EX-10

EX-10

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Stockholder's Equity - Warrants (Tables)

12 Months Ended

Dec. 31, 2013

Stockholders Equity - Warrants Tables

Warrant activity and summary

The following summary represents warrants activity during the year ended December 31, 2013:

			Weighted-
			Average		Aggregate
	Number of		Exercise		Intrinsic
	Warrants		Price		Value
Balance, December 31, 2012	863,860	$	23.00	$	-
Granted
Lapsed
Exercised
Cancelled
Balance, December 31, 2013	863,860	$	23.00	$	-

The following presents warrants summary as of December 31, 2013:

	Warrants Outstanding				Warrants Exercisable
		Weighted-		Weighted-			Weighted-
		Average		Average			Average
	Number	Remaining		Exercise	Number		Exercise
	Outstanding	Contractual Life		Price	Exercisable		Price
Warrants	863,860	1.09 years	$	23.00	863,860	$	23.00

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Property, Plant and Equipment Depreciation (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property Plant And Equipment Depreciation Narrative Details
Depreciation expense	$ 0	$ 813,471

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Merger and Acquisitions (Narrative) (Details) (USD $)

12 Months Ended

12 Months Ended

Dec. 31, 2013

Silver Tech

May 31, 2010

Silver Tech

Dec. 31, 2013

CDE

Jan. 04, 2011

CDE

Business Acquisition, Effective Date of Acquisition

May 31, 2010

Jan. 04, 2011

Business Acquisition, Name of Acquired Entity

Silver Tech Enterprises Ltd

Celestial Digital Entertainment, Ltd., ("CDE")

Business Acquisition, Description of Acquired Entity

The Company acquired 100% equity in Silver Tech on May 31, 2010. As of May 31, 2010, the net assets of Silver Tech were $2,564,160. The purchase consideration was $10,960,000 which resulted in goodwill of $8,395,840. As of December 31, 2012, the Company has taken action to dispose of Silver Tech's operating subsidiaries Ever Elite and Nollec; accordingly, all goodwill related to Silver Tech has been written off.

The Company acquired 100% ownership of CDE on January 4, 2011. As of January 4, 2011, the net liabilities of CDE were $43,409. The purchase consideration was $1,818,000 which resulted in goodwill of $1,861,409. As of December 31, 2012, as part of the Company's disposal of Profit Harvest the Company has indirectly disposed of CDE, accordingly, all of the goodwill related to CDE has been written off.

Business Combination, Reason for Business Combination

As of December 31, 2012, as part of the Company's disposal of Profit Harvest the Company has indirectly disposed of CDE, accordingly, all of the goodwill related to CDE has been written off.

Business Acquisition, Cost of Acquired Entity

$ 10,960,000

$ 1,818,000

Business Acquisition, Percentage of Voting Interests Acquired

100.00%

100.00%

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Income Tax (Schedule of Tax Effects of Temporary Differences in Deferred Tax Assets and Liabilities) (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Income Tax Schedule Of Tax Effects Of Temporary Differences In Deferred Tax Assets And Liabilities Details
Net operating loss	$ 1,373,600	$ 469,200
Less: Valuation allowance	(1,373,600)	(469,200)
Total deferred tax assets	0	0
Deferred tax liabilities:	0	0
Deferred tax assets, net	$ 0	$ 0

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Intangible Assets (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Intangible assets, gross	$ 349,600	$ 349,600
Less: Accumulated amortization	0	0
Intangible assets, net	349,600	349,600
Domain name, logo and trade mark
Intangible assets, gross	349,600	349,600
Less: Accumulated amortization	0	0
Intangible assets, net	$ 349,600	$ 349,600

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Accounting Policies (Impairment of Long-Lived Assets) (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Accounting Policies Impairment Of Long-Lived Assets Narrative Details
Impairment of Long-lived Assets	$ 0	$ 9,048,334

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2013

Accounts Receivable Tables

Accounts receivable

As of December 31, 2013 and 2012, the Company's accounts receivable consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Accounts receivable	$	757,956	$	735,304
less: Allowance for doubtful accounts		(757,956)		(735,304)
Accountants receivable, net	$	-	$	-

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Equity Method Investments (Details) (USD $)

12 Months Ended

6 Months Ended

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

SpreadZoom

Dec. 31, 2012

SpreadZoom

Jul. 15, 2013

Portables

Dec. 31, 2012

Portables

Equity Method Investment, Description of Principal Activities

On May 10, 2012, the Company along with Spreadtrum Communications (Tianjin) Co., Ltd, Tianjin Baoshui District Investment Co, Ltd, and Han & Qin International (BVI) Limited invested in the joint venture SpreadZoom Technologies, Inc ("SpreadZoom"). SpreadZoom is domiciled in Tianjin, China with a registered capital of $47,352,700 (RMB 300,000,000). As of September 30, 2012, $17,520,500 (RMB 111,000,000) in capital had been contributed to SpreadZoom; the Company contributed $12,342,358 (RMB 78,000,000). As of September 30, 2012, the Company has used the equity method to account for its investment in SpreadZoom.

On May 10, 2012, the Company along with Spreadtrum Communications (Tianjin) Co., Ltd, Tianjin Baoshui District Investment Co, Ltd, and Han & Qin International (BVI) Limited invested in the joint venture SpreadZoom Technologies, Inc ("SpreadZoom"). SpreadZoom is domiciled in Tianjin, China with a registered capital of $47,352,700 (RMB 300,000,000). As of June 30, 2012, $17,520,500 (RMB 111,000,000) in capital had been contributed to SpreadZoom; the Company contributed $12,342,542 (RMB 78,000,000). The Company had committed to invest an additional $10,117,700 (RMB 64,100,000) in SpreadZoom. Management and control of the business have not been fully determined. The Company has used the equity method to account for its investment in SpreadZoom and has recorded a loss from investment of $ 1,031,979 and $ 429,586 for the years ended December 31, 2013 and 2012, respectively.

Changes in Equity Method Investments

Balance at beginning of period (restated)

$ 23,758,974

$ 9,160,273

$ 11,912,956

$ 11,846,018

$ 9,160,273

Initial investment

0

12,342,542

12,342,542

Equity method investment income (loss)

(926,373)

(3,840)

(1,031,979)

(429,586)

105,606

425,746

Increase in investment through co-borrowing on bank line of credit

3,000,000

3,000,000

Increase in investment through co-borrowing on bank term note

2,500,000

2,500,000

0

Reduction in equity interest from 55.0% to 50.1%

(735,000)

0

(735,000)

Reduction in investment through repayment of bank line of credit

(500,000)

(5,001)

(500,000)

(5,001)

Reduction from repayment on bank term note

(489,310)

(489,310)

Gain from default of promisssry note leading for fofeiture of ownership

(2,000,000)

(2,000,000)

Loss on disposal

(11,462,314)

(11,462,314)

Balance at end period (restated)

10,880,977

23,758,974

10,880,977

11,912,956

0

11,846,018

Financial Position

Current assets

17,811,982

42,772,581

6,283,761

7,145,668

Non-current assets

6,558,367

1,775,661

2,515,896

2,542,977

Total assets

24,370,349

44,548,242

8,799,657

9,688,645

Current liabilities

9,353,001

27,839,474

14,570,582

16,994,165

Non-current liabilities

1,708,928

Total liabilities

9,353,001

27,839,474

16,279,510

16,994,165

Net ssset value

15,017,348

16,708,768

(7,479,853)

(7,305,520)

Results of Operations

Net revenues

66,920,617

46,025,192

14,130,111

49,773,552

Cost of goods sold

65,000,788

45,859,806

10,341,986

40,813,304

Gross profit

1,919,829

165,386

3,788,125

8,960,248

Operating expenses

4,152,403

1,327,593

3,309,640

7,215,081

Operating income (loss)

(2,232,574)

(1,162,207)

478,485

1,745,167

Other income (expenses), net

54,025

255,721

(267,695)

(895,374)

Income (loss) before taxes

(2,178,549)

(906,486)

210,790

849,793

less: Provision for income taxes

Net income (loss)

(2,178,549)

(906,486)

210,790

849,793

Investment loss attributable to Zoom Technologies, Inc.

$ (926,373)

$ (3,840)

$ (1,031,979)

$ (429,586)

$ 105,606

$ 425,746

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Short-Term Loans (Narrative) (Details) (USD $)

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Short-term loans

$ 3,158,587

$ 2,994,999

STL Loan 1

Short-term Debt, Lender

M&T Bank

Short-term Debt, Terms

At December 31, 2012, the short term loan balance of $2,994,999 reflected the amount drawn against a line of credit for up to $3.0 million issued jointly to the Company and Portables by M&T Bank. The line was collateralized by real property, a certificate of deposit, and guarantees of Portables Unlimited, Inc. (the 49.9% owner of Portables). The interest rate was 1 month LIBOR plus 3.00%. The maturity date of the line of credit is March 26, 2015. In February of 2013, the line of credit was refinanced to a maximum borrowing amount of $2.5 million. At December 31, 2013 the Company accrued an amount due on the credit for $2.5 million. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the line of credit. The Company will recognize a gain in the second quarter of 2014 for $2.5 million reflecting the release.

Short-term loans

2,500,000

2,994,999

STL Loan 2

Short-term Debt, Lender

M&T Bank

Short-term Debt, Terms

In February of 2013 the Company and Portables jointly entered into a term loan with M&T Bank for $2,500,000 million that matures in February of 2017. The balance of the note fully amortizes via monthly principal and interest payments up through the maturity of the note. The note carries an interest of 1 month LIBOR plus 3.50%. At December 31, 2013, Portables had repaid $489,310 in principal; the outstanding balance of the note was $2,010,690. The Company accounted for the outstanding balance of $2,010,690 with $658,587 as short term, and the remainder of $1,352,103 as long term. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the term note. The Company will recognize a gain in the second quarter of 2014 for $2,010,690 million reflecting the release.

Short-term loans

$ 658,587

$ 0

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Discontinued Operations (Narrative) (Details)

12 Months Ended

Dec. 31, 2013

Profit Harvest and CDE

Description and Timing of Disposal

On December 31, 2012, the Company announced its plan to dispose of certain business operations to Beijing Zhumu Culture Communication Company, Ltd. covered in the Share Purchase Agreement as described in "Note 1 - Organization and Nature of Business Operations" was for approximately $31.7 million (RMB 200 million) in sales proceeds. The Share Purchase Agreement covers the sale of several business operations in different jurisdictions, with differing regulatory requirements regarding the purchase and sale of businesses. For accounting purposes the Company has accounted for those operations as discontinued operations up to the point of the individual closing of the relevant entities under relevant local jurisdictions as detailed in the tables below.

The sale of Profit Harvest and CDE closed on December 31, 2012. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec closed on April 5, 2013. The sale of TCB Digital closed on May 16, 2014.

Ever Elite and Nollec Wireless

Description and Timing of Disposal

On December 31, 2012, the Company announced its plan to dispose of certain business operations to Beijing Zhumu Culture Communication Company, Ltd. covered in the Share Purchase Agreement as described in "Note 1 - Organization and Nature of Business Operations" was for approximately $31.7 million (RMB 200 million) in sales proceeds. The Share Purchase Agreement covers the sale of several business operations in different jurisdictions, with differing regulatory requirements regarding the purchase and sale of businesses. For accounting purposes the Company has accounted for those operations as discontinued operations up to the point of the individual closing of the relevant entities under relevant local jurisdictions as detailed in the tables below.

The sale of Profit Harvest and CDE closed on December 31, 2012. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec closed on April 5, 2013. The sale of TCB Digital closed on May 16, 2014.

TCB Digital

Description and Timing of Disposal

On December 31, 2012, the Company announced its plan to dispose of certain business operations to Beijing Zhumu Culture Communication Company, Ltd. covered in the Share Purchase Agreement as described in "Note 1 - Organization and Nature of Business Operations" was for approximately $31.7 million (RMB 200 million) in sales proceeds. The Share Purchase Agreement covers the sale of several business operations in different jurisdictions, with differing regulatory requirements regarding the purchase and sale of businesses. For accounting purposes the Company has accounted for those operations as discontinued operations up to the point of the individual closing of the relevant entities under relevant local jurisdictions as detailed in the tables below.

The sale of Profit Harvest and CDE closed on December 31, 2012. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec closed on April 5, 2013. The sale of TCB Digital closed on May 16, 2014.

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Correction of Error for Accounting of Portables Unlimited, LLC (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Current assets	$ 157,051,937	$ 188,730,143
Total assets	168,282,514	212,838,717
Current liabilities	155,198,039	156,752,818
Total liabilities	156,550,142	157,070,318
Non-controlling interest	(548,969)	3,000,849
Stockholders' equity	12,281,341	52,767,550
Net equity	11,732,372	55,768,399
Net revenues	0	0
Cost of sales	0	0
Gross profit	0	0
Loss from operations	(2,882,051)	(10,290,461)
Other (expense) income, net	(1,078,605)	717,397
Loss before income taxes from 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)
Loss from discontinued operations, net of tax	(23,149,034)	(11,178,671)
Loss on disposal, net of 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	$ (13.05)	$ (11.96)
Diluted	$ (13.05)	$ (11.96)
Previouly Reported
Current assets		193,879,917
Non-current assets		41,837,026
Total assets		235,716,943
Current liabilities		170,751,984
Non-current liabilities		317,500
Total liabilities		171,069,484
Non-controlling interest		12,590,782
Stockholders' equity		52,056,677
Net equity		64,647,459
Net revenues		49,773,552
Cost of sales		40,813,304
Gross profit		8,960,248
Total operating expenses		17,505,542
Loss from operations		(8,545,294)
Other (expense) income, net		(603,723)
Loss before income taxes from continuing operations		(9,149,017)
Income taxes for continuing operations		190,845
Loss from continuing operations		(9,339,862)
Loss from discontinued operations, net of tax		(11,178,671)
Loss on disposal, net of tax		11,860,025
Loss from discontinued operations		(23,038,696)
Net loss		(32,378,558)
less: Loss attributable to noncontrolling interest		73,953
Net loss attributable to Zoom Technologies Inc.		(32,452,511)
Basic		$ (11.96)
Diluted		$ (11.96)
Adjustment
Current assets		(5,149,774)
Non-current assets		(17,728,452)
Total assets		(22,878,226)
Current liabilities		(13,999,166)
Non-current liabilities
Total liabilities		(13,999,166)
Non-controlling interest		(9,589,933)
Stockholders' equity		710,873
Net equity		(8,879,060)
Net revenues		(49,773,552)
Cost of sales		(40,813,304)
Gross profit		(8,960,248)
Total operating expenses		(7,215,081)
Loss from operations		(1,745,167)
Other (expense) income, net		1,321,120
Loss before income taxes from continuing operations		(424,047)
Income taxes for continuing operations
Loss from continuing operations		(424,047)
Loss from discontinued operations, net of tax
Loss on disposal, net of tax
Loss from discontinued operations
Net loss		(424,047)
less: Loss attributable to noncontrolling interest		(424,047)
Net loss attributable to Zoom Technologies Inc.
Basic
Diluted
As Currently Reported
Current assets		188,730,143
Non-current assets		24,108,574
Total assets		212,838,717
Current liabilities		156,752,818
Non-current liabilities		317,500
Total liabilities		157,070,318
Non-controlling interest		3,000,849
Stockholders' equity		52,767,550
Net equity		55,768,399
Net revenues
Cost of sales
Gross profit
Total operating expenses		10,290,461
Loss from operations		(10,290,461)
Other (expense) income, net		717,397
Loss before income taxes from continuing operations		(9,573,064)
Income taxes for continuing operations		190,845
Loss from continuing operations		(9,763,909)
Loss from discontinued operations, net of tax		(11,178,671)
Loss on disposal, net of tax		11,860,025
Loss from discontinued operations		(23,038,696)
Net loss		(32,802,605)
less: Loss attributable to noncontrolling interest		(350,094)
Net loss attributable to Zoom Technologies Inc.		$ (32,452,511)
Basic		$ (11.96)
Diluted		$ (11.96)

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Income Tax (Schedule of Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Tax Schedule Of Effective Income Tax Rate Reconciliation Details
US statutory rates	34.00%	34.00%
Tax rate difference	(2.72%)	(1.33%)
Valuation allowance	(31.28%)	(32.67%)
State taxes	(4.83%)	(1.99%)
Tax per financial statements	(4.83%)	(1.99%)

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OPERATING RISK - Note 18

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

OPERATING RISK - Note 18

NOTE 18 - OPERATING RISK

• Industry risk

The industry in which we compete is a rapidly evolving, highly competitive and fragmented market driven by consumer preferences and quickly evolving technology. Increased competition may result in price reductions, reduced gross margin and loss of market share. Failure to compete successfully against current or future competitors could have a material adverse effect on the Company's business, operating results and financial condition.

