q for the period ended March 31, 2014, on May 31, 2014, the Company's board of directors decided that it would explore the sale of its remaining operating asset, SpreadZoom Technologies Co. Ltd. ("SpreadZoom"). On May 14, 2014, the Company entered into a Share Transfer Agreement with Tianjin Huatianli Trading Co., Ltd. ("Huatianli"), the acquirer of the Company's former subsidiary, Tianjin Tong Guang Group Digital Communication Co., Ltd ("TCB Digital"), to sell the Company's 47.4% interest (the "Asset") in SpreadZoom to Huatianli. Pursuant to the agreement, the final purchase price for the Asset should be agreed upon at a later date upon the completion of a third party appraisal; however, the purchase price would be no less than RMB 20 million. In connection with the proposed transaction, on May 6, 2014, Huatianli paid the Company a refundable deposit of RMB2 million. On June 11, 2014, the transfer of the Company's equity in SpreadZoom was recorded with the relevant PRC authorities.

Pursuant to the agreement, the closing of the Asset sale is subject to certain closing conditions, including the determination and payment of a final purchase price, and the agreement is subject to termination in the event that the parties fail to agree on a final purchase price. Notwithstanding the foregoing, as of May 14, 2014, the date of the share transfer agreement, the Company transferred control of SpreadZoom's operations to Huatianli, and the Company is no longer operating SpreadZoom. The Company is currently evaluating whether the Quarterly Report on Form 10-Q for the period ended June 30, 2014 (the "June 30, 2014 10-Q") will include operating results for SpreadZoom.


Wednesday, July 9, 2014

Acquisition Activity

Item 8.01.     Other Events.

As reported on a Current Report on Form 8-K filed on January 15, 2014, on January 13. 2014, Zoom Technologies, Inc. (the "Company") entered into a non-binding Letter of Intent (the "LOI") with Tinho Union Holding Group ("Tinho"), pursuant to which the Company would acquire all the issued and outstanding shares of Tinho and Tinho would become a wholly owned subsidiary of the Company. On June 30, 2014, the LOI expired on its terms. No definitive agreement or transaction has been entered into with Tinho.


Monday, June 23, 2014

Comments & Business Outlook

BEIJING, June 20, 2014 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM, the "Company") today announced it has regained compliance with The Nasdaq Stock Market's periodic filing requirements for continued listing under Listing Rule 5250(c)(1).


Friday, June 20, 2014

Investor Alert

Item 3.01.     Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On June 17, 2014, Zoom Technologies, Inc. (the "Company") received a letter from the NASDAQ Stock Market ("Nasdaq") indicating that, in light of the Company's May 23, 2014 filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and the June 16, 2014 filing of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, Nasdaq had determined that the Company had regained compliance with the periodic filing requirements for continued listing set forth in Nasdaq Listing Rule 5250(c)(1).


Tuesday, May 27, 2014

Investor Alert

Item 3.01.     Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On May 27, 2014, Zoom Technologies, Inc. (the "Company") issued a press release announcing that, on May 21, 2014, the Company received a Nasdaq Staff Deficiency Letter indicating that, as a result of the Company not timely filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, the Company failed to comply with the periodic filing requirements for continued listing set forth in Rule 5250(c)(1) of the Nasdaq Listing Rules. In accordance with Nasdaq Listing Rule 5810(c)(2), Nasdaq has provided the Company until June 16, 2014 to submit a plan to regain compliance. The Company expects to be able to meet that deadline. The full text of the press release is set forth in Exhibit 99.1 attached hereto.


Friday, May 23, 2014

Comments & Business Outlook

 ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

      FOR THE YEAR ENDED
      DECEMBER 31,
      2013     2012
            (Restated)
Net revenues   $   $
Cost of sales        
     Gross profit        
             
Selling, general, and administrative expenses     2,882,051      10,290,461 
             
Loss from operations     (2,882,051)     (10,290,461)
             
Other income and (expenses)            
     Interest income     316     
     Interest expense     (153,199)     (120,738)
     Change in fair value of warrants     6,963      843,501 
     Equity method net investment loss     (926,373)     (3,840)
     Other expense, net      (6,312)     (1,526)
Other (expense) income, net     (1,078,605)     717,397 
             
Loss before income taxes for continuing operations     (3,960,656)     (9,573,064)
             
Income taxes for continuing operations     191,414      190,845 
             
Loss from continuing operations     (4,152,070)     (9,763,909)
             
Discontinued Operations:            
Loss from discontinued operations, net of tax     (23,149,034)     (11,178,671)
Loss on disposal, net tax     (16,354,593)     (11,860,025)
Loss from discontinued operations     (39,503,627)     (23,038,696)
             
Net loss   $ (43,655,697)   $ (32,802,605)
             
less: Loss attributable to noncontrolling interest     (4,794,010)     (350,094)
             
     Net loss attributable to Zoom Technologies, Inc.   $ (38,861,687)   $ (32,452,511)
             
             
Basic and diluted loss per common share from continuing operations:            
     Basic   $ (1.39)   $ (3.60)
     Diluted   $ (1.39)   $ (3.60)
             
Basic and diluted loss per common share from discontinued operations:            
     Basic   $ (11.66)   $ (8.36)
     Diluted   $ (11.66)   $ (8.36)
             
Basic and diluted loss per common share            
     Basic   $ (13.05)   $ (11.96)
     Diluted   $ (13.05)   $ (11.96)
             
Weighted average common shares outstanding:            
     Basic     2,976,933      2,714,471 
     Diluted     2,976,933      2,714,471 
             
Amounts attributable to Zoom Technologies, Inc. common shareholders            
Loss from continuing operations     (4,152,070)     (9,763,909)
Loss from discontinued operations     (34,709,617)     (22,688,602)
Net loss attributable to Zoom Technologies, Inc.   $ (38,861,687)   $ (32,452,511)

Management Discussion and Analysis

Results of Operations for the years ended December 31, 2013 and 2012:


Discontinued Operations

On December 31, 2012, the Company announced the Subsidiary Sale, and on July 15, 2013, the Company has written off its investment on Portables, all as discussed in more detail above. Additionally, during the fourth quarter of the year ended December 31, 2013, management determined that the Company's former 50.1% equity interest investment in Portables Unlimited, LLC ("Portables"), was incorrectly accounted for using the consolidation method. As such, the Company's results of operations for the fiscal years ended December 31, 2013 and 2012 provided herein only reports revenue from continuing operations. Revenue and expenses for the discontinued operations of Portables, Ever Elite, Nollec, Profit Harvest, CDE and TCB Digital are reported in Note 20 to the accompanying financial statements in this report.


