Zoom Technologies Reports Full Year and Fourth Quarter 2012 Results

Zoom Technologies Reports Full Year and Fourth Quarter 2012 Results

Fourth Quarter 2012 Highlights:

  *Revenue for the fourth quarter of 2012 was $10.1 million, a decrease of
    24.9% over same quarter last year of $13.5 million
  *Loss from continuing operations of $7.1 million for the quarter compared
    to $1.9 million
  *Net loss of $34.5 million compared to net loss of $2.9 million in same
    quarter last year
  *Net loss in the quarter resulted from disposition of our subsidiaries
    Profit Harvest and Celestial Digital Entertainment, impairment charges for
    the write down of goodwill related to Ever Elite, Nollec Wireless, and TCB
    Digital.

Full Year 2012 Highlights:

  *Revenue increased by $36.3 million from $13.5 million to $49.8 million
  *Sales of mobile handsets and accessories and commission from activation of
    services and residuals contributed $16.6 million and $33.2 million,
    respectively
  *Net loss for 2012 was $32.5 million compared to net income of $6.4 million
    in 2011

BEIJING, April 15, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc.
(Nasdaq:ZOOM) (the "Company") is a holding company with a subsidiary that
engages in the distribution of cellular service and products in the U.S.
Today, ZOOM reported financial results for the fourth quarter and full year
ended December 31, 2012.

During the fourth quarter of 2012, ZOOM's management considered recent global
economic conditions, industry trends and capital market conditions, and
concluded that it is in the best interests of the Company to sell its
operations in China. Therefore, the Company entered into a securities purchase
agreement with Beijing Zhumu Culture Communication Company, Ltd. to sell
ZOOM's manufacturing, research and development, mobile game development, and
sales operations in China and Hong Kong for cash proceeds of $31.7 million.
Please refer to our 10K Annual Report filed with the US SEC today for more
details regarding the sale. ZOOM intends to use the proceeds from the sale to
acquire businesses in North America with distribution channels for mobile
products and consumer electronics. ZOOM expects to derive the majority of its
revenue on a going forward basis from its operations in North America.

In connection with the sale of the operations, certain portions of the sales
transaction have closed. As of December 31, 2012, the dispositions of the
sales operation, Profit Harvest, and the mobile gaming development operation,
Celestial Digital Entertainment, both based in Hong Kong, were completed. On
April 5, 2013 the dispositions of Ever Elite and Nollec Wireless, the mobile
handset development subsidiaries were also completed. The sale of TCB Digital,
ZOOM's 80%-owned manufacturing operation, is expected to be finalized in the
second quarter of 2013. As result of the closing on the disposition of Profit
Harvest and Celestial Digital Entertainment, ZOOM recognized a $11.9 million
loss. ZOOM also recognized $8.4 million in goodwill impairment charges related
to the discontinuation of Ever Elite and Nollec Wireless; and recorded a $0.9
million goodwill impairment charge for the disposition of Celestial Digital
Entertainment. Also related to the dispositions, ZOOM wrote off certain stock
option grants and stock awards that ZOOM has historically amortized straight
line over prescribed vesting periods; however, because the services related to
these stock option grants and stock awards were for services rendered to the
discontinued operations, ZOOM immediately recognized the remaining unamortized
balances as of December 31, 2012. The additional expenses were approximately
$4.6 million. As result of ZOOM's decision to discontinue and dispose of such
operations, ZOOM's current remaining primary operations are those of Portables
Unlimited LLC ("Portables") - a wholesale distributor of T-Mobile USA products
and services. Accordingly, ZOOM's results of operations from continuing
operations reflect the operating results of Portables.

For the fourth quarter of 2012, ZOOM generated net revenue of $10.1 million
from continuing operations, down 24.9% from $13.5 million as compared to the
fourth quarter of 2011. The decline in revenue reflected the general economic
conditions in the United States.

Full year revenue for ZOOM from continuing operations increased $36.3 million
from $13.5 million in 2011 to $49.8 million for 2012. The increase was due to
the fact that ZOOM acquired Portables in October of 2011 and the activities
reported for 2011 only included the results from October through December
2011, whereas the 2012 results from operations reflected the full year.

Mr. Lei Gu, Chairman & CEO of ZOOM explained, "Over the last two years, the
capital markets have been difficult on our stock. Concurrently, the mobile
phone business has faced rapid changes, and fierce competition has hurt our
margins.We feel that we need to sell our China-based assets which are
bringing ZOOM less than favorable operating results and poor capital market
multiples.We intend to use that cash to purchase assets that will bring
steady positive cash flows moving ahead.We believe North America provides the
best opportunities for us to put the cash to good use and generate higher
returns."

Net loss during the fourth quarters of 2012 and 2011 were $34.5 million and
$2.9 million, respectively.Net loss for the year 2012 was $32.5 million as
compared to net income of $6.4 million for 2011.The significant net losses
were the results of discontinuation and disposal of operations detailed above.