• Exchange risk

The Company cannot guarantee the Renminbi and USD exchange rate will remain steady; therefore, the Company could post the same profit for two comparable periods and post higher or lower profit depending on exchange rate of Renminbi and USD. The exchange rate could fluctuate depending on changes in the political and economic environments without s

• Political risk

Currently, PRC is in a period of growth and is openly promoting business development in order to bring more business into PRC. Additionally PRC currently allows a Chinese corporation to be owned by a United States corporation. If the laws or regulations relating to ownership of a Chinese corporation are changed by the PRC government, the Company's ability to operate the PRC subsidiaries could be affected.

• Interest risk

The Company is exposed to interest rate risk arising from short-term variable rate borrowings from time to time. The Company's future interest expense will fluctuate in line with any change in borrowing rates.

The Company had outstanding warrants that are accounted for as derivative securities. Their values are re-measured at each reporting period. The quoted U.S. treasury rates with the maturities similar to those of the warrants are used as inputs in calculating their value; accordingly, the value of the warrants, are subject to fluctuations interest rates.

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Accounts Receivable (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Accounts Receivable Details
Accounts receivable	$ 757,956	$ 735,304
Less: Allowance for doubtful accounts	(757,956)	(735,304)
Accountants receivable, net	$ 0	$ 0

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Equity Method Investments (Tables)

12 Months Ended

Dec. 31, 2013

Equity Method Investments Tables

Summary Investment Holdings

Changes in Equity Method Investments
		Portables		SpreadZoom		Total
Balance December 31, 2011 (Restated)	$	9,160,273	$	-	$	9,160,273
Initial investment				12,342,542		12,342,542
Equity method investment income (loss)		425,746		(429,586)		(3,840)
Increase in investment through co-borrowing on bank line of credit		3,000,000				3,000,000
Reduction in equity interest from 55.0% to 50.1%		(735,000)				(735,000)
Reduction from repayment of bank line of credit		(5,001)				(5,001)
Balance December 31, 2012 (Restated)	$	11,846,018	$	11,912,956	$	23,758,974
Balance December 31, 2012 (Restated)		11,846,018		11,912,956		23,758,974
Equity method investment loss		105,606		(1,031,979)		(926,373)
Increase in investment through co-borrowing on bank term note		2,500,000				2,500,000
Reduction in investment through repayment of line of credit		(500,000)				(500,000)
Reduction from repayment on bank term note		(489,310)				(489,310)
Gain from default of promisssry note leading for fofeiture of ownership		(2,000,000)				(2,000,000)
Loss on disposal		(11,462,314)				(11,462,314)
Balance December 31, 2013	$	-	$	10,880,977	$	10,880,977

		December 31,		December 31,
		2013		2012
Financial Position of SpreadZoom				(Restated)
Current assets	$	17,811,982	$	42,772,581
Non-current assets		6,558,367		1,775,661
Total assets		24,370,349		44,548,242
Current liabilities		9,353,001		27,839,474
Non-current liabilities		-		-
Total liabilities		9,353,001		27,839,474
Net asset value	$	15,017,348	$	16,708,768
		For Years Ended
Results of Operations of SpreadZoom		December 31,
		2013		2012
				(Restated)
Net revenues	$	66,920,617	$	46,025,192
Cost of goods sold		65,000,788		45,859,806
Gross profit		1,919,829		165,386
Operating expenses		4,152,403		1,327,593
Operating loss		(2,232,574)		(1,162,207)
Other income (expenses), net		54,025		255,721
Income (loss) before taxes		(2,178,549)		(906,486)
less: Provision for income taxes		-		-
Net loss	$	(2,178,549)	$	(906,486)
Investment loss attributable to Zoom Technologies, Inc.	$	(1,031,979)	$	(429,586)

The Company accounted for its investment in Portables Unlimited, LLC using the equity method. The following are operating results of Portables for the year ended December 31, 2012 and from January 1, 2013 to July 15, 2013, the date of disposition.

		July 15,		December 31,
		2013		2012
Financial Position of Portables				(Restated)
Current assets	$	6,283,761	$	7,145,668
Non-current assets		2,515,896		2,542,977
Total assets		8,799,657		9,688,645
Current liabilities		14,570,582		16,994,165
Non-current liabilities		1,708,928		-
Total liabilities		16,279,510		16,994,165
Net asset value	$	(7,479,853)	$	(7,305,520)
		For the Period Ended		For Year Ended
Results of Operations of Portables		July 15,		December 31,
		2013		2012
				(Restated)
Net revenues	$	14,130,111	$	49,773,552
Cost of goods sold		10,341,986		40,813,304
Gross profit		3,788,125		8,960,248
Operating expenses		3,309,640		7,215,081
Operating income		478,485		1,745,167
Other income (expenses), net		(267,695)		(895,374)
Income (loss) before taxes		210,790		849,793
less: Provision for income taxes		-		-
Net loss	$	210,790	$	849,793
Investment loss attributable to Zoom Technologies, Inc.	$	105,606	$	425,746

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Discontinued Operations (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Results of Operations
Net revenues	$ 249,744,183	$ 329,099,574
Cost of sales	234,624,885	313,699,749
Gross profit	15,119,298	15,399,825
Operating expenses	35,270,830	24,463,419
Operating loss	(20,151,532)	(9,063,594)
Other income (expenses), net	(2,855,322)	(1,936,953)
Loss before taxes from discontinued operations	(23,006,854)	(11,000,547)
less: Provision for income taxes	142,180	178,124
Loss from discontinued operations, net of tax	(23,149,034)	(11,178,671)
Basic and diluted (loss) income per common share from discontinued operations:
Basic	$ (11.66)	$ (8.36)
Diluted	$ (11.66)	$ (8.36)
Financial Position
Cash and equivalents	2,848,859	3,245,529	916,426
Restricted cash	80,658,355	64,467,142
Notes receivable	669,583	548,218
Accounts receivable, net	20,225,872	35,642,961
Inventories, net	18,809,671	7,059,829
Other receivables and prepaid expenses	2,061,687	10,580,693
Advance to suppliers	224,913	3,004,016
Due from related parties	204,509	18,322,784
Construction in progress deposit	0	243,747
Property, plant and equipment, net	1,636,316	1,293,689
Intangible assets, net	0	342,682
Deferred tax assets, noncurrent	70,136	0
Total current assets	127,409,901	144,751,290
Total Assets of Discontinued Operations	127,409,901	144,751,290
Short-term loans	38,529,498	21,187,680
Notes payable	42,441,911	28,156,022
Accounts payable	42,843,584	16,255,076
Accrued expenses and other payables	19,643	1,013,986
Advances from customers	97,110	1,039,775
Taxes payable	(4,106,935)	(2,341,883)
Interest payable	0	110,835
Dividends payable	0	628,890
Due to related parties	19,284,688	72,298,478
Total current liabilities	139,109,499	138,348,859
Total Liabilities of Discontinued Operations	139,109,499	138,348,859
Net Assets of Discontinued Operations	$ (11,699,598)	$ 6,402,431

XML

Notes Payable (Tables)

12 Months Ended

Dec. 31, 2013

Notes Payable Tables

Notes payable

As of December 31, 2013 and 2012, the Company's notes payable consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Former Executives of Nollec	$	145,000	$	290,000
The Cellular Network Communications Group, Inc.		205,937		-
Total	$	350,937	$	290,000

XML

Property and Equipment Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2013 Y
Machinery and equipment
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	6
Electronic equipment
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	6
Transportation equipment
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	6
Leasehold improvements
Property, Plant and Equipment, Useful Life, Average	5
Computer equipment
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	6
Office equipment
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	6

XML

Stock Options Outstanding and Exercisable (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Stock Options Outstanding And Exercisable Details
Options Outstanding, Number of Shares	199,125	181,000
Options Outstanding, Weighted-Average Remaining Contractual Term (in years)	3 years 18 days
Options Outstanding, Weighted-Average Exercise Price Per Share	$ 12.58	$ 16.90
Options Exercisable, Number of Shares	144,958
Options Exercisable, Weighted-Average Exercise Price Per Share	$ 15.91

XML

Stockholders' Equity Common Stock (Narrative) (Details) (USD $)

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

Nov. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2013

July 16, 2013

Dec. 31, 2013

January 25, 2013 BOD

Dec. 31, 2013

January 25, 2013

Nov. 30, 2012

November 12 2012

Dec. 31, 2012

November 12 2012

Oct. 31, 2012

October 8 2012

Dec. 31, 2012

October 8 2012

May 31, 2012

May 22, 2012

Dec. 31, 2013

May 22, 2012

Dec. 31, 2012

Big May 22 2012

Dec. 31, 2012

July 2 2012

Dec. 31, 2012

June 25 2012

Dec. 31, 2012

September 6 2012

Dec. 31, 2012

February 28 2012

Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures

56,000

18,600

2,000

10,000

4,000

30,280

449,720

13,763

3,500

7,250

17,000

Common Stock, Price per Share

$ 6.50

$ 6.50

$ 0.80

$ 0.90

$ 1.12

$ 1.12

$ 1.03

$ 1.07

$ 0.98

$ 1.34

Share-based Compensation

$ 1,141,167

$ 7,416,937

$ 475,603

$ 120,900

$ 13,000

$ 13,333

$ 15,750

$ 944,412

$ 7,894

$ 21,846

$ 227,800

Options cancelled

0

Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized

$ 49,781

$ 66,667

$ 20,250

$ 4,092,452

$ 15,604

$ 0

Stockholders' Equity, Reverse Stock Split

On November 12, 2013, the Company effectuated a 10 for 1 reverse split of its common stock. All share numbers and per share amounts have been retroactively restated to reflect the reverse split.

XML

Accounting Policies (Fair Value of Financial Instruments) (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash and cash equivalents	$ 36,735	$ 8,351	$ 22,158
Restricted cash	19,632,865	19,044,294
Warrants	377	7,340
Level 1
Cash and cash equivalents	36,735	8,351
Restricted cash	19,632,865	19,044,294
Warrants	0	0
Level 2
Cash and cash equivalents	0	0
Restricted cash	0	0
Warrants	377	7,340
Level 3
Cash and cash equivalents	0	0
Restricted cash	0	0
Warrants	$ 0	$ 0

XML

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Note 2

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES - Note 2

NOTE 2 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The Company's accompanying consolidated balance sheet at December 31, 2013 includes the accounts of Gold Lion Holding Ltd and its wholly owned subsidiary Jiangsu Leimone, its 100%-owned subsidiary Silver Tech, and its wholly owned subsidiary, Zoom Sub. The Company's consolidated balance sheet also included the accounts of TCB Digital for which the Company owns 80% indirectly held through Jiangsu Leimone which has been classified as discontinued operations held for sale.

The Company's accompanying consolidated balance sheet at December 31, 2012, include the accounts of Gold Lion Holding Ltd and its wholly owned subsidiary Jiangsu Leimone, its 100%-owned subsidiary Silver Tech, and its wholly owned subsidiary Zoom Sub. The Company's consolidated balance sheet also included the accounts of TCB Digital for which the Company owns 80% indirectly held through Jiangsu Leimone, 100% of Ever Elite which wholly owns Nollec, indirectly held through Silver Tech, all of which have been classified as discontinued operations held for sale.

The Company's consolidated results of operations for the year ended December 31, 2013 from continuing operations included the results of Gold Lion, Silver Tech, Jiangsu Leimone, Zoom Sub; results of operations from Ever Elite and Nollec, up to the date of their disposition, and TCB Digital have been presented as discontinued operations. The Company's consolidated results of operations for the year ended December 31, 2012 from continuing operations included the results of Gold Lion, Silver Tech, Jiangsu Leimone, Zoom Sub; results of operations from Profit Harvest, CDE, Ever Elite, Nollec, and TCB Digital have been presented as discontinued operations.

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Noncontrolling interest represents the ownership interests in a subsidiary that was held by owners other than the parent and is part of the equity of the consolidated group. The noncontrolling interest is reported in the consolidated statement of financial position within equity, separately from the parent's equity. Net income or loss and comprehensive income or loss is attributed to the parent and the noncontrolling interest.  If losses attributable to the parent and the noncontrolling interest in a subsidiary exceed their interests in the subsidiary's equity, the excess, and any further losses attributable to the parent and the noncontrolling interest, is attributed to those interests.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The functional currency of the Company's continuing operation Jiangsu Leimone and its equity investment SpreadZoom is the Chinese Renminbi ("RMB"). The functional currency of the Company's continuing operation, Zoom Sub is United States Dollars ("USD" or "$"). The functional currency of the Company's discontinued operations, TCB Digital and Nollec is the RMB. The functional currency of the Company's discontinued operations Ever Elite and CDE is Hong Kong Dollars ("HKD"). The accompanying consolidated financial statements are translated and presented in the reporting currency of USD. The functional currency of its equity method investment, Portables is the USD.

Equity Method Accounting

In May 2012, the Company invested $12.3 million to establish a joint venture named SpreadZoom Technologies Co. Ltd., ("SpreadZoom"). The Company owns 47.4% of SpreadZoom and accounted for this investment under the equity method of accounting (ASC 323-30). Refer to "Note 19 - Equity Method Investments" for details.

The Company revised its accounting for Portables Unlimited, LLC. Previously, the Company accounted for the investment as a subsidiary under the consolidation method of accounting; as of the date of this report, Company retroactively changed its method of accounting for Portables to the equity method. Previously reported net income/(loss) attributable to the Company were unchanged; however, the consolidated balance sheet at December 31, 2012 no longer includes all of the assets and liabilities of Portables. As of December 31, 2013, Portables was no longer an investment of the Company. As disclosed above the Company completely wrote off the investment on July 15, 2013, recording a loss of approximately $11.5 million. At December 31, 2012, the Company was a joint borrower on a $3 million line of credit provided by M&T Bank. This line was refinanced in February of 2013 to be reduced to $2.5 million; concurrently, the Company and Portables co-borrow $2.5 million in a term note from M&T Bank. Both the line of credit and term note were accounted for as an increase to the investment amount when Portables was still owned by the Company. The investment was written off in July of 2013; however, at December 31, 2013, the maximum value of the line of credit of $2.5 million and the amortized balance of the term note are carried as liabilities on the Company's consolidated balance sheets. On May 20, 2014, Portables and M&T Banks released the Company from the obligation of repaying the line of credit and term note. Refer to "Note 9 - Short Term Loans" for further details.

Exclusion of Related Party Lessor from Consolidation

Portables, commencing in January 2009, subleased its principal facility from one of its members. The member began leasing the facility in December 2005 from a related party, AUM Realty, LLC ("AUM"). The Company's management has assessed whether AUM should be consolidated pursuant to FASB ASC 810 Consolidations. ASC 810 is not a "rules based" standard and thereby includes limited circumstances under which it can be conclusively determined whether an entity should be consolidated. Management believes that AUM is not a variable interest entity ("VIE") as defined in ASC 810 because AUM was adequately capitalized. Equity contributions from AUM's owners exceeded 20% of the acquisition costs of the property. Management believes that this is, according to ASC 810 criteria, "sufficient to permit the entity to finance its activities without additional subordinated financial support." Management believes that the same was true up to July 15, 2013, the date of disposition of Portables.

Based on this assessment, management believes that AUM is not a VIE because the Company does not make decisions that have significant impact on the performance of AUM; therefore, it is not consolidated as a component of these consolidated financial statements. If the matter were to be assessed differently, these consolidated financial statements would have included AUM's assets (principally land and building), liabilities (principally loan payable) and expenses, with the excess of AUM's assets over liabilities shown as a "non-controlling interest". AUM guarantees $1.7 million of the $3 million line of credit with M&T Bank for Portables Unlimited, LLC.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets.

Comprehensive Income

The Company follows the provisions of ASC 220 "Reporting Comprehensive Income", establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements.

ASC 220 defines comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities.

Foreign Currency Translation and Transactions

The accounts of the Company's Chinese subsidiaries are maintained in the RMB and the accounts of the U.S. parent company are maintained in the USD. The accounts of the Chinese subsidiaries were translated into USD in accordance with Financial Accounting Standards ("FASB") Accounting Standards Codification ("ASC") Topic 810 with the RMB as the functional currency for the Chinese subsidiaries. According to ASC 810, all assets and liabilities were translated at the exchange rate at the date of the balance sheet; stockholders' equity is translated at historical rates; the line items on the statement of operations are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with FASB ASC Topic 220. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the income statement.

Cash and Equivalents

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company maintains cash with various banks and trust companies located in China, Hong Kong and the United States. Cash accounts in China and Hong Kong are not insured or otherwise protected. Should any bank or trust company holding cash deposits become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash on deposit with that particular bank or trust company.

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Accounts are written off against the allowance when it becomes evident collection will not occur. For the contracted manufacturing activities, our standard terms for accounts receivable from our customers are between 60 to 75 days from close of the billing cycle; and for sales of own brand phones our terms include prepaid arrangements and extending receivable to customers up to 60 days. We also offer credit terms of up to 150 days in our trading activities to a certain customers. As of December 31, 2013, management concluded that the allowance for doubtful accounts, as disclosed in "Note 5 - Accounts Receivable" was adequate to cover any potential unrecoverable balances as a result of delinquency.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels.