Revenues

Zoom's revenue from continuing operations were $0 and $0 (as restated) for 2013 and 2012. The Company is restructuring its businesses and has disposed of its operating subsidiaries; accordingly, the results of operations do not provide for any revenue derived from continuing operations.


Net loss

For 2013, Net loss was $43,655,697 as compared to $32,802,605 (as restated) for 2012. Zoom experienced material losses as a result of its decision to discontinue and dispose of its operations in the US, PRC, and Hong Kong. The Company incurred loss on disposal of $16,354,593 for the dispositions of Ever Elite, Nollec, and Portables. The Company wrote off an outstanding accounts receivable owed to TCB Digital by Gohigh Data Networks Technology Co., Ltd ("Gohigh") in the amount of $24,084,239; the bad debt was included in its results from discontinued operations; as of December 31, 2013, and for the period then ended, the Company and its subsidiaries ceased doing business with Gohigh and made numerous unsuccessful efforts to recover the amounts owed by Gohigh. Accordingly, the Company recognized a 100% reserve for bad debt related to this former customer.


Friday, May 9, 2014

Investor Alert

Item 4.02.     Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.


On May 5, 2014, management of Zoom Technologies, Inc. (the "Company"), as authorized by the Audit Committee of the Board of Directors of the Company, concluded that the consolidated balance sheet and related consolidated statements of operations, comprehensive income/(loss), stockholders' equity and cash flows included in its Annual Report on Form 10-K, filed on April 15, 2013 (the "2012 Financials") will need to be restated as a result of the Company's erroneous application of the consolidation method of accounting for its former 50.1% equity interest investment in Portables Unlimited, LLC ("Portables"). The previously filed financial statements listed above should no longer be relied upon. The Company has discussed with its independent registered accounting firm, Marcum Bernstein & Pinchuk LLP ("Marcum"), regarding this issue.

As previously reported on a Current Report on Form 8-K filed on April 18, 2014 (the "April 18 8-K"), the Company's management determined that the Company's former investment in Portables was incorrectly accounted for in the 2012 Financials by using the consolidation method and should instead have been accounted for using the equity method. The error resulted in an overstatement of the total assets, total liabilities, net revenues, cost of sales, operating expenses, and operating income in the previously filed consolidated financial statements. The Company did not demonstrate that it had a controlling interest over the investment, but rather, the Company only exercised substantive participating rights; accordingly, the Company should have used the equity method of accounting to account for its former investment in Portables.

Since the filing of the April 18 8-K, management has further determined that although net loss and related loss per share for the year ended December 31, 2012 would be unaffected by such changes, the effect of the corrections on other line items were material, on an individual line item basis, to the Company's previously reported financial statements. As a result, the Company intends to restate the 2012 Financials in its upcoming Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the "2013 Annual Report"). Additionally, Marcum's audit report for the fiscal year ended December 31, 2013, to be included in the 2013 Annual Report, will reflect the restatement of the 2012 Financials.


Monday, April 21, 2014

Investor Alert

Item 3.01.     Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.


On April 14, 2014, Zoom Technologies, Inc. (the "Company") received a letter from The NASDAQ Stock Market ("Nasdaq") that it had determined that, in light of the Company's appointment of Xinyue Jasmine Geffner on March 26, 2014, as previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the "SEC") on March 27, 2014, the Company has regained compliance with the audit committee requirements for continued listing set forth in Nasdaq Listing Rule 5605(c)(2).

On April 15, 2014, the Company received a Nasdaq Staff Deficiency Letter (the "Deficiency Letter") indicating that, as a result of the Company not timely filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the "Annual Report"), the Company failed to comply with the periodic filing requirements for continued listing set forth in Rule 5250(c)(1) of the Nasdaq Listing Rules. In accordance with Nasdaq Listing Rule 5810(c)(2), Nasdaq has provided the Company until June 14, 2014 to submit a plan to regain compliance. The Company expects to be able to meet that deadline. The Company intends to separately issue a press release notifying the public of the Deficiency Letter promptly after the filing of this Current Report on Form 8-K.


Item 8.01. Other Events

Correction of Error

During the fourth quarter of the year ended December 31, 2013, management determined that the Company's former 50.1% equity interest investment in Portables Unlimited, LLC ("Portables"), was incorrectly accounted for using the consolidation method. The Company will prospectively correct errors in its consolidated financial position as of December 31, 2012, and its results of operations, changes in stockholders' equity, and cash flows for the year then ended. The Company's previous consolidated financial statements overstated the Company total assets and total liabilities by including all of the assets and liabilities of Portables; additionally, the Company's prior results of operations included all revenues, cost of sales, operating expenses, and net other income/(expenses) from Portables. Results of operations from Portables will be disaggregated from the Company's consolidated results of operations on an individual line item basis, and will be carried as part of investment income (loss) with the Company's other equity method investments. Net loss for the year ended December 31, 2012, and related loss per share are unaffected by these restatements. Net increase in cash for the period ended December 31, 2012 will be lower than as stated in prior fillings, as the Company's ending cash position on its consolidated balance sheet at December 31, 2012 will not include cash in Portables' accounts.

Given that the Company has completely written off its investment in Portables as July 15, 2013, and the net loss, and related loss on a per share basis for the year ended December 31, 2012 remained unchanged, the Company has determined that the effect of these corrections was not considered material to any of the Company's previously reported financial statements, and the Company intends to make these corrections in its upcoming Annual Report for the fiscal year ended December 31, 2013 and in future filings with the SEC.

The Company's delinquency in filing its Annual Report for the fiscal year ended December 31, 2013, as in Item 3.01 above, is related to the unexpected contribution of time necessary to recast and review its prior financial statements for the above-referenced changes. The Company expects to complete its Annual Report shortly, and make best efforts to regain compliance with Nasdaq's continued listing requirements by filing a plan that includes improved internal controls over financial reporting in order to mitigate the risk of such issue occurring again in the future.


Monday, March 24, 2014

Investor Alert
Item 3.01.     Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

As previously disclosed in the Current Report on Form 8-K filed by Zoom Technologies, Inc. (the "Company") with the Securities and Exchange Commission on February 27, 2014, Cheng Wang resigned as a director of the Company, effective February 21, 2014. On March 12, 2014, the Company received a Nasdaq Staff Deficiency Letter indicating that, as a result of Mr. Wang's resignation, the Company failed to comply with the audit committee requirements for continued listing set forth in Rule 5605 of the Nasdaq Listing Rules. Nasdaq Listing Rule 5605(c)(2) requires that the Company have an audit committee comprised of at least three members who meet the qualifications set forth in such rule. With the resignation of Mr. Wang, the Company's audit committee currently consists of only two independent directors. In accordance with Nasdaq Listing Rule 5605(c)(4), Nasdaq has provided the Company with a cure period (the "Cure Period"), until the earlier of (i) the Company's next annual shareholders' meeting, (ii) August 20, 2014, if the next annual shareholders' meeting is held before August 20, 2014, or (iii) February 21, 2015, in order to regain compliance.

