SOURCE: Zoom Telephonics, Inc.

Zoom Telephonics, Inc.

September 01, 2011 13:49 ET

Zoom Telephonics Files Registration Statement for Rights Offering to Its Shareholders

BOSTON, MA--(Marketwire - Sep 1, 2011) - Zoom Telephonics, Inc. ("Zoom") (OTCBB: ZMTP), a leading provider of modems and other communications products, today filed a registration statement on Form S-1 with the Securities and Exchange Commission ("SEC") for a rights offering to its shareholders. Zoom expects the record date for the rights offering to be September 9, 2011 or later. Each shareholder of Zoom as of the record date will receive two non-transferable rights for each share of Common Stock of Zoom held by that shareholder. Each right will entitle the shareholder to purchase one share of Zoom's Common Stock at a purchase price of $0.27 per share subject to potential purchase limits for shareholders attempting to own 5% or more of Zoom's shares. Assuming the rights offering is fully subscribed, Zoom will receive gross proceeds of approximately $2.9 million, less expenses of the rights offering estimated to be approximately $30 thousand.

Zoom will determine the record date and the expiration date of the rights offering shortly before the final S-1 registration statement is declared effective by the SEC.

Zoom filed this rights offering to raise equity capital in a cost-effective manner that gives Zoom's shareholders as of the record date the opportunity to participate. The net proceeds will be used for working capital needs, development of a line of sensor and control products, and for general corporate purposes, as described in the rights offering documents.

Three Zoom founders who together beneficially own approximately 24% of the outstanding Common Stock -- Zoom President, CEO, Chairman, and Acting CFO Frank Manning, Zoom Director Peter Kramer, and shareholder T. Patrick Manning -- have expressed their intention to participate in the rights offering. However, there can be no assurance that they will actually participate in the offering.

The rights offering includes an oversubscription privilege which permits each stockholder that exercises its rights in full to purchase additional shares of Common Stock that remain unsubscribed at the expiration of the offering. This oversubscription privilege is subject to the availability and allocation of shares among holders exercising this oversubscription privilege.

Shareholders attempting to own over 5% of Zoom's shares may have their basic or oversubscription purchases limited to protect the availability of Zoom's net operating loss carry-forwards or tax credit carry-forwards under Section 382 of the Internal Revenue Code, in each case as further described in the rights offering documents.

A registration statement relating to these rights offering securities, namely subscription rights and common stock to be issued upon exercise of subscription rights as described in this release, has been filed with the SEC but has not yet become effective. Rights offering securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The rights will be issued to all shareholders as of a record date which has yet to be determined. Zoom will provide notice of the record date in the future at such time as it is determined. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these rights offering securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.

"Zoom's balance sheet and cash position are still fairly strong," said Frank Manning, Zoom's President and CEO. "However, we think it's prudent to strengthen both at this time. Successfully completing the rights offering would improve our buying power to address the strong cable modem demand we're experiencing; though of course the need for this buying power assumes we can solve the delivery and certification issues we've been having as discussed in our S-1 registration statement. This financing would also strengthen our balance sheet. A successful rights offering would also help us to finance our development of a new line of sensor and control products. This product line's wireless sensors can be used, for instance, to check for home emergencies like burst water pipes or heating problems, to check for burglars, to monitor pets, or to monitor the movements of elderly or infirm people within their home. Information from the sensors could be reviewed on the Web or through a smartphone application. We want to move aggressively in this sensor/control area, and a successful rights offering would help us to do that."

About Zoom Telephonics

Founded in 1977 in Boston, Zoom Telephonics, Inc. designs, produces, markets, and supports communication products under the Zoom, Hayes®, and Global Village® brands. For more information about Zoom and its products, please see www.zoomtel.com.

Forward-Looking Statements

This release contains forward-looking information relating to Zoom's plans, expectations, and intentions, including statements relating to the proposed rights offering and Zoom's new products. Actual results may be materially different from expectations as a result of known and unknown risks, including: the potential need for additional funding which Zoom may be unable to obtain; Zoom's ability to continue as a going concern; inability to adequately meet cable modem demand; declining demand for certain of Zoom's products; Zoom's reliance on a limited number of customers for sale of its products; fluctuations in the foreign currency exchange rate in relation to the U.S. dollar; delays, unanticipated costs, interruptions or other uncertainties associated with Zoom's production and shipping capabilities in Mexico; Zoom's reliance on an outsourcing partner to conduct production operations in Mexico; Zoom's dependence on key employees; the uncertainty of future demand from any specific customer or for all of Zoom's customers as a group; the uncertainty of the regulatory environment for Zoom's products; uncertainty of new product development and introduction, including budget overruns, project delays, and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; Zoom's dependence on one or a limited number of suppliers for certain key components; rapid technological change; competition; factors affecting Zoom's liquidity; stockholders may suffer significant dilution as a result of the rights offering; Zoom may cancel the rights offering or revise documents or important elements relating to its rights offering at any time; the subscription price determined for the rights offering is not necessarily an indication of Zoom's value; the market price of Zoom's common stock may decline as a result of the rights offering or for other reasons; and other risks set forth in Zoom's filings with the Securities and Exchange Commission, including Zoom's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and the registration statement on Form S-1 filed by Zoom today. Zoom cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Zoom's expectations or any change in events, conditions or circumstance on which any such statement is based.

Contact Information

  • For additional information, please contact:
    Investor Relations
    Zoom Telephonics
    207 South Street
    Boston, MA 02111
    telephone (617) 753-0897
    email: investor@zoomtel.com
    www.zoomtel.com