In addition, the Company estimates net realizable value based on intended use, current market value and inventory ageing analyses. The Company writes down inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Gains or losses on disposals are reflected as gain or loss in the year of disposal. All ordinary repair and maintenance costs are expensed as incurred. Expenditures for maintenance and repairs are expensed as incurred. Major renewals and betterments are charged to the property accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed in the current period. 

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of assets. See "Note 7 - Property, Plant and Equipment" for details.

Capitalized Interest

Interest associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using weighted-average cost of the Company's outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or development activity is suspended for more than a brief period. There have not been material amounts of capitalized interest for the years ended December 31, 2013 and 2012.

Impairment of Long-lived Assets

In accordance with ASC 360, "Property, Plant and Equipment", the Company reviews the carrying values of long-lived assets, including property, plant and equipment and other intangible assets, whenever facts and circumstances indicate that the assets may be impaired. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If an asset is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs of disposal. The Company last performed annual reviews of its long-lived assets at December 31, 2013 and 2012. In 2012, the Company determined that certain fixed assets and goodwill were impaired based on the disposal of certain operations. The amount of impairment loss in 2012 was $9,048,334 (as restated).

Goodwill

The Company recognizes goodwill for the excess of the purchase price over the fair value of the identifiable net assets of the business acquired. ASC 350 "Intangible Assets-Goodwill and Other", an impairment test for goodwill is undertaken by the Company at the reporting unit level annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company recorded impairment of goodwill related to the following subsidiaries: Jiangsu Leimone, CDE, and Silver Tech. See "Note 3 - Merger and Acquisitions" for details.

Revenue Recognition

The Company recognizes sales in accordance with FASB ASC Topic 605, "Revenue Recognition."

The Company recognizes revenue when the following criteria are met:

(i) persuasive evidence of an arrangement exists;

(ii) delivery has occurred or services were rendered;

(iii) the price to the customer is fixed or determinable and,

(iv) collection of the resulting receivable is reasonably assured. Revenue is not recognized until title and risk of loss is transferred to the customer, which occurs upon delivery of goods, and objective evidence exists that customer acceptance provisions were met.

The Company bases its estimates on historical experience taking into consideration the type of products sold, the type of customer, and the type of specific transaction in each arrangement. Revenues represent the invoiced value of goods, net of value added tax ("VAT").

The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Deposits or advance payments from customers prior to delivery of goods and passage of title of goods are recorded as advanced from customers.

The Company's discontinued operation, Nollec is in the mobile phone design, software integration and mobile solution R&D business. Nollec recognizes revenue under the percentage of completion method ASC Topic 605- 35-25 (Construction - Type and Production - Type Contracts) when reasonably dependable estimates can be made and all the following conditions exist:

1. Contracts executed by the parties normally include provisions that clearly specify the enforceable rights regarding goods or services to be provided and received by the parties, the consideration to be exchanged, and the manner and terms of settlement.
2. The buyer can be expected to satisfy all obligations under the contract.
3. The contractor can be expected to perform all contractual obligations.

Estimates of cost to complete is reviewed periodically and revised as appropriate to reflect new information. When the current estimates of total contract revenue and contract cost indicate a loss, a provision for the entire loss on the contract is made.

Income is recognized as the percentage of estimated total income, and is determined by dividing incurred costs to date by estimated total costs after giving effect to adjustments, if any, in estimates of costs to completion based upon the most recent information. Percentage of completion is based on labor hours incurred to date divided by total estimated labor hours for the contract.

Royalty income on sales of licensed products by its customers is recorded when the customers report sales to the Company. Royalty income is reported monthly and recorded in the period in which the product is sold. The Company has the right to audit the books of the licensees.

The Company's discontinued operation CDE is in the business of video games and applications for mobile phones and mobile platforms development. Revenue is recognized in accordance with ASC 985-605-55-125. Cost of Software Development Revenue is accounted for under ASC 985-20 to be sold, leased or otherwise marketed.

CDE capitalizes cost of development of software for hosting purpose in accordance with ASC subtopic 350-40 ("ASC 350-40"), Intangibles-Goodwill and Other: Internal-Use. As such, CDE expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance. Costs incurred in the development phase are capitalized and amortized over the estimated product life. Since the inception of CDE, the amount of costs qualifying for capitalization has been insignificant and as a result all internally used software development costs have been expensed as incurred.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740 "Income Taxes", previously SFAS No. 109. Under this method, deferred income taxes are recognized for the estimated tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts and each year-end based on enacted tax laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when, in management's opinion; it is more likely than not that some portion of the deferred tax assets will not be realized. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.

Uncertain Tax Positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. There were no uncertain tax positions in 2013 and 2012. The Company's evaluation of uncertain tax positions was performed for the tax years ended December 31, 2009 and forward, the tax years which remain subject to examination as of December 31, 2013.

Operating Leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company that do not meet the capitalization criteria of ASC 840 "Leases", are accounted for as operating leases. Rental payables under operating leases are expensed on the straight-line basis over the lease term.

Research and Development Costs

Research and development costs are related primarily to the development of cell phone technology, video games and applications for mobile phones and mobile platforms development. Research and development costs are expensed as incurred.

Loss per Share

The Company reports earnings (loss) per share in accordance with the provisions of ASC 260 "Earnings Per Share". ASC 260 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock using the treasury method.

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculation dates. When the Company's results from operations are a net loss, dilutive securities are not included in diluted loss per share because they would be considered anti-dilutive.

Fair Values of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures", defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows:

• Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

• Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of December 31, 2013 and 2012 are as follows:

						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2013		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	36,735	$	36,735	$	-	$	-
Restricted cash	$	19,632,865	$	19,632,865	$	-	$	-
Warrants	$	377	$	-	$	377	$	-
						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2012		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	8,351	$	8,351	$	-	$	-
Restricted cash	$	19,044,294	$	19,044,294	$	-	$	-
Warrants	$	7,340	$	-	$	7,340	$	-

The Company's financial instruments include cash and equivalents, restricted cash, accounts receivable, notes receivables, other receivables, accounts payable, notes payable, and warrants. Cash and cash equivalents consist primarily of high rated money market funds at a variety of well-known institutions with original maturities of three months or less. Restricted cash represents time deposits on account to secure short-term bank loans and notes payable. Management estimates the carrying amounts of the non-related party financial instruments approximate their fair values due to their short-term nature.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and equivalents and trade and bills receivables. As of December 31, 2013 and 2012, substantially all of the Company's cash and equivalents and restricted cash were held by major financial institutions located in the PRC, Hong Kong and the United States, which management believes are of high credit quality. With respect to trade and notes receivables, the Company extends credit based on an evaluation of the customer's financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

Notes receivable are undertaken by the banks to honor the payments at maturity and the customers are required to place deposits with the banks equivalent to certain percentage of the notes amount as collateral. These notes receivable can be sold to any third party at a discount before maturity. The Company does not maintain an allowance for notes receivable in the absence of bad debt experience and the payments are undertaken by the banks.

Non-controlling Interests

The Company follows ASC 810 for reporting non-controlling interest ("NCI") in a subsidiary. As a result, the Company reports NCI as a separate component of Equity in the Consolidated Balance Sheet. Additionally, the Company reports the portion of net income and comprehensive income attributed to the Company and NCI separately in the Consolidated Statement of Income.

Statement of Cash Flows

In accordance with ASC 230, "Statement of Cash Flows", cash flows from the Company's operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.

Recent Accounting Pronouncements

The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company has not yet determined the effect of the adoption of this standard and it is expected to have a material impact on the Company's consolidated financial position and results of operations.

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Warrants (Narrative) (Details)

12 Months Ended

Dec. 31, 2013

Series A

Exercise price, in dollars

60.00

Warrant exercise term

5 years

Description of warrants

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Series A Warrants: The Series A warrants have an exercise price of $60.00 and a term of 5 years from the issue date subject to the Exchange Cap (as defined in the agreement).

Anti-dilution Adjustments for Certain Warrants: Since the private placement in November 2010 involved sales of the Company's stock at a price that activated anti-dilution provisions in the Series A, C, F and certain placement agent warrants, the exercise price of these warrants is adjusted to $37.40 per share and the number of warrants eligible is multiplied by a factor of 60 / 37.40 or 1.60 with fractional shares rounding up.

Series B

Exercise price, in dollars

0.10

Warrant exercise term

3 months

Description of warrants

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Series B Warrants: The Series B warrants have an exercise price of $0.10 and a term of three (3) months from the issue date provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement) until the warrant can be exercised in full by the holder thereof without breaching the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement). All B Warrants were exercised in December 2009.

Series C

Exercise price, in dollars

60.00

Warrant exercise term

5 years

Description of warrants

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Series C Warrants: The Series C warrants shall be exercisable only upon the exercise of the Series B warrants. The Series C warrants shall have an exercise price of $60.00 and a term of 5 years from the issue date.

Anti-dilution Adjustments for Certain Warrants: Since the private placement in November 2010 involved sales of the Company's stock at a price that activated anti-dilution provisions in the Series A, C, F and certain placement agent warrants, the exercise price of these warrants is adjusted to $37.40 per share and the number of warrants eligible is multiplied by a factor of 60 / 37.40 or 1.60 with fractional shares rounding up.

Series D

Exercise price, in dollars

0.10

Warrant exercise term

3 months

Description of warrants

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Series D Warrants: The Series D warrants shall be exercisable if the Company fails to meet certain performance criteria for the year 2009. The Series D warrant shall have an exercise price of $0.10 and a term of exercise equal to three (3) months from the date the Maximum Eligibility Date (as defined in the agreement); provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap (as defined in the agreement) until the warrant can be exercised in full by the holder without breaching the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement). Due to the Net Income of Zoom as reported in the Company's annual report for the year 2009 exceeding the eligibility threshold pursuant to the agreement, the Series D Warrants became ineligible for exercise.

Series E

Exercise price, in dollars

0.10

Warrant exercise term

3 months

Description of warrants

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Series E Warrants: The Series E warrants shall be exercisable if the Company fails to meet certain performance criteria for the year 2010. The Series E warrants shall have an exercise price of $0.01 and a term of three (3) months from the date the Maximum Eligibility Date (as defined in the agreement); provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) until the Warrant can be exercised in full by the holder thereof without breaching the Beneficial Ownership Limitation (as defined in the agreement). Due to the Net Income of Zoom as reported in the Company's annual report for the year 2010 exceeding the eligibility threshold pursuant to the agreement, the Series E Warrants became ineligible for exercise.

Series F

Exercise price, in dollars

60.00

Warrant exercise term

5 years

Description of warrants

The Company granted on May 6, 2010, Series F warrants to the above investors for their temporary forfeiture of their right to participate in the Company's future financings.

Series F Warrants: The Series F warrants have an exercise price of $60.00 and a term of 5 years from the issue date. The Company issued 37,500 Series F warrants to investors who participated in private placement transaction pursuant to the Securities Purchase Agreement dated October 15, 2009, to temporarily waive their right for a period of eight months to participate in a future offering of the Company. The investors originally have a period of twenty-four months ("Rights Period") in which they have the right to participate, and for providing a temporary waiver, an eight-month duration is added to the original expiration of the Rights Period.

Anti-dilution Adjustments for Certain Warrants: Since the private placement in November 2010 involved sales of the Company's stock at a price that activated anti-dilution provisions in the Series A, C, F and certain placement agent warrants, the exercise price of these warrants is adjusted to $37.40 per share and the number of warrants eligible is multiplied by a factor of 60 / 37.40 or 1.60 with fractional shares rounding up.

Series G

Exercise price, in dollars

47.10

Warrant exercise term

5 years

Description of warrants

The Company granted Series G warrants to the accredited investors as part of its private place offering on November 15, 2010.

Series G Warrants: The Series G warrants shall have an exercise price of $47.10 and a term of 5 years from the issue date.

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2013

Discontinued Operations Tables

Schedule of Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures

The sale of Profit Harvest and CDE closed on December 31, 2012. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec closed on April 5, 2013. The sale of TCB Digital closed on May 16, 2014.

Results of Operations		Years Ended December 31,
		2013		2012
				(Restated)
Net revenues	$	249,744,183	$	329,099,574
Cost of sales		234,624,885		313,699,749
Gross profit		15,119,298		15,399,825
Operating expenses		35,270,830		24,463,419
Operating income		(20,151,532)		(9,063,594)
Other income (expenses), net		(2,855,322)		(1,936,953)
(Loss) income before taxes from discontinued operations		(23,006,854)		(11,000,547)
less: Provision for income taxes		142,180		178,124
Loss from discontinued operations, net of tax	$	(23,149,034)	$	(11,178,671)
Basic and diluted (loss) income per common share from
discontinued operations:
Basic	$	(11.66)	$	(8.36)
Diluted	$	(11.66)	$	(8.36)

Financial Position		December 31,		December 31,
		2013		2012
				(Restated)
Cash and equivalents	$	2,848,859	$	3,245,529
Restricted cash		80,658,355		64,467,142
Notes receivable		669,583		548,218
Accounts receivable, net		20,225,872		35,642,961
Inventories, net		18,809,671		7,059,829
Other receivables and prepaid expenses		2,061,687		10,580,693
Advance to suppliers		224,913		3,004,016
Due from related parties		204,509		18,322,784
Construction in progress deposit		-		243,747
Property, plant and equipment, net		1,636,316		1,293,689
Intangible assets		-		342,682
Deferred tax assets, noncurrent		70,136		-
Total current assets		127,409,901		144,751,290
Total Assets of Discontinued Operations	$	127,409,901	$	144,751,290
Short-term loans	$	38,529,498	$	21,187,680
Notes payable		42,441,911		28,156,022
Accounts payable		42,843,584		16,255,076
Accrued expenses and other payables		19,643		1,013,986
Advances from customers		97,110		1,039,775
Taxes payable		(4,106,935)		(2,341,883)
Interest payable		-		110,835
Dividends payable		-		628,890
Due to related parties		19,284,688		72,298,478
Total current liabilities		139,109,499		138,348,859
Total Liabilities of Discontinued Operations		139,109,499		138,348,859
Net Assets of Discontinued Operations	$	(11,699,598)	$	6,402,431

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CORRECTION OF ERROR FOR ACCOUNTING OF PORTABLES UNLIMITED, LLC. - Note 22

12 Months Ended

Dec. 31, 2013

Correction Of Error For Accounting Of Portables Unlimited Llc. - Note 22

CORRECTION OF ERROR FOR ACCOUNTING OF PORTABLES UNLIMITED, LLC. - Note 22

NOTE 22 - CORRECTION OF ERROR FOR ACCOUNTING OF PORTABLES UNLIMITED, LLC.

On May 5, 2014, the Company concluded that the consolidated balance sheet, and related consolidated statement of operations and comprehensive income/(loss), stockholders' equity and statements of cash flows included in Form 10K Annual Report, dated April 15, 2013 (the "2012 Financials") will need to be restated as a result of the Company erroneous application of the consolidation method of accounting for its former 50.1% equity interest investment in Portables Unlimited, LLC ("Portables"). The Company's management determined during the fourth quarter of the year ended December 31, 2013 that the Company's former investment in Portables was incorrectly accounted for 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 unilateral control 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.

The following tables show the previously report amounts, the required adjustment and the currently restated amounts related to the Company financial position and results of operations at December 31, 2012 (as restated), and for the year then ended.

		December 31, 2012
		As Previously				As Currently
		Reported		Adjustment		Reported
Financial Position						(Restated)
Current assets	$	193,879,917	$	(5,149,774)	$	188,730,143
Non-current assets		41,837,026		(17,728,452)		24,108,574
Total assets		235,716,943		(22,878,226)		212,838,717
Current liabilities		170,751,984		(13,999,166)		156,752,818
Non-current liabilities		317,500		-		317,500
Total liabilities		171,069,484		(13,999,166)		157,070,318
Stockholders' equity		52,056,677		710,873		52,767,550
Non-controlling interest		12,590,782		(9,589,933)		3,000,849
Net equity		64,647,459		(8,879,060)		55,768,399

		For the Year Ended December 31, 2012
		As Previously				As Currently
		Reported		Adjustment		Reported
						(Restated)
Net revenues	$	49,773,552	$	(49,773,552)	$	-
Cost of sales		40,813,304		(40,813,304)		-
Gross profit		8,960,248		(8,960,248)		-
Total operating expenses		17,505,542		(7,215,081)		10,290,461
Loss from operations		(8,545,294)		(1,745,167)		(10,290,461)
Other (expense) income, net		(603,723)		1,321,120		717,397
Loss before income taxes for continuing operations		(9,149,017)		(424,047)		(9,573,064)
Income taxes for continuing operations		190,845		-		190,845
Loss from continuing operations		(9,339,862)		(424,047)		(9,763,909)
Discontinued Operations:
Loss from discontinued operations, net of tax		(11,178,671)		-		(11,178,671)
Loss on disposal, net tax		(11,860,025)		-		(11,860,025)
Loss from discontinued operations		(23,038,696)		-		(23,038,696)
Net loss	$	(32,378,558)	$	(424,047)	$	(32,802,605)
less: Income (loss) attributable to noncontrolling interest		73,953		(424,047)		(350,094)
Net loss attributable to Zoom Technologies, Inc.	$	(32,452,511)	$	-	$	(32,452,511)
Basic and diluted loss per common share
Basic	$	(11.96)	$	-	$	(11.96)
Diluted	$	(11.96)	$	-	$	(11.96)

These corrections will be made to applicable prior period financial information in future filings with the SEC including this filing.