Once the Company became aware of this violation, it immediately began taking steps to identify a new director candidate to replace Mr. Wang to regain compliance with Nasdaq Listing Rule 5605(c)(2). The Company is in the process of selecting a suitable candidate and expects to regain compliance with Nasdaq Listing Rule 5605 within the Cure Period.


Thursday, January 16, 2014

Acquisition Activity

BEIJING, Jan. 15, 2014 (GLOBE NEWSWIRE) -- On January 13, 2014, Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company") entered into a Letter of Intent (the "LOI") with Tinho Union Holding Group ("Tinho") to acquire all the outstanding shares of Tinho by issuing approximately 9.4 million new shares of the Company's common stock at a valuation of $8.6505 per share to the shareholders of Tinho (the "Transaction").

Upon closing of the Transaction, the current shareholders of Tinho would own approximately 75% of Zoom's ownership interest. The Transaction is subject to shareholder approval by both parties and other closing conditions. Among other conditions in the LOI, Tinho has agreed to make good provisions of after tax net income of RMB 50 million (USD $8.2 million) and RMB 68 million (USD $11.1 million), using current exchange rates, for the years ended December 31, 2013 and 2014, respectively, on half of the consideration shares. The LOI calls for the Company to have $27 million of cash in its accounts at the time of closing, and provides for the Company to use the cash for initiatives if such initiatives are approved by a majority of the independent directors. The LOI also contains a binding exclusivity clause, which will commence on January 15, 2014, pursuant to which the Company and Tinho have committed to obtaining the approval of the Transaction during the exclusivity period.

Tinho is a B2B e-commerce platform provider for the travel industry in China. Tinho's innovative platform aggregates and streamlines a vast inventory of travel products, including air, hotels, car rentals, and vacation packages from travel service providers worldwide to enable customers to easily and accurately find the best deals in real-time. Tinho also provides full-service, customized travel solutions to corporate clients. Tinho delivers its platform through its website (www.thlm.com.cn), a franchise model, a direct-sale model and 24-hour toll-free call centers. Founded in 2009, Tinho is headquartered in Shenzhen, China with over 200 employees.

Maxim Group LLC is acting as the Company's financial advisor in connection with the Transaction.

On January 4, 2013, the Company sent notice to Beijing Baifen Tonglian Information & Technology Co., Ltd. ("Baifen") of the termination of the previous Letter of Intent between Zoom and Baifen, dated November 21, 2013. The termination was made within the 45 day "Shop Period", during which Zoom had the right to seek other potential targets and terminate the Letter of Intent. Zoom's independent board members voted in favor of entering into a LOI with Tinho instead of proceeding with the transaction with Baifen because it believed the terms and conditions offered by Tinho's shareholders were considered superior to those offered by Baifen.

Please refer to the Company's Form 8-K filed with the U.S. Securities and Exchange Commission on January 15, 2014 for further details regarding the Transaction and copy of the LOI.


Thursday, January 2, 2014

Comments & Business Outlook

BEIJING, Dec. 31, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) ("Zoom" or the "Company") announced it has agreed to the assignment by Beijing Zhumu Culture Communication Company, Ltd. ("Zhumu") to Tianjin Huatianli Trading Co., Ltd. ("Huatianli") for the right to purchase the Company's interest in Tianjin Tongguang Group Digital Communication Company, Ltd. ("TCBD").

On December 31, 2012, Zoom entered into a Share Purchase Agreement (the "Share Purchase Agreement") with Zhumu for the sale of certain of the Company's China-based operations, including its wholly owned subsidiaries Ever Elite Corporation Limited ("Ever Elite"), Beijing Nollec Wireless Company ("Nollec"), Profit Harvest Corporation, Ltd. ("Profit Harvest"), Celestial Digital Entertainment, Ltd. ("CDE"), and 80% ownership of TCBD. The aggregate purchase price for the sale of these operations was RMB200 million (the "Purchase Price").

To date, Zhumu has finalized its acquisition of Ever Elite, Nollec, Profit Harvest, and CDE. On December 30, 2013, Zhumu assigned its purchase right of TCBD to a new purchaser, Huatianli.

On December 30, 2013, Zoom consented to the assignment between Zhumu and Huatianli and agreed to amend the Share Purchase Agreement to reflect the change. In connection with the assignment, RMB120 million, representing the balance of the Purchase Price that was being held in escrow pending the closing of all of the sales under the Share Purchase Agreement, was going to be released within 10 business days to a Company-designated bank account. Of that amount, approximately RMB 68 million is available for the Company's immediate use, and approximately RMB52 million, representing the purchase price for TCBD, will be monitored by Huatianli until the closing of the TCBD sale.


Tuesday, December 3, 2013

Comments & Business Outlook

Third Quarter 2013 Financial Results:

  • No Revenues.
  • Basic and diluted (loss) income per common share was $(4.70) s. last years $ 0.26.

The Company recorded material losses at the end of the third quarter of 2013 as a result of the loss of its ownership interest in Portables Unlimited, LLC ("Portables"). If the Company was to maintain its ownership in Portables, it would have had to deploy more capital. The Company performed a comprehensive analysis, and then decided against investing further in Portables. The Company's strategy moving forward is to invest in mobile advertising and technology based businesses with high expected futures earnings growth.


Friday, November 29, 2013

Acquisition Activity

BEIJING, Nov. 27, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company") is a technology holding company focused on the mobile telecommunications and technology space. On November 21, 2013, the Company entered into a Letter of Intent (the "LOI") with Beijing Baifen Tonglian Information & Technology Co., Ltd. ("Baifen") to acquire, directly or indirectly, all the outstanding shares of Baifen. In connection with this transaction, Zoom will issue to Baifen's shareholders 12 million new shares of the Company's common stock representing approximately 80% of Zoom's ownership interest post-transaction. The transaction is subject to shareholders approvals by both parties and other closing conditions. The LOI also provides that during the exclusivity period, which will commence on January 6, 2014 and will end as of the earlier of (i)(x) May 31, 2014 or (y) the time all parties agree in writing that they no longer desire to pursue the proposed transaction or (ii) execution of a definitive agreement, if either party withdraws from the proposed transaction, such party may owe the other party a US$3 million dollar break-up fee, subject to certain conditions. There is no assurance that the proposed transaction will be consummated.

