BOSTON, MA — (Marketwire) — 09/12/11 — Zoom Telephonics, Inc. (OTCBB: ZMTP) (“Zoom”), a leading provider of modems and other communications products, today announced some critical dates for its previously announced rights offering. The record date is September 13, 2011; and each shareholder of Zoom as of 5:00 p.m. New York City Time, September 13, 2011 will receive two non-transferable rights for each share of Common Stock of Zoom held by such shareholder at that time. Zoom expects to mail the S-1 prospectus and rights subscription forms on approximately September 16, 2011. The expiration date for the rights offering will be November 7, 2011 unless Zoom chooses to extend the term of the offering. Zoom is likely to have announced and discussed its third quarter 2011 results prior to the expiration date, enabling shareholders to make their investment decision with updated information.
Each right will entitle the shareholder to purchase one share of Zoom-s Common Stock at a purchase price of $0.27 per share, and to apply for an over-subscription of additional shares at $0.27 per share subject to availability and possible limits for any shareholder attempting to own 5% or more of Zoom. This limit is due to Zoom-s goal of preserving Zoom-s Net Operating Loss Carry-forward for tax purposes.
Assuming the rights offering is fully subscribed, Zoom will receive gross proceeds of approximately $2.94 million, less expenses for the rights offering of approximately $30 thousand.
If the rights offering is not fully subscribed, shareholders attempting to own less than 5% may choose to use their over-subscription rights to increase their ownership percentage in Zoom. Shareholders attempting to own more than 5% may also participate in the offering, but their share purchases may or may not be limited, depending on the number of available shares and the expected impact on Zoom-s taxes.
Shares purchased by way of the rights offering will be registered shares of Zoom Common Stock, equivalent to currently trading Zoom Common Stock. The shares will be qualified to immediately trade on the Over-the-Counter Bulletin Board, though subject to normal restrictions such as insider trading rules.
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, subject to limits for any shareholder attempting to own 5% or more of Zoom. 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.
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. 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.
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 .
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. 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.
For additional information, please contact:
Investor Relations
Zoom Telephonics
207 South Street
Boston, MA 02111
telephone (617) 753-0897
email:
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