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SUBSEQUENT EVENT - Note 21

12 Months Ended

Dec. 31, 2013

Subsequent Event - Note 21

SUBSEQUENT EVENT - Note 21

NOTE 21 - SUBSEQUENT EVENT

On December 31, 2012, the Company entered into a Securities Purchase Agreement with BZCC, which among other assets included the sale of TCB Digital by the Company to BZCC. On or about December 30, 2013, the Company consented to BZCC assigning its purchase rights to Huatianli; on May 15, 2014, the Company completed the sale of TCB Digital to Huatianli which is evidenced by the recording of transfer ownership with the PRC government, and the Company's receipt of payment in full from Huatianli. Additionally, the Company is obligated to refund a purchase deposit of RMB 52 million to BZCC for funds previously deposited in a restricted trust account in the Company's name.

On May 20, 2014, the Company received releases from M&T Bank for balances owed under both a line of credit and term note owed at December 31, 2013. As result of these releases, the liabilities will be written off as gains in the second quarter of 2014.

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Intangible Assets (Narrative1) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Intangible Assets Narrative1 Details
Amortization of intangible assets	$ 0	$ 0

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Correction of Error (Tables)

12 Months Ended

Dec. 31, 2013

Correction Of Error Tables

Restatement to Prior Year Income

The following tables show the previously report amounts, the required adjustment and the currently restated amounts related to the Company financial position and results of operations at December 31, 2012 (as restated), and for the year then ended.

		December 31, 2012
		As Previously				As Currently
		Reported		Adjustment		Reported
Financial Position						(Restated)
Current assets	$	193,879,917	$	(5,149,774)	$	188,730,143
Non-current assets		41,837,026		(17,728,452)		24,108,574
Total assets		235,716,943		(22,878,226)		212,838,717
Current liabilities		170,751,984		(13,999,166)		156,752,818
Non-current liabilities		317,500		-		317,500
Total liabilities		171,069,484		(13,999,166)		157,070,318
Stockholders' equity		52,056,677		710,873		52,767,550
Non-controlling interest		12,590,782		(9,589,933)		3,000,849
Net equity		64,647,459		(8,879,060)		55,768,399

		For the Year Ended December 31, 2012
		As Previously				As Currently
		Reported		Adjustment		Reported
						(Restated)
Net revenues	$	49,773,552	$	(49,773,552)	$	-
Cost of sales		40,813,304		(40,813,304)		-
Gross profit		8,960,248		(8,960,248)		-
Total operating expenses		17,505,542		(7,215,081)		10,290,461
Loss from operations		(8,545,294)		(1,745,167)		(10,290,461)
Other (expense) income, net		(603,723)		1,321,120		717,397
Loss before income taxes for continuing operations		(9,149,017)		(424,047)		(9,573,064)
Income taxes for continuing operations		190,845		-		190,845
Loss from continuing operations		(9,339,862)		(424,047)		(9,763,909)
Discontinued Operations:
Loss from discontinued operations, net of tax		(11,178,671)		-		(11,178,671)
Loss on disposal, net tax		(11,860,025)		-		(11,860,025)
Loss from discontinued operations		(23,038,696)		-		(23,038,696)
Net loss	$	(32,378,558)	$	(424,047)	$	(32,802,605)
less: Income (loss) attributable to noncontrolling interest		73,953		(424,047)		(350,094)
Net loss attributable to Zoom Technologies, Inc.	$	(32,452,511)	$	-	$	(32,452,511)
Basic and diluted loss per common share
Basic	$	(11.96)	$	-	$	(11.96)
Diluted	$	(11.96)	$	-	$	(11.96)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

Principles of Consolidation

Basis of Presentation and Consolidation

The Company's accompanying consolidated balance sheet at December 31, 2013 includes the accounts of Gold Lion Holding Ltd and its wholly owned subsidiary Jiangsu Leimone, its 100%-owned subsidiary Silver Tech, and its wholly owned subsidiary, Zoom Sub. The Company's consolidated balance sheet also included the accounts of TCB Digital for which the Company owns 80% indirectly held through Jiangsu Leimone which has been classified as discontinued operations held for sale.

The Company's accompanying consolidated balance sheet at December 31, 2012, include the accounts of Gold Lion Holding Ltd and its wholly owned subsidiary Jiangsu Leimone, its 100%-owned subsidiary Silver Tech, and its wholly owned subsidiary Zoom Sub. The Company's consolidated balance sheet also included the accounts of TCB Digital for which the Company owns 80% indirectly held through Jiangsu Leimone, 100% of Ever Elite which wholly owns Nollec, indirectly held through Silver Tech, all of which have been classified as discontinued operations held for sale.

The Company's consolidated results of operations for the year ended December 31, 2013 from continuing operations included the results of Gold Lion, Silver Tech, Jiangsu Leimone, Zoom Sub; results of operations from Ever Elite and Nollec, up to the date of their disposition, and TCB Digital have been presented as discontinued operations. The Company's consolidated results of operations for the year ended December 31, 2012 from continuing operations included the results of Gold Lion, Silver Tech, Jiangsu Leimone, Zoom Sub; results of operations from Profit Harvest, CDE, Ever Elite, Nollec, and TCB Digital have been presented as discontinued operations.

The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Noncontrolling interest represents the ownership interests in a subsidiary that was held by owners other than the parent and is part of the equity of the consolidated group. The noncontrolling interest is reported in the consolidated statement of financial position within equity, separately from the parent's equity. Net income or loss and comprehensive income or loss is attributed to the parent and the noncontrolling interest.  If losses attributable to the parent and the noncontrolling interest in a subsidiary exceed their interests in the subsidiary's equity, the excess, and any further losses attributable to the parent and the noncontrolling interest, is attributed to those interests.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The functional currency of the Company's continuing operation Jiangsu Leimone and its equity investment SpreadZoom is the Chinese Renminbi ("RMB"). The functional currency of the Company's continuing operation, Zoom Sub is United States Dollars ("USD" or "$"). The functional currency of the Company's discontinued operations, TCB Digital and Nollec is the RMB. The functional currency of the Company's discontinued operations Ever Elite and CDE is Hong Kong Dollars ("HKD"). The accompanying consolidated financial statements are translated and presented in the reporting currency of USD. The functional currency of its equity method investment, Portables is the USD.

Exclusion of Related Party Lessor from Consolidation

Portables, commencing in January 2009, subleased its principal facility from one of its members. The member began leasing the facility in December 2005 from a related party, AUM Realty, LLC ("AUM"). The Company's management has assessed whether AUM should be consolidated pursuant to FASB ASC 810 Consolidations. ASC 810 is not a "rules based" standard and thereby includes limited circumstances under which it can be conclusively determined whether an entity should be consolidated. Management believes that AUM is not a variable interest entity ("VIE") as defined in ASC 810 because AUM was adequately capitalized. Equity contributions from AUM's owners exceeded 20% of the acquisition costs of the property. Management believes that this is, according to ASC 810 criteria, "sufficient to permit the entity to finance its activities without additional subordinated financial support." Management believes that the same was true up to July 15, 2013, the date of disposition of Portables.

Based on this assessment, management believes that AUM is not a VIE because the Company does not make decisions that have significant impact on the performance of AUM; therefore, it is not consolidated as a component of these consolidated financial statements. If the matter were to be assessed differently, these consolidated financial statements would have included AUM's assets (principally land and building), liabilities (principally loan payable) and expenses, with the excess of AUM's assets over liabilities shown as a "non-controlling interest". AUM guarantees $1.7 million of the $3 million line of credit with M&T Bank for Portables Unlimited, LLC.

Equity Method Accounting

Equity Method Accounting

In May 2012, the Company invested $12.3 million to establish a joint venture named SpreadZoom Technologies Co. Ltd., ("SpreadZoom"). The Company owns 47.4% of SpreadZoom and accounted for this investment under the equity method of accounting (ASC 323-30). Refer to "Note 19 - Equity Method Investments" for details.

The Company revised its accounting for Portables Unlimited, LLC. Previously, the Company accounted for the investment as a subsidiary under the consolidation method of accounting; as of the date of this report, Company retroactively changed its method of accounting for Portables to the equity method. Previously reported net income/(loss) attributable to the Company were unchanged; however, the consolidated balance sheet at December 31, 2012 no longer includes all of the assets and liabilities of Portables. As of December 31, 2013, Portables was no longer an investment of the Company. As disclosed above the Company completely wrote off the investment on July 15, 2013, recording a loss of approximately $11.5 million. At December 31, 2012, the Company was a joint borrower on a $3 million line of credit provided by M&T Bank. This line was refinanced in February of 2013 to be reduced to $2.5 million; concurrently, the Company and Portables co-borrow $2.5 million in a term note from M&T Bank. Both the line of credit and term note were accounted for as an increase to the investment amount when Portables was still owned by the Company. The investment was written off in July of 2013; however, at December 31, 2013, the maximum value of the line of credit of $2.5 million and the amortized balance of the term note are carried as liabilities on the Company's consolidated balance sheets. On May 20, 2014, Portables and M&T Banks released the Company from the obligation of repaying the line of credit and term note. Refer to "Note 9 - Short Term Loans" for further details.

Basis of Presentation

Basis of Presentation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). The functional currency of the Company's continuing operation Jiangsu Leimone and its equity investment SpreadZoom is the Chinese Renminbi ("RMB"). The functional currency of the Company's continuing operation, Zoom Sub is United States Dollars ("USD" or "$"). The functional currency of the Company's discontinued operations, TCB Digital and Nollec is the RMB. The functional currency of the Company's discontinued operations Ever Elite and CDE is Hong Kong Dollars ("HKD"). The accompanying consolidated financial statements are translated and presented in the reporting currency of USD. The functional currency of its equity method investment, Portables is the USD.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Risks and Uncertainties

Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history, foreign currency exchange rates and the volatility of public markets.

Comprehensive Income

Comprehensive Income

The Company follows the provisions of ASC 220 "Reporting Comprehensive Income", establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements.

ASC 220 defines comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities.

Foreign Currency Transactions

Foreign Currency Transactions

The accounts of the Company's Chinese subsidiaries are maintained in the RMB and the accounts of the U.S. parent company are maintained in the USD. The accounts of the Chinese subsidiaries were translated into USD in accordance with Financial Accounting Standards ("FASB") Accounting Standards Codification ("ASC") Topic 810 with the RMB as the functional currency for the Chinese subsidiaries. According to ASC 810, all assets and liabilities were translated at the exchange rate at the date of the balance sheet; stockholders' equity is translated at historical rates; the line items on the statement of operations are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with FASB ASC Topic 220. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the income statement.

Cash and Equivalents

Cash and Equivalents

For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company maintains cash with various banks and trust companies located in China, Hong Kong and the United States. Cash accounts in China and Hong Kong are not insured or otherwise protected. Should any bank or trust company holding cash deposits become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash on deposit with that particular bank or trust company.

Accounts Receivable

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Accounts are written off against the allowance when it becomes evident collection will not occur. For the contracted manufacturing activities, our standard terms for accounts receivable from our customers are between 60 to 75 days from close of the billing cycle; and for sales of own brand phones our terms include prepaid arrangements and extending receivable to customers up to 60 days. We also offer credit terms of up to 150 days in our trading activities to a certain customers. As of December 31, 2013, management concluded that the allowance for doubtful accounts, as disclosed in "Note 5 - Accounts Receivable" was adequate to cover any potential unrecoverable balances as a result of delinquency.

Inventories

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels.

In addition, the Company estimates net realizable value based on intended use, current market value and inventory ageing analyses. The Company writes down inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Gains or losses on disposals are reflected as gain or loss in the year of disposal. All ordinary repair and maintenance costs are expensed as incurred. Expenditures for maintenance and repairs are expensed as incurred. Major renewals and betterments are charged to the property accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed in the current period. 

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of assets. See "Note 7 - Property, Plant and Equipment" for details.

Capitalized Interest

Capitalized Interest

Interest associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using weighted-average cost of the Company's outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or development activity is suspended for more than a brief period. There have not been material amounts of capitalized interest for the years ended December 31, 2013 and 2012.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

In accordance with ASC 360, "Property, Plant and Equipment", the Company reviews the carrying values of long-lived assets, including property, plant and equipment and other intangible assets, whenever facts and circumstances indicate that the assets may be impaired. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If an asset is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs of disposal. The Company last performed annual reviews of its long-lived assets at December 31, 2013 and 2012. In 2012, the Company determined that certain fixed assets and goodwill were impaired based on the disposal of certain operations. The amount of impairment loss in 2012 was $9,048,334 (as restated).

Goodwill

Goodwill

The Company recognizes goodwill for the excess of the purchase price over the fair value of the identifiable net assets of the business acquired. ASC 350 "Intangible Assets-Goodwill and Other", an impairment test for goodwill is undertaken by the Company at the reporting unit level annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company recorded impairment of goodwill related to the following subsidiaries: Jiangsu Leimone, CDE, and Silver Tech. See "Note 3 - Merger and Acquisitions" for details.

Revenue Recognition

Revenue Recognition

The Company recognizes sales in accordance with FASB ASC Topic 605, "Revenue Recognition."

The Company recognizes revenue when the following criteria are met:

(i) persuasive evidence of an arrangement exists;

(ii) delivery has occurred or services were rendered;

(iii) the price to the customer is fixed or determinable and,

(iv) collection of the resulting receivable is reasonably assured. Revenue is not recognized until title and risk of loss is transferred to the customer, which occurs upon delivery of goods, and objective evidence exists that customer acceptance provisions were met.

The Company bases its estimates on historical experience taking into consideration the type of products sold, the type of customer, and the type of specific transaction in each arrangement. Revenues represent the invoiced value of goods, net of value added tax ("VAT").

The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Deposits or advance payments from customers prior to delivery of goods and passage of title of goods are recorded as advanced from customers.

The Company's discontinued operation, Nollec is in the mobile phone design, software integration and mobile solution R&D business. Nollec recognizes revenue under the percentage of completion method ASC Topic 605- 35-25 (Construction - Type and Production - Type Contracts) when reasonably dependable estimates can be made and all the following conditions exist:

1. Contracts executed by the parties normally include provisions that clearly specify the enforceable rights regarding goods or services to be provided and received by the parties, the consideration to be exchanged, and the manner and terms of settlement.
2. The buyer can be expected to satisfy all obligations under the contract.
3. The contractor can be expected to perform all contractual obligations.

Estimates of cost to complete is reviewed periodically and revised as appropriate to reflect new information. When the current estimates of total contract revenue and contract cost indicate a loss, a provision for the entire loss on the contract is made.

Income is recognized as the percentage of estimated total income, and is determined by dividing incurred costs to date by estimated total costs after giving effect to adjustments, if any, in estimates of costs to completion based upon the most recent information. Percentage of completion is based on labor hours incurred to date divided by total estimated labor hours for the contract.

Royalty income on sales of licensed products by its customers is recorded when the customers report sales to the Company. Royalty income is reported monthly and recorded in the period in which the product is sold. The Company has the right to audit the books of the licensees.

The Company's discontinued operation CDE is in the business of video games and applications for mobile phones and mobile platforms development. Revenue is recognized in accordance with ASC 985-605-55-125. Cost of Software Development Revenue is accounted for under ASC 985-20 to be sold, leased or otherwise marketed.

CDE capitalizes cost of development of software for hosting purpose in accordance with ASC subtopic 350-40 ("ASC 350-40"), Intangibles-Goodwill and Other: Internal-Use. As such, CDE expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance. Costs incurred in the development phase are capitalized and amortized over the estimated product life. Since the inception of CDE, the amount of costs qualifying for capitalization has been insignificant and as a result all internally used software development costs have been expensed as incurred.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740 "Income Taxes", previously SFAS No. 109. Under this method, deferred income taxes are recognized for the estimated tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts and each year-end based on enacted tax laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when, in management's opinion; it is more likely than not that some portion of the deferred tax assets will not be realized. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.

Uncertain Tax Positions

Uncertain Tax Positions

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. There were no uncertain tax positions in 2013 and 2012. The Company's evaluation of uncertain tax positions was performed for the tax years ended December 31, 2009 and forward, the tax years which remain subject to examination as of December 31, 2013.

Operating Leases

Operating Leases

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company that do not meet the capitalization criteria of ASC 840 "Leases", are accounted for as operating leases. Rental payables under operating leases are expensed on the straight-line basis over the lease term.

Research and Development Costs

Research and Development Costs

Research and development costs are related primarily to the development of cell phone technology, video games and applications for mobile phones and mobile platforms development. Research and development costs are expensed as incurred.