Baifen is one of China's leading providers of mobile advertising services. It is one of the leaders in one-stop enterprise mobile marketing platforms and services that include: applications, mobile name cards, QR codes, text and multimedia messages, and WeChat/Weibo platforms for corporate accounts. Baifen's sales network consists of both channel sales and direct sales. Baifen's channel network includes over 400 partners and Baifen's customer base includes certain Fortune 500 enterprises.

Mr. Lei Gu, Chairman and CEO of Zoom had the following to say about the anticipated transaction. "We have searched long and hard for fast growing businesses that can maximize value for Zoom's shareholders. We believe we have finally found the right match. Baifen has a good business model with sustainable growth. We can grow Zoom's business together with Baifen. Baifen has enviable margins and a scalable business. We are truly excited for the shareholders of Zoom. Baifen has a clear vision to maintain its position as a top player in the mobile advertising space. "


Friday, November 22, 2013

Investor Alert
 Item 4.02   Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On November 19, 2013, an email transmitted to the Company by Marcum Bernstein & Pinchuk LLP ("Marcum"), the Company's independent registered public accounting firm, indicated that the Company's previously issued unaudited financial statements for the period ended September 30, 2013 could not be relied on because they were not reviewed by an independent registered public accounting firm in accordance with Statement on Auditing Standards No. 100, Interim Financial Information ("SAS 100"). On November 19, 2013, the Company accidentally authorized filing of the form 10-Q for the period ended September 30, 2013 (the "Original 10-Q") prior to completion of the review by Marcum.

The financial statements included in the Original 10-Q is currently being reviewed by Marcum in accordance with SAS 100 and the Company will file any necessary amendments to the Form 10-Q with reviewed financial statements as soon as possible.

The executive officers of the Company discussed with Marcum the matters disclosed in this Item 4.02 of this Form 8-K/A and have requested our independent accountant to furnish us as promptly as possible a letter addressed to the Commission stating whether the independent accountant agrees with the statements made in this Form 8-K/A in response to this Item 4.02 and, if not, to state the respects in which it does not agree. We received a response letter from Marcum on November 21, 2013, which is filed as Exhibit 16.1 herein.


Tuesday, August 20, 2013

Comments & Business Outlook

Second Quarter 2013 Results

  • Revenue for the second quarter of 2013 was $6.76 million a decrease of $4.93 million, or 42.1%, from $11.69 million for the same quarter last year.
  • The company reported a loss per share of $0.02, compared to a loss of $0.03 for the same quarter 2012.

Mr. Lei Gu, Chairman & CEO of ZOOM had the following to say about the second quarter. "We are glad to see that the U.S. economy is growing and T-Mobile USA's renewed strategy is positively affecting Portables operating results. We also believe that the Portables management team has done a great job of trimming costs and improving margins. In China we need to continue to work quickly to complete the sales of our assets so that we can put more money to work in new opportunities."


Tuesday, July 16, 2013

CFO Trail
 Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 15, 2013, Anthony K. Chan resigned as a member ("Director") of the Board of Directors ("Board") of Zoom Technologies, Inc. (the "Company") and also resigned from the position of Chief Financial Officer. Mr. Chan did not resign from the Company as a result of any disagreements with the Company on any matter relating to the Company's operations, policies or practices.

On July 15, 2013, the Board elected Mr. Patrick Wong to replace Mr. Chan as a Director until the next annual meeting or special meeting convened for the purpose of electing directors or until such time as Mr. Wong is replaced by a successor.

The Board also appointed Mr. Wong to fill the positions of Chief Financial Officer ("CFO"), Corporate Secretary, and Principal Accounting Offer of the Company.

Prior to Mr. Wong's election to the Board and appointment as the CFO, he has served in the capacity of the Company's Vice President of Finance since February 2012. Mr. Wong is a Certified Public Accountant and a Chartered Accountant.


Friday, May 31, 2013

Comments & Business Outlook

BEIJING, May 31, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company"), today announced that it has received notice from NASDAQ dated May 29, 2013 that the Company is eligible for an additional 180 calendar days, or until November 25, 2013, to regain compliance regarding the minimum $1 bid price per share requirement.


Tuesday, May 21, 2013

Comments & Business Outlook

First Quarter 2013 Financial Results

  • Net revenue of $7.4 million from continuing operations, down 54.2% from $16.1 million as compared to the first quarter of 2012.
  • Net loss during the first quarter of 2013 was $1.5 million compared to net profit of $0.5 million in the same quarter of 2012.
  • Basic and diluted (loss) income per common share was $(0.05) compared to last years earnings of $0.02.

Mr. Lei Gu, Chairman & CEO of ZOOM issued the following mandate to his management team: "We need to work quickly to complete the sale of our assets, improve the results of our existing continuing operations, and invest in opportunities where we can add value to our acquisition targets. We must drive profits to our bottom line."

For the first quarter of 2013, ZOOM reported weak performance as a result of a sluggish economy and also that more desirable handsets did not arrive into the T-Mobile product line-up within the quarter. Management believes that operational results should noticeably improve after March 31, 2013 due to a combination of the availability of coveted models, including the iPhone5 in April 2013, and the roll out by T-Mobile of new pricing programs for cellular usage. Also, Zoom's internal restructuring should be completed within the first half of 2013, and the Company will be better positioned to return to profitability.


Wednesday, October 10, 2012

Auditor trail
Item 4.01   Changes in Registrant's Certifying Accountant

Effective October 8, 2012, Zoom Technologies, Inc. (the "Company") dismissed Goldman Kurland Mohidin, LLP as our independent registered public accounting firm and appointed Marcum Bernstein & Pinchuk LLP as our new independent registered public accounting firm. The audit committee of our board of directors approved the termination of Goldman Kurland Mohidin, LLP and the appointment of Marcum Bernstein & Pinchuk LLP as the Company's new independent registered public accounting firm.

Goldman Kurland Mohidin, LLP's report on the financial statements of the Company for the fiscal years ended December 31, 2011 and 2010 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

During the fiscal years ended December 31, 2011 and 2010 and through September 30, 2012, there have been no disagreements with Goldman Kurland Mohidin, LLP (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Goldman Kurland Mohidin, LLP, would have caused it to make reference thereto in its report.