Looking ahead, Mr. Gu remarked, "In 2013, our focus will be North
America.Let's keep our eyes open and get to work on finding some additional
businesses that we can acquire and help unlock value.We look forward to a
fruitful 2013."

Conference Call Details

Zoom will review the fourth quarter and full year 2012 results and discuss
management's expectations for 2013 on Tuesday, April 16, 2013 at 9:30 a.m. ET
(6:30a.m. PT). The dial-in numbers are +1-855-500-8701 for US domestic callers
and +65-6723-9385 for international callers, and then enter the access code
(conference ID) 36138063.A replay of the conference call will be available
through April 19, 2013.The replay dial-in numbers are +1 855-452-5696 for US
domestic callers and +61-2-8199-0299 for international callers, and then enter
access code 36138063.

About Zoom Technologies, Inc.

Zoom Technologies, Inc., through its subsidiary Portables Unlimited LLC,
operates a wholesale distributor business for T-Mobile products and services
in the United States..As of the fourth quarter of 2012 the Company decided to
dispose of substantially all of its manufacturing, development, and sales
businesses in China (except its joint venture with Spreadtrum Communications
(Tianjin) Co., Ltd.), and redeploy its capital for the acquisition and
development of distribution channels for mobile products and consumer
electronics in North America.

Forward-Looking Statements

Certain statements in this press release may constitute "forward looking
statements" that involve risks and uncertainties. These include statements
about our expectations, plans, objectives, assumptions or future events in
which the outcome cannot be assured. You should not place undue reliance on
these forward-looking statements. Information concerning factors that could
cause our actual results to differ materially from these forward-looking
statements can be found in our periodic reports filed with the Securities and
Exchange Commission. We undertake no obligation to publicly release revisions
to these forward-looking statements to reflect future events or circumstances
or reflect the occurrence of unanticipated events.

ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                              
                                                              
                                                AS OF DECEMBER 31,
                                               2012           2011
ASSETS                                                        (Restated)
Current assets                                                 
Cash and equivalents                            $430,746     $214,683
Restricted cash                                 19,044,294    --
Accounts receivable, net                        3,246,247     3,377,491
Inventories, net                                928,881       700,488
Other receivables and prepaid expenses          4,514,434     327,952
Due from related parties                        20,964,025    8,743,535
Current assets of discontinued operations, held 144,751,290   115,142,591
for sale
Total current assets                            193,879,917   128,506,740
                                                              
Property, plant and equipment, net              2,376,639     3,110,802
Equipment deposit                                35,249        101,859
Intangible assets                                480,690       370,995
Long-term investments                            11,912,956    --
Goodwill                                         27,031,492    36,332,497
Non-current assets of discontinued operations,   --           13,722,214
held for sale
TOTAL ASSETS                                     $235,716,943 $182,145,107
                                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                          
Current liabilities                                           
Short-term loans                                3,519,999     902,614
Accounts payable                                6,409,278     9,994,990
Accrued expenses and other payables             3,814,647     4,822,050
Purchase deposit from buyer                     8,740,490     --
Taxes payable                                   22,334        22,113
Due to related parties                          9,889,037     6,742,373
Warrant liability                               7,340         850,841
Current liabilities of discontinued operations  138,348,859   70,725,238
Total current liabilities                       170,751,984   94,060,219
                                                              
Long-term payables                               --           145,000
Long-term notes payables                         317,500       500,000
Non-current liabilities of discontinued          --           10,458
operations
TOTAL LIABILITIES                                171,069,484   94,715,677
                                                              
COMMITMENTS AND CONTINGENCIES                                  
                                                              
STOCKHOLDERS' EQUITY                                          
Preferred stock: authorized 1,000,000 shares,    --           --
par value $0.01 none issued and outstanding
Common stock: authorized 60,000,000 shares, par
value $0.01, 29,320,848 shares issued and
29,319,168 shares outstanding at December 31,    293,192       238,640
2012; 23,865,723 shares issued and 23,864,043
shares outstanding at December 31, 2011.
Treasury shares: 1,680 shares at cost            (7,322)       (7,322)
Shares to be issued                              --           1,000
Additional paid-in capital                       51,108,409    44,557,801
Statutory surplus reserve                        702,539       682,528
Accumulated other comprehensive income          4,058,657     2,081,429
Retained earnings                                (4,098,798)   28,373,724
TOTAL STOCKHOLDERS' EQUITY                       52,056,677    75,927,800
                                                              
Non-controlling interest                         12,590,782    11,501,630
                                                              
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $235,716,943 $182,145,107
                                                              
The accompanying notes are an integral part of these consolidated financial
statements.


ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
                                                              
                                                              
                                             FOR THE YEARS ENDED DECEMBER 31,
                                             2012              2011
                                                              (Restated)
Net revenues                                  $49,773,552     $13,476,376
Cost of sales                                 40,813,304       11,185,774
Gross profit                                 8,960,248        2,290,602
                                                              
Operating expenses:                                           
Selling, general, and administrative         10,088,605       4,785,332
expenses
Non-cash equity-based compensation          7,416,937        2,413,992
Total operating expenses                     17,505,542       7,199,324
                                                              
Loss from operations                         (8,545,294)      (4,908,722)
                                                              
Other income and (expenses)                                    
Interest income                              --              51
Interest expense                             (986,427)        (117,697)
Change in fair value of warrants             843,501          3,673,243
Investment loss                              (429,586)        --
Other income (expense), net                  (31,211)         805,299
                                             (603,723)        4,360,896
                                                              
Loss before income taxes and non-controlling  (9,149,017)      (547,826)
interest from continuing operations
                                                              
Income taxes for continuing operations        190,845          --
                                                              
Loss before non-controlling interest from     (9,339,862)      (547,826)
continuing operations
                                                              
less: Income (loss) attributable to
non-controlling interest of continuing        424,047          313,002
operations
                                                              
Loss attributable to Zoom Technologies, Inc.  (9,763,909)      (860,828)
from continuing operations
                                                              
Discontinued Operations:                                       
Income (loss) from discontinued operations,  (11,178,671)     7,494,478
net of tax
Loss on disposal, net tax                    (11,860,025)     --
                                                              
less: Income (loss) attributable to
non-controlling interest from discontinued    (350,094)        255,803
operations
                                                              
Income (loss) attributable to Zoom
Technologies, Inc. from discontinued          (22,688,602)     7,238,675
operations
                                                              
Net income (loss) attributable to Zoom        $(32,452,511)   $6,377,847
Technologies, Inc.
                                                              
                                                              
Basic and diluted loss per common share from                   
continuing operations:
Basic                                        $(0.36)         $(0.05)
Diluted                                      $(0.36)         $(0.05)
                                                              
Basic and diluted income (loss) per common                     
share from discontinued operations:
Basic                                        $(0.84)         $0.42
Diluted                                      $(0.84)         $0.36
                                                              
Basic and diluted income (loss) per common                     
share
Basic                                        $(1.20)         $0.37
Diluted                                      $(1.20)         $0.32
                                                              
Weighted average common shares outstanding:                    
Basic                                        27,144,705       17,156,446
Diluted                                      27,144,705       20,110,099
                                                              
The accompanying notes are an integral part of these consolidated financial
statements.


ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                              
                                                              
                                             FOR THE YEARS ENDED DECEMBER 31,
                                             2012              2011
                                                              (Restated)
Cash flows from operating activities:                         
Loss including non-controlling interest       $(9,339,862)    $(547,826)
                                                              
Adjustments to reconcile income including
non-controlling interest to cash provided by                   
(used in) operating activities:
Depreciation and amortization                1,209,846        108,222
Non-cash equity-based compensation           7,416,927        2,413,992
Provision for doubtful accounts              686,141          --
Loss on investment in joint venture          429,586          --
Fair value adjustment on warrants            (843,501)        (3,673,243)
Changes in operating assets and liabilities:                  
Accounts receivable                         (554,897)        3,396,543
Inventories                                 (194,108)        310,705
Prepaid expenses and other assets            (1,356,515)      2,788,595
Accounts payable                            (3,876,099)      (5,251,766)
Related parties-net                          (29,561,132)     (464,441)
Accrued expenses and other current           237,831          (1,048,743)
liabilities
Net cash used in operating activities         (35,745,783)     (1,967,962)
                                                              
Cash flows from investing activities:                          
Purchase of property and equipment and other (321,835)        (58,105)
long-term assets
Cash received for the sale of disposed units 31,740,490       --
Net cash provided by (used in) investing      31,418,655       (58,105)
activities
                                                              
Cash flows from financing activities:                          
Issuance of shares for cash                  --               3,102,464
Proceeds from short-term loans               2,617,384        (449,947)
Repayment on notes payable                   (182,500)        (1,023,673)
Receipts from (payments to) related parties  2,542,596        --
Repayment on borrowing from related parties  (434,369)        (25,499)
Net cash provided by financing activities     4,543,111        1,603,345
                                                              
Effect of exchange rate changes on cash &     80               417
equivalents
                                                              
Net increase (decrease) in cash and           216,063          (422,305)
equivalents
                                                              
Cash and equivalents, beginning balance       214,683          636,988
                                                              
Cash and equivalents, ending balance          $430,746        $214,683
                                                              
SUPPLEMENTARY DISCLOSURES:                                     
Interest paid                                $2,564,364      $1,324,331
Income tax paid                              $2,802,488      $2,812,248
                                                              
                                                              
The accompanying notes are an integral part of these consolidated financial
statements.

CONTACT: Investor Contact:
        
         Lynn Wei
         Investor Relations Coordinator
         Zoom Technologies, Inc.
         +86-10-5935-9576
         weilin@zoom.com
         www.zoom.com

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