Loss per Share

Loss per Share

The Company reports earnings (loss) per share in accordance with the provisions of ASC 260 "Earnings Per Share". ASC 260 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock using the treasury method.

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculation dates. When the Company's results from operations are a net loss, dilutive securities are not included in diluted loss per share because they would be considered anti-dilutive.

Fair Values of Financial Instruments

Fair Values of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures", defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows:

• Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

• Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of December 31, 2013 and 2012 are as follows:

						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2013		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	36,735	$	36,735	$	-	$	-
Restricted cash	$	19,632,865	$	19,632,865	$	-	$	-
Warrants	$	377	$	-	$	377	$	-
						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2012		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	8,351	$	8,351	$	-	$	-
Restricted cash	$	19,044,294	$	19,044,294	$	-	$	-
Warrants	$	7,340	$	-	$	7,340	$	-

The Company's financial instruments include cash and equivalents, restricted cash, accounts receivable, notes receivables, other receivables, accounts payable, notes payable, and warrants. Cash and cash equivalents consist primarily of high rated money market funds at a variety of well-known institutions with original maturities of three months or less. Restricted cash represents time deposits on account to secure short-term bank loans and notes payable. Management estimates the carrying amounts of the non-related party financial instruments approximate their fair values due to their short-term nature.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and equivalents and trade and bills receivables. As of December 31, 2013 and 2012, substantially all of the Company's cash and equivalents and restricted cash were held by major financial institutions located in the PRC, Hong Kong and the United States, which management believes are of high credit quality. With respect to trade and notes receivables, the Company extends credit based on an evaluation of the customer's financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

Notes receivable are undertaken by the banks to honor the payments at maturity and the customers are required to place deposits with the banks equivalent to certain percentage of the notes amount as collateral. These notes receivable can be sold to any third party at a discount before maturity. The Company does not maintain an allowance for notes receivable in the absence of bad debt experience and the payments are undertaken by the banks.

Non-controlling Interests

Non-controlling Interests

The Company follows ASC 810 for reporting non-controlling interest ("NCI") in a subsidiary. As a result, the Company reports NCI as a separate component of Equity in the Consolidated Balance Sheet. Additionally, the Company reports the portion of net income and comprehensive income attributed to the Company and NCI separately in the Consolidated Statement of Income.

Statement of Cash Flows

Statement of Cash Flows

In accordance with ASC 230, "Statement of Cash Flows", cash flows from the Company's operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company has not yet determined the effect of the adoption of this standard and it is expected to have a material impact on the Company's consolidated financial position and results of operations.

Correction of Prior Period Financial Statements

On May 5, 2014, the Company concluded that the consolidated balance sheet, and related consolidated statement of operations and comprehensive income/(loss), stockholders' equity and statements of cash flows included in Form 10-K Annual Report, dated April 15, 2013 (the "2012 Financials") will need to be restated as a result of the Company erroneous application of the consolidation method of accounting for its former 50.1% equity interest investment in Portables Unlimited, LLC ("Portables"). The Company's management determined during the fourth quarter of the year ended December 31, 2013 that the Company's former investment in Portables was incorrectly accounted for 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 unilateral control 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.

Warrant accounting

The Company has accounted for all of the outstanding Series A, C, F, G, and related placement warrants as liabilities. The Company assessed the value of these warrants by using the binomial lattice model. When the Company valued the warrants it used the following assumptions as part of inputs into the valuation model. US treasury rates as measure of the risk free rate of return. The Company also used the mean of the annualized standard deviation of the log normal returns of comparable companies in the same line of business as measure of volatility. The Company controls whether dilution may occur, so it did not add additional assumptions regarding dilutive events into the future discrete outcomes found in the model. The warrants values were adjusted for the dilutive effect as ratio of the outstanding common stock at the time of measurement. In determining the probabilities of an up movement or down movement in the discrete outcomes, as well as the related magnitude of such up or down movements, the Company used a Cox-Ross-Rubenstein approach in applying the binomial lattice model.

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Accounting Policies (Fair Value of Financial Instruments) (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies Fair Value Of Financial Instruments Tables

Fair Value Measurement (Tables)

The assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of December 31, 2013 and 2012 are as follows:

						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2013		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	36,735	$	36,735	$	-	$	-
Restricted cash	$	19,632,865	$	19,632,865	$	-	$	-
Warrants	$	377	$	-	$	377	$	-
						Significant
				Active Markets		Other		Significant
		Carrying		for Identical		Observable		Unobservable
		Value		Assets		Inputs		Inputs
		2012		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	8,351	$	8,351	$	-	$	-
Restricted cash	$	19,044,294	$	19,044,294	$	-	$	-
Warrants	$	7,340	$	-	$	7,340	$	-

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ORGANIZATION AND NATURE OF BUSINESS OPERATIONS - Note 1

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

ORGANIZATION AND NATURE OF BUSINESS OPERATIONS - Note 1

NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

Acquisition

Zoom Technologies, Inc. (the "Company") was incorporated in the state of Delaware on February 29, 2002. Until September 22, 2009, the Company was engaged in the design, production, marketing, sales, and support of broadband and dial-up modems, Voice over Internet Protocol or "VoIP" products and services, Bluetooth® wireless products, and other communication-related products.

On September 22, 2009, the Company consummated a share exchange transaction and acquired all the outstanding shares of Gold Lion Holding Limited ("Gold Lion"), a company incorporated in the British Virgin Islands ("BVI"), and its subsidiaries Jiangsu Leimone Electronics Co. Ltd ("Jiangsu Leimone"), Tianjin Tong Guang Group Digital Communication Co., Ltd ("TCB Digital") both incorporated in the (People's Republic of China, ("PRC"), and Profit Harvest Corporation Limited ("Profit Harvest") incorporated in Hong Kong. In connection with the share exchange transaction, the Company spun off its then-existing business to its stockholders, by distributing and transferring all assets and liabilities to its then subsidiary, Zoom Telephonics, Inc., and issuing shares of its then operating subsidiary as a dividend to its stockholders. The subsidiaries of Gold Lion were engaged in the manufacture design, sale and manufacture of mobile devices and handsets in China.

On June 1, 2010, Zoom pursuant to a share exchange agreement dated April 29, 2010, acquired 100% of the shares of Silver Tech Enterprises Ltd, incorporated in the BVI and its wholly owned subsidiaries Ever Elite Corporation Limited, incorporated in Hong Kong, and Nollec Wireless Company Ltd., ("Nollec"), incorporated in the PRC. Nollec is engaged in mobile phone and wireless communication device design.

On January 4, 2011, pursuant to a share exchange agreement, the Company via Profit Harvest acquired 100% ownership of Celestial Digital Entertainment, Ltd., ("CDE") a mobile platform video game development company based in Hong Kong.

On October 11, 2011, the Company and Zoom USA Holdings, Inc., a newly formed wholly- owned subsidiary of the Company ("Zoom Sub") entered into a Securities Purchase Agreement ("Securities Purchase Agreement") to purchase from The Cellular Network Communications Group, Inc. ("CNCG") a 50% interest in Portables Unlimited LLC ("Portables"), one of the largest wholesale distributors and direct retailers of T-Mobile products in the United States. Subsequent to the purchase of the 50% stake in ownership from CNCG, the Company increased its stake in Portables to 50.1% by injecting additional capital.

As of July 15, 2013, the Company was in default of the promissory note for $2,000,000 owed to Portables Unlimited, Inc. The promissory note was collateralized by the Company's ownership percentage in Portables. As of the date of this report, the Company was not able to recover its investment. As a result, Zoom ceased to have a an equity interest in Portables and did not retain an investment in it on the date of default, July 15, 2013, accordingly, the Company recognized a loss which includes a complete write off of its investment in Portables. The Company recorded a loss on disposal of approximately $11.5 million related to its write of Portables.

Dispositions

On December 31, 2012, Zoom Technologies, Inc. ("Zoom" or the "Company") entered into a Share Purchase Agreement (the "SPA") with Beijing Zhumu Culture Communication Company, Ltd. ("BZCC"), a PRC company that provides services to the telecommunication industry. Pursuant to the SPA, the Company agreed to sell (the "Subsidiary Sale") to the Purchaser all the equity interests the Company holds in its China based subsidiaries (except for SpreadZoom Technologies Co., Ltd. ("SpreadZoom") as mentioned below), which include 100% of the outstanding equity interest of Ever Elite Corporation Limited, an intermediary holding company incorporated in Hong Kong, and its wholly owned subsidiary, Nollec, 80% of the outstanding equity interest of TCB Digital, 100% of the outstanding equity interest of Profit Harvest Corporation, Ltd. ("Profit Harvest"), and 100% of the outstanding equity interest of Celestial Digital Entertainment, Ltd. ("CDE"). As consideration for the Subsidiary Sale, the Purchaser agreed to pay to the Company RMB 200 million (approximately US$31.7 million) (the "Purchase Price"), subject to adjustment pending an appraisal by an independent third party appraiser. The Company on October 24, 2012 received approximately $12.6 million (RMB 80 million) less bank charges; the Company on November 5, 2012, received $19.1 million (RMB 120 million) less transaction fees and bank charges. As of the date of this report, the Purchaser has remitted the entire amount of RMB 200 million to the Company, of which RMB120 million was initially held in escrow pending the closing of the Subsidiary Sale. Of this amount, a portion of the funds, approximately RMB 80 million, has been released to the Company to use; accordingly, in the normal course of business, the Company deployed those funds to SpreadZoom and Tianjian Leimone as detailed in "Note 11 - Related Party Transactions". The RMB 80 million released from escrow was a negotiated amount between the Company and the Purchaser. On December 30, 2013, BZCC assigned its purchase right to TCB Digital to Tianjin Huatianli Trading Co., Ltd. ("Huatianli"). On December 30, 2013, the Company consented to the assignment between BZCC and Huatianli and agreed to amend the SPA 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 SPA, was agreed upon to be released within 10 business days to a Company-designated bank account. Of that amount, approximately RMB 68 million was available for the Company's immediate use, and approximately RMB52 million, representing the purchase price for TCB Digital, was be monitored by Huatianli until the closing of the TCB Digital sale. As of the date of this report the RMB 120 million is held in wealth management account at trust company. The Company's Chief Executive Officer has unencumbered sole signing and dispositive rights to that account. As of May 16, 2014, the Company has received payment in full from Huatianli for the sale of TCB Digital and the Company has submitted to the PRC government documentation for the recording of the transfer of Jiangsu Leimone's ownership interest in TCB Digital to Huatianli. The Company believes for accounting purposes the sale transaction is complete, and government recording is perfunctory. Since the Company received payment separately from Huantianli for RMB 52 million, the Company is obligated to repay RMB 52 million to BZCC from the RMB 120 million held in the wealth management account.

The Company's ownership interest in SpreadZoom, which owns and operates mobile phone manufacturing facilities in Tianjin, was not part of the Subsidiary Sale.

The closing of the sale of Profit Harvest and CDE occurred on December 31, 2012; the closing of the sale of Ever Elite and Nollec occurred on April 5, 2013

As disclosed above, as of July 15, 2013, the Company has completely written off its investment in Portables Unlimited, LLC.

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Merger and Acquisitions (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Schedule of goodwill

The following table summarizes goodwill as of December 31, 2013 and 2012 resulting from the acquisitions of Jiangsu Leimone, Silver Tech, and CDE:

		December 31,		December 31,
		2013		2012
				(Restated)
Jiangsu Leimone	$	103,057	$	103,057
Silver Tech		8,395,840		8,395,840
CDE		-		1,861,409
Total		8,498,897		10,360,306
Less: Impairment		(8,498,897)		(10,360,306)
Total goodwill	$	-	$	-

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Stock Options (Tables)

12 Months Ended

Dec. 31, 2013

Stock Options Tables

Option plan activity

The following summary represents options activity during the year ended December 31, 2013 under the New Plan.

			Weighted-
	Under		Average		Aggregate
	New		Exercise		Intrinsic
	Plan		Price		Value
Balance, December 31, 2012	181,000	$	16.90	$	-
Granted	65,000		3.66		-
Lapsed
Exercised
Cancelled	(46,875)		16.90		-
Balance, December 31, 2013	199,125	$	12.58	$	-

Option plan summary

The following represents options summary as of December 31, 2013 under the New Plan.

	Options Outstanding				Options Exercisable
		Weighted-		Weighted-			Weighted-
		Average		Average			Average
	Number	Remaining		Exercise	Number		Exercise
	Outstanding	Contractual Life		Price	Exercisable		Price
Options	199,125	3.05 years	$	12.58	144,958	$	15.91

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Property, Plant and Equipment (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Balance Sheet Related Disclosures [Abstract]
Machinery and equipment	$ 1,130,554	$ 1,096,662
Electronic equipment	92,415	89,645
Transportation equipment	51,801	50,248
Leasehold improvements	0	0
Computer equipment	1,173	1,173
Office equipment	20,805	20,181
Property and equipment, gross	1,296,748	1,257,909
Less: Accumulated depreciation	(1,296,748)	(1,257,909)
Property, plant and equipment, net	$ 0	$ 0

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Statutory Reserves (Narrative) (Details) (USD $)

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Statutory Reserves Narrative Details

Statutory Accounting Practices, Statutory to GAAP, Description of Reconciling Item

As stipulated by the Company Law of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i) Making up cumulative prior years' losses, if any;

ii) Allocations to the "Statutory surplus reserve" of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital;

iii) Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's "Statutory common welfare fund", which is established for the purpose of providing employee facilities and other collective benefits to the Company's employees; and Statutory common welfare fund is no longer required per the new cooperation law executed in 2006.

iv) Allocations to the discretionary surplus reserve, if approved in the shareholders' general meeting.

Statutory surplus reserve

$ 727,822

$ 702,539

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 36,735	$ 8,351
Restricted cash	19,632,865	19,044,294
Other receivables and prepaid expenses	614,403	4,398,053
Due from related parties	9,358,033	20,528,155
Current assets of discontinued operations, held for sale	127,409,901	144,751,290
Total current assets	157,051,937	188,730,143
Plant and equipment	0	0
Intangible assets	349,600	349,600
Long-term investments	10,880,977	23,758,974
TOTAL ASSETS	168,282,514	212,838,717
Current liabilities
Short-term loans	3,158,587	2,994,999
Notes payable	350,937	290,000
Accounts payable	0	38,695
Accrued expenses and other payables	866,367	947,504
Purchase deposit from buyer	8,240,490	8,740,490
Taxes payable	21,860	22,334
Due to related parties	3,449,922	5,362,597
Warrant liability	377	7,340
Current liabilities of discontinued operations	139,109,499	138,348,859
Total current liabilities	155,198,039	156,752,818
Long-term loans	1,352,103	0
Long-term notes payable	0	317,500
TOTAL LIABILITIES	156,550,142	157,070,318
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock: authorized 1,000,000 shares, par value $0.01 none issued and outstanding	0	0
Common stock: authorized 60,000,000 shares, par value $0.01, 3,008,737 shares issued and 3,008,569 shares outstanding at December 31, 2013; 2,932,085 shares issued and 2,932,137 shares issued and 2,931,969 shares outstanding at December 31, 2012	30,087	29,319
Treasury shares: 168 shares at cost	(7,322)	(7,322)
Additional paid-in capital	53,699,157	52,083,155
Statutory surplus reserve	727,822	702,539
Accumulated other comprehensive income	817,365	4,058,657
Accumulated deficit	(42,985,768)	(4,098,798)
TOTAL STOCKHOLDERS' EQUITY	12,281,341	52,767,550
Noncontrolling interest	(548,969)	3,000,849
TOTAL EQUITY	11,732,372	55,768,399
TOTAL LIABILITIES AND EQUITY	$ 168,282,514	$ 212,838,717

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Organization and Nature of Business Operations (Narrative) (Details)

12 Months Ended

Dec. 31, 2013

Gold Lion Holding Limited

Entity Incorporation, State Country Name

British Virgin Islands

Entity Incorporation, Date of Incorporation

Sep. 22, 2009

Jiangsu Leimone Electronics Co. Ltd

Entity Incorporation, State Country Name

People's Republic of China

Entity Incorporation, Date of Incorporation

Sep. 22, 2009

Tianjin Tong Guang Group Digital Communication Co., Ltd

Entity Incorporation, State Country Name

People's Republic of China

Entity Incorporation, Date of Incorporation

Sep. 22, 2009

Disposal Date

Sep. 30, 2013

Profit Harvest Corporation Limited

Entity Incorporation, State Country Name

Hong Kong

Entity Incorporation, Date of Incorporation

Sep. 22, 2009

Disposal Date

Dec. 31, 2012

Silver Tech Enterprises Ltd

Entity Incorporation, State Country Name

British Virgin Islands

Entity Incorporation, Date of Incorporation

Jun. 01, 2010

Ever Elite Corporation Limited

Entity Incorporation, State Country Name

Hong Kong

Entity Incorporation, Date of Incorporation

Jun. 01, 2010

Disposal Date

Apr. 05, 2013

Nollec Wireless Company Ltd

Entity Incorporation, State Country Name

People's Republic of China

Entity Incorporation, Date of Incorporation

Jun. 01, 2010

Disposal Date

Apr. 05, 2013

Celestial Digital Entertainment, Ltd.