Tuesday, August 21, 2012

Comments & Business Outlook

Second Quarter 2012 Highlights:

  • Revenue increased 71.3% over same quarter last year to $98.6 million from $57.6 million
  • Net income was $0.4 million compared to net income in same quarter last year of $1.5 million and net income of $0.6 million from the first quarter of 2012.
  • Basic and diluted earnings per common share is $0.02 from 2nd quarter 2011 figure $0.09.

Mr. Lei Gu, Chairman & CEO of ZOOM, provided the following insight. "Our growth in sales revenue reflects the execution of our plan to sell more whole phones, with particular emphasis on our branded products. As we continue to grow our sales, we will continue to expand our gross profit. We believe that our increased revenues are reflective of customers' increased receptivity of our comprehensive ODM (original design and manufacturing) solutions, and our increased brand recognition." Chairman Gu also pointed out that our increased revenues are indicative of our staying power not only as a manufacturer, but as a recognizable brand.

Looking ahead, Chairman Gu remarked, "As seen in our second quarter performance of 2012, we have begun executing the shift in our business from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions on ODM basis. We will remain diligent in developing our ZOOM and Leimone brand products, as well as securing ourselves as a prominent ODM manufacturer in China."


Wednesday, June 27, 2012

Comments & Business Outlook

BEIJING, June 27, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM), a leading China-based manufacturer of mobile phones and other mobile electronic products, today announced that the company has signed an agreement with Viettel Mobile of Vietnam for original design and manufacturing (ODM) of mobile phones, and for Zoom to provide technical support to Viettel to set up its first R&D center and manufacture facility for mobile phones in Vietnam. The agreement includes Viettel placing an initial order of 400,000 units of ODM phones.

Headquartered in Hanoi, Viettel is the largest mobile operator in Vietnam capturing over 40% of the local market. Viettel is also among of the fastest growing telecom operators in the world with annual revenues doubling for each of five consecutive years from 2005 to 2010. Viettel currently has operations in six markets in Asia, Latin America and Africa, covering a total population of nearly 170 million people. In 2011, Viettel's revenue reached US$ 6 billion with 60 million subscribers worldwide.

Engineering teams from Zoom and Viettel will be working closely to design and manufacture the right handsets for the Vietnamese market and beyond. Eventually, the phones will be manufactured locally while Zoom is looking forward to continuing to supply more advanced products such as the Android-based smart phones for Viettel's markets. The initial order of 400,000 units will be designed and manufactured by Zoom using the Spreadtrum 6620 chip set, and delivery is expected to begin in July 2012.


Tuesday, June 5, 2012

Comments & Business Outlook

BEIJING, June 5, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) a leading China-based manufacturer of mobile phones and other mobile electronic products, today announced that the company has received significant orders from Micromax of India and Maxtron of Indonesia for original design and manufacturing (ODM) of mobile phones.

ZOOM has secured an order from Micromax, the number one domestic mobile phone brand in India, for 450,000 units in total of two models of GSM feature phones. Approximately half of the order will be delivered in the month of June 2012 and the other half within this summer. These two Micormax models are based on the Spreadtrum 6620 chipset. ZOOM is looking forward to producing up to 500,000 units per month for this prime customer from India.

Almost concurrently, an order is placed by Maxtron, the second largest domestic mobile brand of Indonesia. This purchase order calls for 100,000 units of 2.5G GSM feature phones, also divided into two models, based on the more advanced Spreadtrum 6800 chipset. 50,000 units have already been delivered as of the date of this press release, and the second batch is scheduled for delivery in June. If this initial order goes smoothly, ZOOM is expecting Maxtron's order to increase to 100,000 units per month.

Mr. Lei Gu, Chairman & CEO of ZOOM, remarked: "We are thrilled to win such large orders from the top level mobile brands of these countries. This is indeed a testimony of our design and manufacturing capabilities, and a recognition that ZOOM is among the best mobile handset ODM anchors of China."


Tuesday, May 22, 2012

Comments & Business Outlook

First Quarter 2012 Results

  • For the first quarter of 2012, Zoom generated net revenue of $90.9 million, up 55.1% over $58.6 million for the first quarter 2011
  • Net income was $0.6 million compared to net income in same quarter last year of $1.8 million and net loss of -$2.0 million from the fourth quarter of 2011.
  • EPS of $0.03 vs $0.11 in prior year first quarter

Mr. Lei Gu, Chairman & CEO of ZOOM, provided the following insight. "The continued growth in the sales of our Leimone brand phones in 2012 is a testament to the strength in our vertically integrated business model that includes design, manufacturing, and distribution. We will continue to put our efforts in developing both the Leimone and ZOOM brands by designing high quality reliable products coupled with extensive post-sales support to both our customers and the ultimate end users of our products. Our ability to provide integrated solutions to our customers has and will enable us to gain market share and secure contracts with tier one global customers such as mobile phone carriers or the largest distributors in countries across the developed and developing world."

Looking ahead, Mr. Gu remarked, "As seen in our first quarter performance of 2012, we have begun executing on the shift in our business from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions on ODM (original design and manufacturing) basis for more prominent customers in Asia and the continued development of our own ZOOM and Leimone brand products. We have returned to profitability in the first quarter of 2012 and will continue to manage our costs to bring healthy profits to our bottom line."


Monday, April 16, 2012

Comments & Business Outlook

Fourth Quarter 2011 Results

  • Revenue increased 60.6% over same quarter last year to $139.0 million
  • Net loss of $2.01 million from net income in same quarter last year of $5.10 million
  • Net loss in the quarter resulted from lowered margins in the EMS sector, increased R&D expenditures, one-time acquisition related expenses and impairment of goodwill
  • Fourth quarter loss per share of ($0.17) vs EPS of $0.30 in prior year quarter

Mr. Lei Gu, Chairman & CEO of Zoom explained, "The sales results of our Leimone brand phones in 2011 is testimony to the strength in our own design and manufacturing. We look forward to continuing this trend in gaining market share by our branded products, and at the same time more OEM customers are relying on us for whole phone design work as well. We anticipate picking up significant volumes of contracted ODM - original design and manufacturing work, from large customers all over Asia and beyond."

Looking ahead, Mr. Gu remarked, "From the beginning of the year 2012, we anticipate a shift from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions to large mobile operators and well-known brands in Asia. These activities should enable Zoom in 2012 to return to normal profitability and healthy margins."