Entity Incorporation, State Country Name

Hong Kong

Entity Incorporation, Date of Incorporation

Jan. 04, 2011

Disposal Date

Dec. 31, 2012

Zoom USA Holdings, Inc.

Entity Incorporation, State Country Name

Delaware

Entity Incorporation, Date of Incorporation

Oct. 11, 2011

Portables Unlimited LLC

Entity Incorporation, State Country Name

New York

Entity Incorporation, Date of Incorporation

Aug. 20, 2008

Loan Default

As of July 15, 2013, the Company was in default of the promissory note for $2,000,000 owed to Portables Unlimited, Inc. The promissory note was collateralized by the Company's ownership percentage in Portables. As of the date of this report, the Company was not able to recover its investment. As a result, Zoom ceased to have a an equity interest in Portables and did not retain an investment in it on the date of default, July 15, 2013, accordingly, the Company recognized a loss which includes a complete write off of its investment in Portables. The Company recorded a loss on disposal of approximately $11.5 million related to its write of Portables.

Zoom Technologies, Inc.

Entity Incorporation, State Country Name

Delaware

Entity Incorporation, Date of Incorporation

Feb. 28, 2002

Description and Timing of Disposal

On December 31, 2012, Zoom Technologies, Inc. ("Zoom" or the "Company") entered into a Share Purchase Agreement (the "SPA") with Beijing Zhumu Culture Communication Company, Ltd. ("BZCC"), a PRC company that provides services to the telecommunication industry. Pursuant to the SPA, the Company agreed to sell (the "Subsidiary Sale") to the Purchaser all the equity interests the Company holds in its China based subsidiaries (except for SpreadZoom Technologies Co., Ltd. ("SpreadZoom") as mentioned below), which include 100% of the outstanding equity interest of Ever Elite Corporation Limited, an intermediary holding company incorporated in Hong Kong, and its wholly owned subsidiary, Nollec, 80% of the outstanding equity interest of TCB Digital, 100% of the outstanding equity interest of Profit Harvest Corporation, Ltd. ("Profit Harvest"), and 100% of the outstanding equity interest of Celestial Digital Entertainment, Ltd. ("CDE"). As consideration for the Subsidiary Sale, the Purchaser agreed to pay to the Company RMB 200 million (approximately US$31.7 million) (the "Purchase Price"), subject to adjustment pending an appraisal by an independent third party appraiser. The Company on October 24, 2012 received approximately $12.6 million (RMB 80 million) less bank charges; the Company on November 5, 2012, received $19.1 million (RMB 120 million) less transaction fees and bank charges. As of the date of this report, the Purchaser has remitted the entire amount of RMB 200 million to the Company, of which RMB120 million was initially held in escrow pending the closing of the Subsidiary Sale. Of this amount, a portion of the funds, approximately RMB 80 million, has been released to the Company to use; accordingly, in the normal course of business, the Company deployed those funds to SpreadZoom and Tianjian Leimone as detailed in "Note 11 - Related Party Transactions". The RMB 80 million released from escrow was a negotiated amount between the Company and the Purchaser. On December 30, 2013, BZCC assigned its purchase right to TCB Digital to Tianjin Huatianli Trading Co., Ltd. ("Huatianli"). On December 30, 2013, the Company consented to the assignment between BZCC and Huatianli and agreed to amend the SPA 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 SPA, was agreed upon to be released within 10 business days to a Company-designated bank account. Of that amount, approximately RMB 68 million was available for the Company's immediate use, and approximately RMB52 million, representing the purchase price for TCB Digital, was be monitored by Huatianli until the closing of the TCB Digital sale. As of the date of this report the RMB 120 million is held in wealth management account at trust company. The Company's Chief Executive Officer has unencumbered sole signing and dispositive rights to that account. As of May 16, 2014, the Company has received payment in full from Huatianli for the sale of TCB Digital and the Company has submitted to the PRC government documentation for the recording of the transfer of Jiangsu Leimone's ownership interest in TCB Digital to Huatianli. The Company believes for accounting purposes the sale transaction is complete, and government recording is perfunctory. Since the Company received payment separately from Huantianli for RMB 52 million, the Company is obligated to repay RMB 52 million to BZCC from the RMB 120 million held in the wealth management account.

The Company's ownership interest in SpreadZoom, which owns and operates mobile phone manufacturing facilities in Tianjin, was not part of the Subsidiary Sale.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Preferred Stock	Common stock	Treasury stock	Shares to be issued	Additional paid-in capital	Statutory surplus reserve	Accumulated other comprehensive income	Retained earnings (deficit)	Total	Noncontrolling interest
Beginning balance at Dec. 31, 2011	$ 0	$ 23,866	$ (7,322)	$ 100	$ 44,670,670	$ 682,528	$ 2,081,429	$ 28,373,724	$ 75,824,995	$ 3,324,403
Beginning balance, shares at Dec. 31, 2011	0	2,386,624
Issuance of shares for services		4,907		73	6,476,817				6,481,797
Issuance of shares for services, shares		490,720
Shares issued to replace cancelled options		303			143,106				143,409
Shares issued to replace cancelled options, shares		30,280
Shares issued against shares to be issued		173		(173)	1,557				1,557
Shares issued against shares to be issued, shares		17,263
Shares issued to employees		72			648				720
Shares issued to employees, shares		7,250
Stock options expense					790,355				790,355
Foreign currency translation							1,977,228		1,977,228	26,540
Net loss								(32,452,511)	(32,452,511)	(350,094)
Appropriated statutory surplus reserve						20,011		(20,011)
Ending balance at Dec. 31, 2012	0	29,321	(7,322)		52,083,153	702,539	4,058,657	(4,098,798)	52,767,550	3,000,849
Ending balance, shares at Dec. 31, 2012	0	2,932,137
Shares issued to directors and consultants		766			1,480,266				1,481,052
Shares issued to directors and consultants,shares		76,600
Stock options expense					135,718				135,718
Foreign currency translation							(3,241,292)		(3,241,292)	(356,630)
Capital Injection by Tongguang Group										2,679,883
Dividends paid										(1,079,061)
Net loss								(38,861,687)	(38,861,687)	(4,794,010)
Appropriated statutory surplus reserve						25,283		(25,283)
Ending balance at Dec. 31, 2013	$ 0	$ 30,087	$ (7,322)		$ 53,699,157	$ 727,822	$ 817,365	$ (42,985,768)	$ 12,281,341	$ (548,969)
Ending balance, shares at Dec. 31, 2013	0	3,008,737

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Related Party Transactions (Details) (USD $)

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Due from related parties

$ 9,358,033

$ 20,528,155

Due to related parties

2,966,000

5,362,597

BeijingLeimone Shengtong Wireless

Due from related parties

17,997

91,571

Related Party Transaction, Description of Transaction

Beijing Leimone Shengtong Wireless Technology Co., Ltd. ("Beijing Leimone") was founded by Gu, the largest shareholder of the Company. Beijing Leimone borrowed money from the Company. The borrowings bore no interest and had a maturity of 12 months. The balances are neither collateralized nor personally guaranteed by Gu. The balance is expected to be repaid in full.

Related Party Transaction, Rate

0.00%

Leimone (Tianjin) Industrial

Due from related parties

0

11,034,982

Due to related parties

2,283,922

0

Related Party Transaction, Description of Transaction

Leimone (Tianjin) Industrial Co., Ltd. ("Tianjin Leimone") was controlled by Gu, the largest shareholder of the Company. Tianjin Leimone sells raw materials to the Company. As of December 31, 2012, the amount due from Tianjin Leimone of $11,034,982 represented advances for purchases arising in the normal course of business for transactions prior to December 31, 2012. The balance was net off against the capital injection detailed in Due to related parties below.

Leimone (Tianjin) Industrial Co., Ltd. ("Tianjin Leimone") was controlled by Gu, the largest shareholder of the Company. As of December 31, 2013, the amount owed to Tianjin Leimone was $2,283,922. This balance is the result of a transfer from Tianjin Leimone of $10,719,532 (RMB 66,400,000) for Jiangsu Leimone to inject as capital into its discontinued operation TCB Digital. The transfer of funds from Tianjin exceeded the then outstanding balance of $8,435,610 owed by Tianjin Leimone; therefore, the remaining balance is a net due to Tianjin Leimone.

Shenzhen Leimone

Due from related parties

293,998

355,564

Related Party Transaction, Description of Transaction

Shenzhen Leimone Company, Ltd., formed by individuals including our Chairman, Mr. Gu, is set up with the intention of providing manufacturing services to our Company particularly for exports. $293,998 and $355,564 as of December 31, 2013 and 2012 was a loan to Shenzhen Leimone for setup costs. The balance is expected to be repaid in full.

Spreadzoom

Due from related parties

9,046,038

9,046,038

Related Party Transaction, Description of Transaction

The balance due from SpreadZoom represents an advance to SpreadZoom for it to purchase components to manufacture handsets in the normal course of business. The advance bears no interest, and is uncollateralized. Upon completion of the sale of TCB Digital, the Company expects to be repaid these advances.

Gu

Due to related parties

1,063,500

2,901,283

Related Party Transaction, Description of Transaction

Mr. Gu provided funds to the Company with no interest and are due on demand. As of December 31, 2013 and 2012, the balances of funds provided by Gu was $1,063,500 and $2,901,283 respectively.

Anthony Chan

Due to related parties

358,814

0

Related Party Transaction, Description of Transaction

Mr. Anthony Chan provided funds to the Company with no interest and they were due on demand. As of December 31, 2012, the balances of funds provided by Chan and certain accrued compensation for services rendered was $358,814. As of December 31, 2013, the amounts owed to Mr. Chan have been repaid in full.

Beijing Leimone Shengtong Cultural

Due to related parties

0

102,500

Related Party Transaction, Description of Transaction

The balance owed to Beijing Lemone Shengtong Cultural Development Co, Ltd ("Beijing Shentong") arose in the normal course of business, as certain corporate staff expenses in Beijing were paid by Beijing Shentong on behlf of the Company.

Portables Unlimited

Due to related parties

$ 0

$ 2,000,000

Related Party Transaction, Description of Transaction

The balance owed of $2 million was for a promissory note issued to Portables Unlimited, Inc. The Company defaulted on this loan and forfeited its ownership in Portables. See Note 1 in the accompanying financial statements for details.

Related Party Transaction, Rate

12.00%

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property Plant And Equipment Tables

Components of Property, Plant and Equipment

Property, plant and equipment as of December 31, 2013 and 2012 consisted of the following:

	Estimated		December 31,		December 31,
	Useful Lives		2013		2012
					(Restated)
Machinery and equipment	4-6 years	$	1,130,554	$	1,096,662
Electronic equipment	4-6 years		92,415		89,645
Transportation equipment	4-6 years		51,801		50,248
Leasehold improvements	5 years		-		-
Computer equipment	4-6 years		1,173		1,173
Office equipment	4-6 years		20,805		20,181
Total			1,296,748		1,257,909
less:Accumulated depreciation			(1,296,748)		(1,257,909)
Property, plant and equipment, net		$	-	$	-

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Stock Option Grants (Narrative) (Details)

12 Months Ended

Dec. 31, 2013

October 11, 2011

Share-based Compensation Arrangement, Description

On October 11, 2011, the Company's BOD approved of the granting of 150,000 options to employees and executives of Portables Unlimited LLC, the Company's newly acquired subsidiary, with the exercise prices of $18.30 and $37.50 per share, with 25% of the options vesting immediately and the balance equally per quarter over three years. These options expire in four years.

October 8 2012

Share-based Compensation Arrangement, Description

On October 8, 2012, the Company's BOD approved of the re-pricing of 120,000 out of the above-mentioned 150,000 options from the exercise price of $37.50 to $18.30 per share.

October 26, 2011

Share-based Compensation Arrangement, Description

On October 26, 2011, the Company's BOD approved of the granting of 1,000 options to its new independent director, with the exercise price of $20.40 per share, vesting over one year and expiring in two years.

November 29, 2011

Share-based Compensation Arrangement, Description

On November 29, 2011, the Company's BOD approved of the granting of 30,000 options to a consultant, with the exercise price of $10.00 per share, with 1/3 vesting immediately and the balance equally over two quarters. These options expire in two years.

May 22, 2012

Share-based Compensation Arrangement, Description

On May 22, 2012, the Company issued 30,280 shares of its common stock to its employees, and directors in replacement for cancelling 133,900 outstanding options that were held by the same recipients. The shares have the same vesting schedule as the options and were valued at $1.12 per share, the closing price on the date of Board Approval, which is considered the market price at that time. Based on the difference between the market value of the shares and the Black-Scholes value of the cancelled options as of May 22, 2012, there was no extra non-cash compensation expense for the year ended December 31, 2013.

February 14, 2013

Share-based Compensation Arrangement, Description

On February 14, 2013, the Company's BOD approved of the granting of 10,000 options to an employee with an exercise price of $6.50, with monthly vesting beginning in February 2013. The options expire four years from the date of grant. The Company determined the grant date fair value of 10,000 options of $1.70 per share which was calculated using the Black Scholes Options Pricing Model as follows: Stock price of $6.50 per share, exercise price of $6.50 per share, expected life of 4.00 years, volatility of 32.48% and discount rate of 0.64%.

November of 2013

Share-based Compensation Arrangement, Description

In November of 2013, the Company's BOD approved of the granting of 55,000 options to certain employees with an exercise price of $3.14, with monthly vesting beginning in November 2013. The options expire four years from the date of grant. The Company determined the grant date fair value of 55,000 options of $1.14 per share which was calculated using the Black Scholes Options Pricing Model.

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STOCK OPTIONS - Note 15

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

STOCK OPTIONS - Note 15

NOTE 15 - STOCK OPTIONS

The 2009 Equity Incentive Compensation Plan

On October 11, 2011, the Company's BOD approved of the granting of 150,000 options to employees and executives of Portables Unlimited LLC, the Company's newly acquired subsidiary, with the exercise prices of $18.30 and $37.50 per share, with 25% of the options vesting immediately and the balance equally per quarter over three years. These options expire in four years.

On October 8, 2012, the Company's BOD approved of the re-pricing of 120,000 out of the above-mentioned 150,000 options from the exercise price of $37.50 to $18.30 per share.

On October 26, 2011, the Company's BOD approved of the granting of 1,000 options to its new independent director, with the exercise price of $20.40 per share, vesting over one year and expiring in two years.

On November 29, 2011, the Company's BOD approved of the granting of 30,000 options to a consultant, with the exercise price of $10.00 per share, with 1/3 vesting immediately and the balance equally over two quarters. These options expire in two years.

On May 22, 2012, the Company issued 30,280 shares of its common stock to its employees, and directors in replacement for cancelling 133,900 outstanding options that were held by the same recipients. The shares have the same vesting schedule as the options and were valued at $1.12 per share, the closing price on the date of Board Approval, which is considered the market price at that time. Based on the difference between the market value of the shares and the Black-Scholes value of the cancelled options as of May 22, 2012, there was no extra non-cash compensation expense for the year ended December 31, 2013.

The following summary represents options activity during the year ended December 31, 2013 under the New Plan.

			Weighted-
	Under		Average		Aggregate
	New		Exercise		Intrinsic
	Plan		Price		Value
Balance, December 31, 2012	181,000	$	16.90	$	-
Granted	65,000		3.66		-
Lapsed
Exercised
Cancelled	(46,875)		16.90		-
Balance, December 31, 2013	199,125	$	12.58	$	-

The following represents options summary as of December 31, 2013 under the New Plan.

	Options Outstanding				Options Exercisable
		Weighted-		Weighted-			Weighted-
		Average		Average			Average
	Number	Remaining		Exercise	Number		Exercise
	Outstanding	Contractual Life		Price	Exercisable		Price
Options	199,125	3.05 years	$	12.58	144,958	$	15.91

For the re-pricing of the 120,000 options on October 8, 2012, from the exercise price of $37.5 to $18.30 per share, the Company determined the incremental fair value of $0.058 per share which was calculated by taking the difference between the Black Scholes values of the new exercise price and that of the old exercise price. Other data used in the calculations include: the stock market price of $9.00, expected life of 3 years, volatility of 39.22% and discount rate of 0.35%.

On November 29, 2011, the Company's BOD approved of the granting of 30,000 options to a consultant, with the exercise price of $1.00 per share, with 1/3 vesting immediately and the balance equally over two quarters. These options expire in two years.

On February 14, 2013, the Company's BOD approved of the granting of 10,000 options to an employee with an exercise price of $6.50, with monthly vesting beginning in February 2013. The options expire four years from the date of grant. The Company determined the grant date fair value of 10,000 options of $0.17 per share which was calculated using the Black Scholes Options Pricing Model as follows: Stock price of $6.50 per share, exercise price of $6.50 per share, expected life of 4.00 years, volatility of 32.48% and discount rate of 0.64%.

In November of 2013, the Company's BOD approved of the granting of 55,000 options to certain employees with an exercise price of $3.14, with monthly vesting beginning in November 2013. The options expire four years from the date of grant. The Company determined the grant date fair value of 55,000 options of $1.14 per share which was calculated using the Black Scholes Options Pricing Model.

As a result, of the issuances in February and November of 2013 of 10,000 and 55,000 shares respectively, the total options issued during 2013 was 65,000.

The Company recorded $135,718 of non-cash compensation expense related to stock options for the year ended December 31, 2013. As of December 31, 2013, there was $49,781 of non-cash compensation to be recorded up to 2014 based on options valued at grant date.

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Intangible Assets Tables

Carrying values of intangible assets

As of December 31, 2013 and 2012, the Company's intangible assets were summarized as follows:

	Estimated		December 31,		December 31,
	Useful Life		2013		2012
					(Restated)
Domain name, logo and trade mark	Indefinite	$	349,600	$	349,600
less: Accumulated amortization			-		-
Intangible assets, net		$	349,600	$	349,600

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STATUTORY RESERVES - Note 17

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

STATUTORY RESERVES - Note 17

NOTE 17 - STATUTORY RESERVES

As stipulated by the Company Law of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i) Making up cumulative prior years' losses, if any;

ii) Allocations to the "Statutory surplus reserve" of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital;

iii) Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's "Statutory common welfare fund", which is established for the purpose of providing employee facilities and other collective benefits to the Company's employees; and Statutory common welfare fund is no longer required per the new cooperation law executed in 2006.

iv) Allocations to the discretionary surplus reserve, if approved in the shareholders' general meeting.

As of December 31, 2013 and 2012, the Company's statutory surplus reserve was $727,822 and $702,539 respectively.

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Schedule Of Assumptions Used In Black-Scholes Model - Options (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Non-cash compensation expense related to stock options	$ 135,718
Non-cash compensation expense related to stock options to be recorded up to 2014	$ 49,781
October 8 2012 Options
Stock price	$ 9.00
Exercise price	$ 18.30
Expected life	3 years
Volatility	39.22%
Discount rate	0.35%
February 14 2013 Options
Stock price	$ 6.50
Exercise price	$ 6.50
Expected life	4 years
Volatility	32.48%
Discount rate	0.64%

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Statement of Cash Flows [Abstract]
Net loss	$ (43,655,697)	$ (32,802,605)
Adjustments to reconcile net (loss) income attributable to Zoom Technologies Inc. to cash provided by (used in) operating activities:
Loss on impairment of goodwill	0	9,048,334
Depreciation and amortization	214,076	3,266,770
Non-cash equity-based compensation	1,141,167	7,416,937
Provision for inventory obsolescence	(202,745)	382,955
Provision on accounts receivable	24,190,352	1,551,474
Loss on disposal	16,354,593	11,860,025
Loss on equity method investment	926,373	3,840
Fair value adjustment on warrants	(6,963)	(843,501)
Changes in deferred tax assets	(69,206)	56,695
Changes in operating assets and liabilities:
Accounts receivable	(8,359,832)	(46,531,984)
Inventories	(11,855,915)	(5,047,646)
Advances to suppliers	229,517	3,225,579
Prepaid expenses and other assets	11,275,565	7,882,357
Accounts payable	26,294,775	27,676,119
Advance from customers	(130,274)	3,823,356
Related parties-net	2,963,865	(28,613,441)
Accrued expenses and other current liabilities	(720,454)	13,731,379
Net cash provided by (used in) operating activities	18,589,197	(23,913,357)
Cash flows from investing activities:
Restricted cash	(14,010,637)	(57,727,911)
Purchase of property and equipment and other long-term assets	(650,594)	(284,866)
Increase in notes receivable	(103,038)	(2,485,272)
Cash decrease from disposal of subsidiary	(653,292)	(789,529)
Cash paid for equity method investment	0	(12,342,542)
Cash received from the sale of discontinued operations	0	31,740,490
Net cash used in investing activities	(15,417,561)	(41,889,630)
Cash flows from financing activities:
Proceeds from loans	54,244,551	23,646,665
Repayment of loans	(37,050,191)	(28,211,734)
Proceeds from issuance of notes	13,555,402	0
Repayment on notes payable	(574,063)	(1,766,739)
Receipt from related parties	25,732,935	75,050,569
Repayment on borrowings from related parties	(59,519,561)	(325,522)
Net cash (used in) provided by financing activities	(3,610,927)	68,393,239
Effect of exchange rate changes on cash & cash equivalents	71,005	(274,956)
Net (decerease) increase in cash and cash equivalents	(368,286)	2,315,296
Cash and cash equivalents, beginning of period	3,253,880	938,584
Cash and cash equivalents of continuing components	8,351	22,158
Cash and cash equivalents of discontinued components	3,245,529	916,426
Cash and cash equivalents, end of period	2,885,594	3,253,880
Cash and cash equivalents of continuing components	36,735	8,351
Cash and cash equivalents of discontinued components	2,848,859	3,245,529
SUPPLEMENTARY DISCLOSURES:
Interest paid	153,199	120,738
Income tax paid	$ 191,414	$ 190,845

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	3,008,737	2,932,137
Common stock, shares outstanding	3,008,569	2,931,969
Treasury shares, at cost	168	168

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NOTES PAYABLE - Note 10

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

NOTES PAYABLE - Note 10

NOTE 10 - NOTES PAYABLE

As of December 31, 2013 and 2012, the Company's notes payable consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Former Executives of Nollec	$	145,000	$	290,000
The Cellular Network Communications Group, Inc.		205,937		-
Total	$	350,937	$	290,000

There was a note owed to the former executives of Nollec that was an incentive for key managers to remain with the Nollec after Zoom acquired it in 2010. The note neither bears interest nor is collateralized by any assets.

The Note due to CNCG carries an annual interest rate of 8.00% to be made in quarterly installments of $43,708. The Company's subsidiary Zoom Sub is currently in default of the note due to CNCG therefore the interest rate adjusted to 14.00%. The note amortizes and matures in October of 2014. The note is unsecured and is not guaranteed by Zoom Technologies, Inc. The note was previously classified as long term. Refer to "Note 12 - Long-Term Notes Payable" for additional details.

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Document and Entity Information (USD $)

12 Months Ended

Dec. 31, 2013

May 20, 2014

Jun. 30, 2013

Document And Entity Information

Entity Registrant Name

ZOOM TECHNOLOGIES INC

Entity Central Index Key

0000822708

Document Type

10-K

Document Period End Date

Dec. 31, 2013

Amendment Flag

true

Amendment Description

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Annual Report of Zoom Technologies, Inc. (the "Company") on Form 10-K for the period ended December 31, 2013, filed with the Securities and Exchange Commission on May 23, 2014 (the "Form 10-K"), is:

(1) to file Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-K formatted in XBRL (eXtensible Business Reporting Language) and

(2) to file Exhibits 10.8 and 10.9 to the Form 10-K and to correct ITEM 15 - EXHIBITS for typographical numbering errors in the original Form 10-K.

Other than the aforementioned, no other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-K.

Current Fiscal Year End Date

--12-31

Is Entity a Well-known Seasoned Issuer?

No

Is Entity a Voluntary Filer?

No

Is Entity's Reporting Status Current?

Yes

Entity Filer Category

Smaller Reporting Company

Document Fiscal Period Focus

FY

Entity Common Stock, Shares Outstanding

3,008,569

Entity Public Float

$ 11,831,228

Document Fiscal Year Focus

2013

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RELATED PARTY TRANSACTIONS - Note 11

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

RELATED PARTY TRANSACTIONS - Note 11

NOTE 11 - RELATED PARTY TRANSACTIONS

Due from related parties

As of December 31, 2013 and 2012, the amounts due from related parties were:

		December 31,		December 31,
Due from related parties		2013		2012
				(Restated)
Beijing Leimone Shengtong Wireless Technology Co., Ltd.	$	17,997	$	91,571
Leimone (Tianjin) Industrial Co., Ltd.		-		11,034,982
Shenzhen Leimone		293,998		355,564
Spreadzoom		9,046,038		9,046,038
Total due from related parties	$	9,358,033	$	20,528,155

Beijing Leimone Shengtong Wireless Technology Co., Ltd. ("Beijing Leimone") was founded by Gu, the largest shareholder of the Company. Beijing Leimone borrowed money from the Company. The borrowings bore no interest and had a maturity of 12 months. The balances are neither collateralized nor personally guaranteed by Gu. The balance is expected to be repaid in full.

Leimone (Tianjin) Industrial Co., Ltd. ("Tianjin Leimone") was controlled by Gu, the largest shareholder of the Company. Tianjin Leimone sells raw materials to the Company. As of December 31, 2012, the amount due from Tianjin Leimone of $11,034,982 represented advances for purchases arising in the normal course of business for transactions prior to December 31, 2012. The balance was net off against the capital injection detailed in Due to related parties below.

Shenzhen Leimone Company, Ltd., formed by individuals including our Chairman, Mr. Gu, is set up with the intention of providing manufacturing services to our Company particularly for exports. $293,998 and $355,564 as of December 31, 2013 and 2012 was a loan to Shenzhen Leimone for setup costs. The balance is expected to be repaid in full.

The balance due from SpreadZoom represents an advance to SpreadZoom for it to purchase components to manufacture handsets in the normal course of business. The advance bears no interest, and is uncollateralized. Upon completion of the sale of TCB Digital, the Company expects to be repaid these advances.

Due to related parties

As of December 31, 2013 and 2012, the amounts due to related parties were:

		December 31,		December 31,
Due to related parties		2013		2012
				(Restated)
Mr. Lei Gu	$	1,063,500	$	2,901,283
Anthony Chan		-		358,814
Leimone (Tianjin) Industrial Co., Ltd.		2,283,922		-
Beijing Leimone Shengtong Cultural Development Co., Ltd.		102,500		102,500
Portables Unlimited, Inc.		-		2,000,000
Total due to related parties	$	3,449,922	$	5,362,597

Mr. Gu provided funds to the Company with no interest and are due on demand. As of December 31, 2013 and 2012, the balances of funds provided by Gu was $1,063,500 and $2,901,283 respectively.

Mr. Anthony Chan provided funds to the Company with no interest and they were due on demand. As of December 31, 2012, the balances of funds provided by Chan and certain accrued compensation for services rendered was $358,814. As of December 31, 2013, the amounts owed to Mr. Chan have been repaid in full.

Leimone (Tianjin) Industrial Co., Ltd. ("Tianjin Leimone") was controlled by Gu, the largest shareholder of the Company. As of December 31, 2013, the amount owed to Tianjin Leimone was $2,283,922. This balance is the result of a transfer from Tianjin Leimone of $10,719,532 (RMB 66,400,000) for Jiangsu Leimone to inject as capital into its discontinued operation TCB Digital. The transfer of funds from Tianjin exceeded the then outstanding balance of $8,435,610 owed by Tianjin Leimone; therefore, the remaining balance is a net due to Tianjin Leimone.

The balance owed to Beijing Lemone Shengtong Cultural Development Co, Ltd ("Beijing Shentong") arose in the normal course of business, as certain corporate staff expenses in Beijing were paid by Beijing Shentong on behlf of the Company.

The balance owed of $2 million was for a promissory note issued to Portables Unlimited, Inc. The Company defaulted on this loan and forfeited its ownership in Portables. See Note 1 in the accompanying financial statements for details.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Net revenues	$ 0	$ 0
Cost of sales	0	0
Gross profit	0	0
Selling, general, and administrative expenses	2,882,051	10,290,461
Loss from operations	(2,882,051)	(10,290,461)
Interest income	316	0
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 from 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)
Loss from discontinued operations, net of tax	(23,149,034)	(11,178,671)
Loss on disposal, net of 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	$ (1.39)	$ (3.60)
Diluted	$ (1.39)	$ (3.60)
Basic	$ (11.66)	$ (8.36)
Diluted	$ (11.66)	$ (8.36)
Basic	$ (13.05)	$ (11.96)
Diluted	$ (13.05)	$ (11.96)
Basic	2,976,933	2,714,471
Diluted	2,976,933	2,714,471
Loss from continuing operations	(4,152,070)	(9,763,909)
Loss attributable to Zoom Technologies Inc. from discontinued operations	(34,709,617)	(22,688,602)
Net loss attributable to Zoom Technologies Inc.	$ (38,861,687)	$ (32,452,511)

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ACCOUNTS RECEIVABLE - Note 5

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

ACCOUNTS RECEIVABLE - Note 5

NOTE 5 - ACCOUNTS RECEIVABLE

As of December 31, 2013 and 2012, the Company's accounts receivable consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Accounts receivable	$	757,956	$	735,304
less: Allowance for doubtful accounts		(757,956)		(735,304)
Accountants receivable, net	$	-	$	-

The Company has provided 100% allowance for outstanding accounts receivable based on the Company decision to cease operations in those subsidiaries in which those balances arose in the normal course of business. Once operations have ceased it is unlikely those balances will be recovered.

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RESTRICTED CASH - Note 4

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

RESTRICTED CASH - Note 4

NOTE 4 - RESTRICTED CASH

Restricted cash was part of the funds deposited with the Company for sale to BZCC of Profit Harvest, CDE, Ever Elite, Nollec, and TCB Digital. BZCC has assigned its rights to purchase TCB Digital to Huatianli. The funds become unrestricted upon closing of the disposition transaction.

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INCOME TAXES - Note 16

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

INCOME TAXES - Note 16

NOTE 16 - INCOME TAXES

The Company is subject to income taxes by entity on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

Zoom Technologies Inc., the parent company was incorporated in the U.S. and has net operating losses ("NOL") for income tax purposes, which can be carried forward for up to 20 years from the year the loss is incurred. Zoom has NOL carry forwards for income taxes of approximately $4.04 million and $1.38 million at December 31, 2013 and 2012, which may be available to reduce future years' taxable income. Management believes the realization of benefits from these losses remains uncertain due to Zoom's limited operating history and continuing losses. Accordingly, a 100% deferred tax asset valuation allowance has been provided.

The discontinued operations of TCB Digital and Nollec, and the continuing operation of Jiangsu Leimone are governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

Jiangsu Leimone is exempt from income tax in PRC for two years starting from the first profitable year or the year 2008, whichever is earlier, and is subject to a 50% exemption on normal income tax rate for the following three years.  2012, is the last year that Jiangsu Leimone will afforded the 50% exemption from PRC incomes taxes.

SpreadZoom in subject to the Income Tax Law of the PRC concerning the private-run enterprises, which are generally subject to tax at a statutory rate of 25% on profit that is reported in the statutory financial statements after appropriate tax adjustments.

Nollec is exempt from income tax in PRC for two years starting from 2008, and is subject to a 50% exemption on normal income tax rate for three years starting from 2010 and is subject to normal income tax rate from 2013.

Nollec had pre-tax loss up to the date of its disposition April 5, 2013. The Company's net income and earnings per share had no effect due to its income tax exemption.

The discontinued and disposed operations Profit Harvest and CDE are governed by the Income Tax Law of Hong Kong, which is generally subject to tax at a statutory rate of 16.5% on income reported in the statutory financial statements after appropriate tax adjustments.

Portables is governed by the Income Tax Law of United States; however, because Portables is a pass through entity for tax purposes, tax liabilities are the responsibility of its members. Therefore, Zoom Sub, which is responsible to report and make payments on its portion of income generated by Portables is subject to a graduated statutory tax rate of 34%.

U.S. NOL carryforwards are only those arising after September 22, 2009, which was the date when a more-than-50% ownership change occurred.

The following table summarizes the temporary differences which result in deferred tax assets and liabilities as at December 31, 2013 and 2012:

		December 31,		December 31,
		2013		2012
				(Restated)
Deferred tax assets:
Net operating loss	$	1,373,600	$	469,200
less: Valuation allowance		(1,373,600)		(469,200)
Total deferred tax assets		-		-
Deferred tax liabilities:		-		-
Deferred tax assets, net	$	-	$	-

The following table reconciles the U.S. statutory rates to the Company's effective tax rates for the years ended December 31, 2013 and 2012:

	For Years Ended
	December 31,
	2013	2012
		(Restated)
US statutory rates	34.00%	34.00%
Tax rate difference	-2.72%	-1.33%
Valuation allowance	-31.28%	-32.67%
State taxes	-4.83%	-1.99%
Tax per financial statements	-4.83%	-1.99%

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LONG-TERM NOTES PAYABLE - Note 12

12 Months Ended

Dec. 31, 2013

Long-Term Notes Payable - Note 12

LONG-TERM NOTES PAYABLE - Note 12

NOTE 12 - LONG-TERM NOTES PAYABLE

The note was issued by Zoom Sub to CNCG as part of its acquisition of Portables, with an original face amount of $500,000, term from October 11, 2011 to October 11, 2014, and annual interest rate of 2.0%. On October 5, 2012, the Company repaid $182,500 of the outstanding principle and the interest rate was adjusted to 14.0%. The Company made further payments of principal on the note during 2013. The note is in default and has been classified as short term. The outstanding balance in notes payable is $205,937.