Sunday, December 11, 2011

Resolution of Legal Issues
On November 3, 2011, the Circuit Court of the 11th Judicial District in and for Miami-Dade County, Florida (the "Court") entered an Order Approving Stipulation for Settlement of Claim (the "Order") in the matter entitled Socius CG II, Ltd. ("Socius") v. Zoom Technologies, Inc. (the "Company"). The Order provides for the full and final settlement of Socius GC II, Ltd.'s $2,500,000 claim against the Company (the "Claim"). Socius purchased the Claim from a creditor of Portables Unlimited LLC ("Portables"), a majority owned subsidiary of the Company. Pursuant to the terms of the Order, the Zoom issued and delivered to Socius 2,200,000 shares of common stock (the "Settlement Shares"), subject to adjustment as set forth in the Order and the Stipulation of Settlement. The settlement of the Claim will enable Zoom to make its first installment payment to T-Mobile USA, Inc., in connection with the Company's acquisition of a majority interest in Portables, which is described in further detail in the Company's Current Report on Form 8-K filed with the SEC on October 18, 2011.

Tuesday, November 15, 2011

Comments & Business Outlook

Third Quarter 2011 Results

  • Revenue was $50,748,605 for Q3 2011, a decrease of 29.7% from $72,155,779 in the same quarter in 2010. Revenue for the first nine months of 2011 was incrementally higher at $167,358,736 from $166,011,921 for the corresponding period a year ago.
  • Net income in Q3 2011 was $1,755,099 after deduction of approximately $1 million in R&D, down from $3,801,269 for the corresponding 2010 quarter.
  • EPS of $0.11 vs $0.29 in prior year

 

Our revenues were $50,748,605 for the quarter ended September 30, 2011, a decrease of 29.7% compared to $72,155,779 in the corresponding quarter in 2010. The decrease of revenues in the third quarter of 2011 compared to the corresponding quarter in 2010 was due to reduction in sales in both the OEM sector and of our own branded mobile phones, resulting from credit tightening policies in China.

 

Lowers Guidance for Year 2011:

     

  • Revenue of $250 million to $255 million

     

  • Net income of $7.5 million to $8.5 million, EBITDA of $14 million to $15.5 million

Outlook for Year 2012 including operational results of Portables Unlimited:

     

  • Revenue of $360 million to $380 million

Net income of $12 million to $13 million, EBITDA of $17 million to $19 million


Tuesday, November 1, 2011

Deal Flow

Item 3.02

Unregistered Sales of Equity Securities

On October 26, 2011, Zoom Technologies, Inc. ("Zoom" or the "Company") closed on the sale of 1,676,300 shares of common stock to Spreadtrum Communications, Inc., ("Spreadtrum") pursuant to the Common Stock Purchase Agreement (the "Agreement") entered into by and among the Company, Spreadtrum and Leo (Lei) Gu (the "Key Stockholder"), filed as Exhibit 10.1 hereto. In consideration, Spreadtrum paid an aggregate purchase price of US$2,900,000. The Company, Key Stockholder and Spreadtrum executed this agreement in reliance upon the exemption from securities registration afforded by the rules and regulations promulgated by the Securities and Exchange Commission under Section 4(2) of the Securities Act of 1933, as amended. Spreadtrum did not receive any registration rights and no warrants were issued pursuant to the Agreement.

Pursuant to the Agreement, the Company also agreed to design and develop all applicable Company products to integrate and operate solely with the Purchaser's products, and to not design and develop any Company products to integrate or operate with any competitive products for a term of three years.

Also pursuant to the Agreement, Spreadtrum shall have the right to nominate one nominee to the board of directors of the Company (the "Nomination Right"), subject to approval of the Company's independent directors, as required under Nasdaq Rule 5605(e)-Independent Director Oversight of Director Nominations. Spreadtrum's Nomination Right shall continue until such time that Spreadtrum owns less than 838,150 shares of the Company.


Thursday, October 13, 2011

Acquisition Activity
BEIJING, Oct. 13, 2011 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM), a leading China-based manufacturer of mobile phones and related products, today announced it has signed a definitive agreement to acquire a 55% share of Portables Unlimited LLC ("Portables"), one of the largest exclusive wholesale distributors of T-Mobile products in the United States. Portables has direct access to more than 1,000 retail locations across twenty States selling T-Mobile products, including approximately 100 exclusive T-Mobile carrier locations. This strategic acquisition is the first of its kind for a China-based handset manufacturer to join forces with a US cellular distributor, allowing ZOOM distribution capability in the US market. 

Thursday, August 25, 2011

Liquidity Requirements

Please note that it looks like ZOOM verbiage in its June 2011 10Q...

 On a going forward basis over the next 12 months, Zoom intends to continue to rely on short-term loans and restricted cash secured notes to fund its operational cash needs. In the event that expansion or acquisition opportunities exist, we may contemplate additional conventional bank, equity and/or debt financing to take advantage of such opportunities.

...is less direct in terms of the need not to tap equity markets for funding in the 2010 10K

On a going forward basis over the next 12 months, Zoom intends to continue to rely on short-term loans to fund its operational cash needs. The Company does not plan to raise funds from the equity market within the year of 2011.


Tuesday, August 16, 2011

Comments & Business Outlook

ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)

    Three Months Ended June 30   Six Months Ended June 30
    2011   2010   2011   2010
                 
Net revenues   $ 57,564,265    $ 42,876,873    $ 116,175,951    $ 93,856,142 
Cost of goods sold   51,682,375    38,297,116    103,945,192    85,098,131 
                 
Gross profit   5,881,890    4,579,757    12,230,759    8,758,011 
                 
Operating expenses:                 
     Sales and marketing   179,255    69,962    387,794    114,038 
     General and administrative   1,663,774    910,422    2,929,965    1,815,063 
     Research and development   1,393,511    -     3,028,715    -  
     Non-cash equity-based compensation    307,469    413,250    614,938    782,909 
     Total operating expenses   3,544,009    1,393,634    6,961,412    2,712,010 
                 
Income from operations    2,337,881    3,186,123    5,269,347    6,046,001 
                 
Other income (expenses)                
     Interest income   38,997    123,929    143,258    124,116 
     (Loss) on disposal of fixed assets   (64)   (2,027)   (8,432)   (2,027)
     Government grant income   15,342    18,352    15,342    18,352 
     Other income   443,622    213,621    458,847    213,621 
     Interest expense   (609,883)   (424,649)   (968,911)   (682,275)
     Exchange (loss)   (21,051)   (839)   (37,223)   (994)
     Other expenses   (61,473)   (98,642)   (142,054)   (113,495)
     Total other expenses   (194,510)   (170,255)   (539,173)   (442,702)
                 
Income before income taxes and non-controlling interest   2,143,371    3,015,868    4,730,174    5,603,299 
                 
Income taxes   653,206    1,019,280    1,440,805    1,567,406 
                 
Income before noncontrolling interest   1,490,165    1,996,588    3,289,369    4,035,893 
Less: loss (income) attributable to                
     noncontrolling interest   (5,058)   (38,060)   7,333    105,543 
                 
Net income attributable to Zoom Technologies, Inc.   1,495,223    2,034,648    3,282,036    3,930,350 
                 
Foreign currency translation gain - Zoom Technologies, Inc.   478,791    110,615    709,060    111,003 
Foreign currency translation gain - noncontrolling interest   52,235    -     72,344    -  
                 
Comprehensive income Zoom Technologies, Inc.   $ 1,974,014    $ 2,145,263    $ 3,991,096    $ 4,041,353 
Comprehensive income noncontrolling interest   $ 47,177    $ (38,060)   $ 79,677    $ 105,543 
                 
Basic and diluted earnings per common share:                
     Basic   $ 0.09    $ 0.17    $ 0.21    $ 0.37 
     Diluted   $ 0.09    $ 0.17    $ 0.21    $ 0.36 
                 
Weighted average common shares outstanding:                
     Basic    15,866,686    12,095,579    15,825,501    10,508,532 
     Diluted   15,924,013    12,321,977    15,892,287    10,794,055 

The accompanying notes are an integral part of these consolidated financial statements.


Tuesday, May 17, 2011

Comments & Business Outlook

First Quarter Results:

  • Revenue increased 15% over same quarter last year to $58.6 million.
  • Own brand phone sales in the first quarter of 2011 reached 201,700 units compared to 71,069 units sold in same quarter last year
  • Revenues from sales of own brand products in the first quarter of 2011 were $13.6 million, an increase of 195% over the same quarter last year
  • Net income decreased 5.7% to $1.8 million from same quarter last year due to increased R&D activities

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "We are glad to report that our own brand phones are establishing a strong foot hold in the market place and sales so far this year gave us confidence that our phones will continue to gain acceptance going forward. We have intensified our R&D activities in the first three months to gear up for the release of new products in the coming quarters. With the technology licensing agreement from Qualcomm recently secured, we are focusing on introducing innovative phone models based on the latest 3G technologies for smartphones with the Android operating system; and we are aiming not only for  the dynamic Chinese market but also to Asia, Europe and beyond."


Sunday, April 3, 2011

Liquidity Requirements
On going forward basis over the next 12 months, Zoom intends to continue to rely on short-term loans to fund its operational cash needs. The Company does not plan to raise funds from the equity market within the year of 2011.

Wednesday, March 30, 2011

Comments & Business Outlook
 

ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

    Years Ended December 31
    2010
  2009
         
Net revenues   $ 252,589,072    $ 189,055,742 
Cost of goods sold   (224,884,782)
  (177,653,678)
         
Gross profit   27,704,290    11,402,064 
    11%   6%
Operating expenses:         
     Sales and marketing   (466,493)   (1,338,999)
     General and administrative   (4,450,741)   (1,722,194)
     Research and development expenses   (3,251,209)   -  
     Non-cash equity-based compensation    (1,688,372)
  (44,480)
     Total operating expenses   (9,856,815)
  (3,105,673)
         
Income from operations    17,847,475    8,296,391 
         
Other income (expenses)        
     Interest income   256,612    287,206 
     Government grant income   122,675    -  
     Other income   286,661    579,658 
     Interest expense   (1,391,510)   (1,327,744)
     Exchange loss   (34,411)   (30,536)
     Other expenses   (245,873)
  (150,265)
     Total other income (expenses)   (1,005,846)
  (641,681)
Income before income taxes and        
     noncontrolling interest   16,841,629    7,654,710 
         
Income tax expense   (3,832,772)
  (1,231,180)
         
Income before noncontrolling interest   13,008,857    6,423,530 
Less: Income attributable to        
     noncontrolling interest   (183,253)
  (180,383)
         
Net income attributable to Zoom Technologies Inc   12,825,604    6,243,147 
         
Other comprehensive income Zoom Technologies, Inc.   650,230    (32,852)
Other comprehensive income noncontrolling interest   103,203 
  -  
         
Comprehensive income Zoom Technologies, Inc.   $ 13,475,834 
  $ 6,210,295 
Comprehensive income noncontrolling interest   $ 286,456 
  $ 180,383 
         
Basic and diluted income per common share:        
     Basic    $ 1.07    $ 1.22 
     Diluted   $ 0.97    $ 1.22 
         
Weighted average common shares outstanding:        
     Basic    12,035,589 
  5,110,340 
     Diluted   13,210,181 
  5,131,563
Fourth Quarter 2010 Highlights:
  -- Revenue increased 67% over same quarter last year to $86.6 million
  -- Net income grew 169% over same quarter last year to $5.1 million, while EPS was $0.32 vs. $0.22

Full Year 2010 Highlights:
  -- Revenue increased 34% over last year to $252.6 million
  -- Net income grew 105% over last year to $12.8 million, while non-GAAP EPS was $1.10 vs. $1.24.
  -- Electronic Manufacturing Service (EMS) volume reached 9.7 million
     units, compared to 8.5 million in 2009
  -- Sold 708,000 proprietary Leimone brand phones, compared to 100,000
     in 2009

First Quarter 2011 Guidance:
  -- Revenue of $53.0 million, compared to $50.9 million for 1Q 2010
  -- Net income of $1.98 million, compared to $1.9 million for 1Q 2010
  -- Leimone brand phone sales of 158,000 units totaling $11.5 million

Full Year 2011 Guidance:
  -- Revenue of $320 and $340 million, up 27%-35% from 2010
  -- Net income of $16 million to $17 million, up 25%-33% from 2010
  -- EMS volume growth to 13 million units
  -- Leimone brand phone sales of 1.4 million units

Thursday, January 6, 2011

Research

Unwinding our ZOOM trade from yesterday for break-even:

Confirmed details of yesterday's acquisition news: "is very small and will be immaterial to their results."


Wednesday, January 5, 2011

Research
Initiating a short-term trade in ZOOM @ 4.54 on acquisition news issued in an 8K earlier today. We are not sure if the news is a big deal, but they mention that they acquired one of the largest developer of iPhone apps in Asia.  Will give it a few moments to possibly play out in case a press release is issued. Fundamentally, ZOOM is not expected to dramatically grow EPS in the near-term.

Acquisitions

Zoom Technologies acquires a mobile platform video game development company, Celestial Digital Entertainment, Ltd., .

Upon the closing of the Acquisition on January 4, 2011, CDE became the wholly owned subsidiary of Profit Harvest, as described in the diagram below:

Zoom Technologies, Inc.

Profit Harvest Company, Ltd.

Celestial Digital Entertainment, Ltd.

The consideration paid for CDE was 484,800 shares of the Company's common stock. CDE primarily focuses on development of video games and applications for mobile phones and mobile platforms. CDE has developed over 40 titles for the Apple iPhone and is one of the largest developer of iPhone apps in Asia.


Wednesday, December 22, 2010

Comments & Business Outlook

BEIJING--(Marketwire - December 22, 2010) - Zoom Technologies, Inc. today announced its guidance for the full year ending December 31, 2011. The Company expects a second record year of financial performance since listing on NASDAQ, highlighting a 30% growth in both revenue and net income from previously stated 2010 guidance, and a 100% increase in sales of the Company's proprietary brand ZOOM/Leimone mobile phones.

Guidance:

  • Full Year 2011 net income between $16 and $17 million
  • Full Year 2011 revenues between $320 and $340 million
  • Full Year 2011 manufacturing volumes expected to reach 15 million units
  • Expects to sell 1.4 million ZOOM/Leimone brand phones in 2011, with 5 new 3G models and 20 new non-3G models

Mr. Leo Gu, Chairman and Chief Executive Officer of Zoom Technologies, stated, "We are pleased to announce our guidance for 2011 which shows our confidence in gaining market share. In 2011, we continue to fuel the rapidly expanding China mobile market by introducing 25 new models, including 5 3-G models, of our ZOOM/Leimone brand proprietary mobile phones to complete our feature-rich sleek-designed product line. In addition, we continue to increase our manufacturing capacity and produce mobile products for top tier Chinese mobile phone companies. We are proud of the growth we have achieved in 2010 and excited about significantly increasing manufacturing capabilities going into 2011."

GeoTeam® Note:

2011

  • Revenue guidance is in-line with analyst estimates.
  • Net income guidance appears to be higher than analyst estimates of around $11.0 million. ( We are still verifying this assumption).

Saturday, November 20, 2010

Deal Flow

On November 15, 2010, Zoom Technologies, Inc. (the "Company") consummated a transaction with certain accredited investors pursuant to a Securities Purchase Agreement entered into by the Company and the Accredited Investors. Zoom sold 2,113,664 units at a price of $3.75 per unit. Each unit is comprised of one share of common stock of Zoom and three-quarters of one common stock purchase warrant. Each whole warrant entitles the holder to purchase an additional common share at a price of $4.71 for a period of five years following the closing date.

Global Hunter Securities LLC acted as the lead placement agent in the transaction and Ladenburg Thalmann & Company Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc., acted as co-placement agent. In connection with the private placement, Zoom paid placement agent fees of $416,128 to Global Hunter Securities LLC and $138,709 to Ladenburg Thalmann Financial Services Inc. Zoom also issued, as additional consideration, 31,705 and 10,568 common stock purchase warrants entitling the holder to acquire the same number of common shares of Zoom at a price of $4.71 per common share to Global Hunter Securities LLC and Ladenburg Thalmann Financial Services Inc., respectively.


Comments & Business Outlook

Financial Highlights:

  • Revenue was $72.2 million, up 31% year-over-year and up 68% sequentially
  • Net income reached $3.8 million, up 119% year-over-year and up 87% sequentially
  • Net income for the first nine months grew to $7.7 million, up 78% over last year
  • Earnings per share for the third quarter 2010 was $0.29 as compared to $0.39 per share in the same quarter last year.
  • For the first nine months of 2010, earnings per share was $0.68 as compared to $1.02 over the first nine months of 2009.

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "We are pleased to report record results for the third quarter of 2010, which exceeded our expectations for both revenue and net income. We continue to experience high acceptance of our branded phones in China. As we announced earlier this month, we are rebranding our popular LEIMONE phones to the Zoom brand which we believe will expand our consumer awareness and accelerate our market share gains." 

Mr. Gu continued, "We continue to build traction as a consumer recognized brand. We are very excited about our ZOOM brand initiative with our ownership of the URL domain of zoom.com and uniformly branding our mobile phones. We believe Zoom Technologies will benefit from the domain name and trademark rights it has acquired. We feel that our new ZOOM mobile devices will directly reflect our mission and position in the robust China market. We are proud of our continued expansion in the rapidly growing China 3G market and our ability to produce mobile products for top tier Chinese mobile phone companies. Under the ZOOM name, we are confident our mobile phones will continue to enjoy strong growth and continue to be popular with the growing number of young people in China who seek feature-rich, mid-priced and sleek designed mobile phones."

Looking ahead, Mr. Gu remarked,

"For the fourth quarter 2010, we expect

  • Net revenue to be between $86 and $94 million
  • Net income is expected to be in the range of $4.8 and $5.4 million;

that will bring the full year 2010

  • Revenues to between $252 and $260 million,
  • Net income to between $12.5 and $13.1 million.

The mid-ranges of revenue and net income are expected at $256 million and $12.8 million, about 7% higher than our previous guidance of $240 million and $12 million respectively. We are also expecting to ship 700,000 LEIMONE branded phones in 2010, while forecasting continued strength in the mobile market for next year."  


Liquidity Requirements
On going forward basis over the next 12 months, Zoom intends to continue to rely on short-term loans to fund its operational cash needs. The Company may also contemplate one or more fundraises for its expansion needs, provided that conditions of the capital market allow for financing at acceptable terms.

Monday, October 18, 2010

Comments & Business Outlook

Zoom expects to report

  • Net revenue in the range of $68 million to $71 million for the third quarter of 2010, which represents a sequential increase of approximately 59 percent to 66 percent from the net revenue of $42.9 million for the second quarter of 2010. This updated expected net revenue is higher than the previous guidance of $55 million to $61 million.
  • The Company anticipates reporting net income in the range of $3.3 million to $3.5 million for the third quarter of 2010, a sequential increase of approximately 63 percent to 72 percent from the net income of $2.03 million in the second quarter of 2010. This is higher than the previous guidance of $2.7 million to $3.3 million.

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "Our third quarter preliminary results exceeded our expectations and reflects our momentum and success in the dynamic mobile phone industry in China. We are proud of our continued expansion in the rapidly growing China 3G market and our partnerships with top tier Chinese mobile phone carriers. Contributing to our overall strong revenue results was the continued success of our LEIMONE brand phones, which captured $14 million in revenue in the third quarter. We sold 232,000 units of our LEIMONE brand mobile phones in this quarter, of which 27% were 3G units. We continue to gain market share with our branded phones and remain confident that the strength in our overall EMS business will bring further revenue growth in the remainder of 2010."