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INTANGIBLE ASSETS - Note 8

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

INTANGIBLE ASSETS - Note 8

NOTE 8 - INTANGIBLE ASSETS

As of December 31, 2013 and 2012, the Company's intangible assets were summarized as follows:

	Estimated		December 31,		December 31,
	Useful Life		2013		2012
					(Restated)
Domain name, logo and trade mark	Indefinite	$	349,600	$	349,600
less: Accumulated amortization			-		-
Intangible assets, net		$	349,600	$	349,600

Intangible assets are stated at cost less accumulated amortization. The Company acquired domain name "zoom.com" and related logo and trade name for 80,000 shares of common stock valued $349,600 as of the date of purchase. The domain name, logo and trademark have indefinite lives and no amortization was recorded for the years ended December 31, 2013 and 2012.

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Long-Term Notes Payable (Details) (USD $)

12 Months Ended

Dec. 31, 2013

Long-Term Notes Payable Details

Long-Term Notes Payable

$ 205,937

Long-term Debt, Description

The note was issued by Zoom Sub to CNCG as part of its acquisition of Portables, with an original face amount of $500,000, term from October 11, 2011 to October 11, 2014, and annual interest rate of 2.0%. On October 5, 2012, the Company repaid $182,500 of the outstanding principle and the interest rate was adjusted to 14.0%. The Company made further payments of principal on the note during 2013. The note is in default and has been classified as short term. The outstanding balance in notes payable is $205,937.

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OTHER RECEIVABLES AND PREPAID EXPENSES - Note 6

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

OTHER RECEIVABLES AND PREPAID EXPENSES - Note 5

NOTE 6 - OTHER RECEIVABLES AND PREPAID EXPENSES

As of December 31, 2013 and 2012, the Company's other receivables and prepaid expenses consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Deposit	$	-	$	90,091
Others		614,403		4,307,962
Total other receivables and prepaid expenses	$	614,403	$	4,398,053

The balances of $614,403 and $4,307,962 as "Others" as of December 31, 2013 and 2012 were comprised of receivables owed to the Company by Profit Harvest that arose in the normal course of business where the Company paid for expenses and professional fees on behalf of Profit Harvest. Profit Harvest was previously a subsidiary of the Company. In 2012, it was sold to Beijing Zhumu Culture Communication Company, Ltd. These amounts are expected to be recovered by the Company. The Company has continued to collected outstanding balances from Profit Harvest subsequent to December 31, 2013; accordingly, the Company has determined the amounts are fully recoverable and no allowance has been provided.

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PROPERTY, PLANT AND EQUIPMENT - Note 7

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

PROPERTY, PLANT AND EQUIPMENT - Note 7

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 2013 and 2012 consisted of the following:

	Estimated		December 31,		December 31,
	Useful Lives		2013		2012
					(Restated)
Machinery and equipment	4-6 years	$	1,130,554	$	1,096,662
Electronic equipment	4-6 years		92,415		89,645
Transportation equipment	4-6 years		51,801		50,248
Leasehold improvements	5 years		-		-
Computer equipment	4-6 years		1,173		1,173
Office equipment	4-6 years		20,805		20,181
Total			1,296,748		1,257,909
less:Accumulated depreciation			(1,296,748)		(1,257,909)
Property, plant and equipment, net		$	-	$	-

Depreciation expense for the years ended December 31, 2013 and 2012 was$0 and $813,471, respectively.

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SHORT TERM LOANS - Note 9

12 Months Ended

Dec. 31, 2013

Short Term Loans - Note 9

SHORT TERMS LOANS - Note 9

NOTE 9 - SHORT TERMS LOANS

At December 31, 2012, the short term loan balance of $2,994,999 reflected the amount drawn against a line of credit for up to $3.0 million issued jointly to the Company and Portables by M&T Bank. The line was collateralized by real property, a certificate of deposit, and guarantees of Portables Unlimited, Inc. (the 49.9% owner of Portables). The interest rate was 1 month LIBOR plus 3.00%. The maturity date of the line of credit is March 26, 2015. In February of 2013, the line of credit was refinanced to a maximum borrowing amount of $2.5 million. At December 31, 2013 the Company accrued an amount due on the credit for $2.5 million. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the line of credit. The Company will recognize a gain in the second quarter of 2014 for $2.5 million reflecting the release.

In February of 2013 the Company and Portables jointly entered into a term loan with M&T Bank for $2,500,000 million that matures in February of 2017. The balance of the note fully amortizes via monthly principal and interest payments up through the maturity of the note. The note carries an interest of 1 month LIBOR plus 3.50%. At December 31, 2013, Portables had repaid $489,310 in principal; the outstanding balance of the note was $2,010,690. The Company accounted for the outstanding balance of $2,010,690 with $658,587 as short term, and the remainder of $1,352,103 as long term. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the term note. The Company will recognize a gain in the second quarter of 2014 for $2,010,690 million reflecting the release.

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Summary of Warrants Outstanding and Exercisable (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Summary Of Warrants Outstanding And Exercisable Details
Balance, December 31, 2012	863,860
Warrants outstanding, Weighted-average remaining life, in years	1 year 33 days
Warrants outstanding, Weighted-average exercise price	$ 23.00
Balance, December 31, 2013	863,860
Warrants exercisable, at December 31, 2013	863,860
Warrants exercisable, Weighted-average exercise price	$ 23.00

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Stock Option Activity (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Stock Option Activity Details
Balance, December 31, 2012	181,000
Granted	65,000
Lapsed	0
Exercised	0
Cancelled	0
Balance, December 31, 2013	199,125
Weighted-average exercise price of options outstanding, December 31, 2012	$ 16.90
Weighted-average exercise price of options granted during period	$ 3.66
Weighted-average exercise price of options outstanding, December 31, 2013	$ 12.58
Aggregate Intrinsic Value, December 31, 2012	$ 0
Aggregate Intrinsic Value, December 31, 2013	$ 0

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Warrants Activity (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Warrants Activity Details
Balance, December 31, 2012	863,860
Granted	0
Lapsed	0
Exercised	0
Cancelled	0
Balance, December 31, 2013	863,860
Weighted-average exercise price, beginning balance	$ 23.00
Weighted-average exercise price, granted	$ 0
Weighted-average exercise price, lapsed	$ 0
Weighted-average exercise price, exercised	$ 0
Weighted-average exercise price, cancelled	$ 0
Weighted-average exercise price, ending balance	$ 23.00
Aggregate intrinsic value, beginnig balance	$ 0
Aggregate intrinsic value, ending balance	$ 0

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Other Receivables and Prepaid Expenses (Tables)

12 Months Ended

Dec. 31, 2013

Other Receivables And Prepaid Expenses Tables

Other receivables and prepaid expenses

As of December 31, 2013 and 2012, the Company's other receivables and prepaid expenses consisted of the following:

		December 31,		December 31,
		2013		2012
				(Restated)
Deposit	$	-	$	90,091
Others		614,403		4,307,962
Total other receivables and prepaid expenses	$	614,403	$	4,398,053

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Other Receivables and Prepaid Expenses (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Other Receivables And Prepaid Expenses Details
Deposit	$ 0	$ 90,091
Others	614,403	4,307,962
Total other receivables	$ 614,403	$ 4,398,053

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WARRANTS - Note 14

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

WARRANTS - Note 14

NOTE 14 - WARRANTS

The Company granted Series A, B, C, D and E warrants to the accredited investors as part of its private placement offering on October 16, 2009 and November 18, 2009.

Following is the brief description of warrants:

Series A Warrants: The Series A warrants have an exercise price of $60.00 and a term of 5 years from the issue date subject to the Exchange Cap (as defined in the agreement).

Series B Warrants: The Series B warrants have an exercise price of $0.10 and a term of three (3) months from the issue date provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement) until the warrant can be exercised in full by the holder thereof without breaching the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement). All B Warrants were exercised in December 2009.

Series C Warrants: The Series C warrants shall be exercisable only upon the exercise of the Series B warrants. The Series C warrants shall have an exercise price of $60.00 and a term of 5 years from the issue date.

Series D Warrants: The Series D warrants shall be exercisable if the Company fails to meet certain performance criteria for the year 2009. The Series D warrant shall have an exercise price of $0.10 and a term of exercise equal to three (3) months from the date the Maximum Eligibility Date (as defined in the agreement); provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap (as defined in the agreement) until the warrant can be exercised in full by the holder without breaching the Beneficial Ownership Limitation (as defined in the agreement) or the Exchange Cap Limitation (as defined in the agreement). Due to the Net Income of Zoom as reported in the Company's annual report for the year 2009 exceeding the eligibility threshold pursuant to the agreement, the Series D Warrants became ineligible for exercise.

Series E Warrants: The Series E warrants shall be exercisable if the Company fails to meet certain performance criteria for the year 2010. The Series E warrants shall have an exercise price of $0.10 and a term of three (3) months from the date the Maximum Eligibility Date (as defined in the agreement); provided, however, that such date shall be extended indefinitely if the warrant cannot be exercised due to the Beneficial Ownership Limitation (as defined in the agreement) until the Warrant can be exercised in full by the holder thereof without breaching the Beneficial Ownership Limitation (as defined in the agreement). Due to the Net Income of Zoom as reported in the Company's annual report for the year 2010 exceeding the eligibility threshold pursuant to the agreement, the Series E Warrants became ineligible for exercise.

The Company granted on May 6, 2010, Series F warrants to the above investors for their temporary forfeiture of their right to participate in the Company's future financings.

Series F Warrants: The Series F warrants have an exercise price of $60.00 and a term of 5 years from the issue date. The Company issued 37,500 Series F warrants to investors who participated in private placement transaction pursuant to the Securities Purchase Agreement dated October 15, 2009, to temporarily waive their right for a period of eight months to participate in a future offering of the Company. The investors originally have a period of twenty-four months ("Rights Period") in which they have the right to participate, and for providing a temporary waiver, an eight-month duration is added to the original expiration of the Rights Period.

The Company granted Series G warrants to the accredited investors as part of its private place offering on November 15, 2010.

Series G Warrants: The Series G warrants shall have an exercise price of $47.10 and a term of 5 years from the issue date.

Anti-dilution Adjustments for Certain Warrants: Since the private placement in November 2010 involved sales of the Company's stock at a price that activated anti-dilution provisions in the Series A, C, F and certain placement agent warrants, the exercise price of these warrants is adjusted to $37.40 per share and the number of warrants eligible is multiplied by a factor of 60 / 37.40 or 1.60 with fractional shares rounding up.

The following summary represents warrants activity during the year ended December 31, 2013:

			Weighted-
			Average		Aggregate
	Number of		Exercise		Intrinsic
	Warrants		Price		Value
Balance, December 31, 2012	863,860	$	23.00	$	-
Granted
Lapsed
Exercised
Cancelled
Balance, December 31, 2013	863,860	$	23.00	$	-

The following presents warrants summary as of December 31, 2013:

	Warrants Outstanding				Warrants Exercisable
		Weighted-		Weighted-			Weighted-
		Average		Average			Average
	Number	Remaining		Exercise	Number		Exercise
	Outstanding	Contractual Life		Price	Exercisable		Price
Warrants	863,860	1.09 years	$	23.00	863,860	$	23.00

The Company has accounted for all of the outstanding Series A, C, F, G, and related placement warrants as liabilities. The Company assessed the value of these warrants by using the binomial lattice model. When the Company valued the warrants it used the following assumptions as part of inputs into the valuation model. US treasury rates as measure of the risk free rate of return. The Company also used the mean of the annualized standard deviation of the log normal returns of comparable companies in the same line of business as measure of volatility. The Company controls whether dilution may occur, so it did not add additional assumptions regarding dilutive events into the future discrete outcomes found in the model. The warrants values were adjusted for the dilutive effect as ratio of the outstanding common stock at the time of measurement. In determining the probabilities of an up movement or down movement in the discrete outcomes, as well as the related magnitude of such up or down movements, the Company used a Cox-Ross-Rubenstein approach in applying the binomial lattice model.

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EQUITY METHOD INVESTMENTS - Note 19

12 Months Ended

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

EQUITY METHOD INVESTMENTS - Note 19

NOTE 19 - EQUITY METHOD INVESTMENTS

On May 10, 2012, the Company along with Spreadtrum Communications (Tianjin) Co., Ltd, Tianjin Baoshui District Investment Co, Ltd, and Han & Qin International (BVI) Limited invested in the joint venture SpreadZoom Technologies, Inc ("SpreadZoom"). SpreadZoom is domiciled in Tianjin, China with a registered capital of $47,352,700 (RMB 300,000,000). As of June 30, 2012, $17,520,500 (RMB 111,000,000) in capital had been contributed to SpreadZoom; the Company contributed $12,342,542 (RMB 78,000,000). The Company had committed to invest an additional $10,117,700 (RMB 64,100,000) in SpreadZoom. Management and control of the business have not been fully determined. The Company has used the equity method to account for its investment in SpreadZoom and has recorded a loss from investment of $ 1,031,979 and $ 429,586 for the years ended December 31, 2013 and 2012, respectively.

Changes in Equity Method Investments
		Portables		SpreadZoom		Total
Balance December 31, 2011 (Restated)	$	9,160,273	$	-	$	9,160,273
Initial investment				12,342,542		12,342,542
Equity method investment income (loss)		425,746		(429,586)		(3,840)
Increase in investment through co-borrowing on bank line of credit		3,000,000				3,000,000
Reduction in equity interest from 55.0% to 50.1%		(735,000)				(735,000)
Reduction from repayment of bank line of credit		(5,001)				(5,001)
Balance December 31, 2012 (Restated)	$	11,846,018	$	11,912,956	$	23,758,974
Balance December 31, 2012 (Restated)		11,846,018		11,912,956		23,758,974
Equity method investment loss		105,606		(1,031,979)		(926,373)
Increase in investment through co-borrowing on bank term note		2,500,000				2,500,000
Reduction in investment through repayment of line of credit		(500,000)				(500,000)
Reduction from repayment on bank term note		(489,310)				(489,310)
Gain from default of promisssry note leading for fofeiture of ownership		(2,000,000)				(2,000,000)
Loss on disposal		(11,462,314)				(11,462,314)
Balance December 31, 2013	$	-	$	10,880,977	$	10,880,977

		December 31,		December 31,
		2013		2012
Financial Position of SpreadZoom				(Restated)
Current assets	$	17,811,982	$	42,772,581
Non-current assets		6,558,367		1,775,661
Total assets		24,370,349		44,548,242
Current liabilities		9,353,001		27,839,474
Non-current liabilities		-		-
Total liabilities		9,353,001		27,839,474
Net asset value	$	15,017,348	$	16,708,768
		For Years Ended
Results of Operations of SpreadZoom		December 31,
		2013		2012
				(Restated)
Net revenues	$	66,920,617	$	46,025,192
Cost of goods sold		65,000,788		45,859,806
Gross profit		1,919,829		165,386
Operating expenses		4,152,403		1,327,593
Operating loss		(2,232,574)		(1,162,207)
Other income (expenses), net		54,025		255,721
Income (loss) before taxes		(2,178,549)		(906,486)
less: Provision for income taxes		-		-
Net loss	$	(2,178,549)	$	(906,486)
Investment loss attributable to Zoom Technologies, Inc.	$	(1,031,979)	$	(429,586)

The Company accounted for its investment in Portables Unlimited, LLC using the equity method. The following are operating results of Portables for the year ended December 31, 2012 and from January 1, 2013 to July 15, 2013, the date of disposition.

		July 15,		December 31,
		2013		2012
Financial Position of Portables				(Restated)
Current assets	$	6,283,761	$	7,145,668
Non-current assets		2,515,896		2,542,977
Total assets		8,799,657		9,688,645
Current liabilities		14,570,582		16,994,165
Non-current liabilities		1,708,928		-
Total liabilities		16,279,510		16,994,165
Net asset value	$	(7,479,853)	$	(7,305,520)
		For the Period Ended		For Year Ended
Results of Operations of Portables		July 15,		December 31,
		2013		2012
				(Restated)
Net revenues	$	14,130,111	$	49,773,552
Cost of goods sold		10,341,986		40,813,304
Gross profit		3,788,125		8,960,248
Operating expenses		3,309,640		7,215,081
Operating income		478,485		1,745,167
Other income (expenses), net		(267,695)		(895,374)
Income (loss) before taxes		210,790		849,793
less: Provision for income taxes		-		-
Net loss	$	210,790	$	849,793
Investment loss attributable to Zoom Technologies, Inc.	$	105,606	$	425,746

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Merger and Acquisitions - Goodwill (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Goodwill, Gross	$ 8,498,897	$ 10,360,306
Less: Impairment	(8,498,897)	(10,360,306)
Total goodwill	0	0
Jiangsu Leimone
Goodwill, Gross	103,057	103,057
Silver Tech
Goodwill, Gross	8,395,840	8,395,840
CDE
Goodwill, Gross	$ 0	$ 1,861,409

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Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Tables

Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities

The following table summarizes the temporary differences which result in deferred tax assets and liabilities as at December 31, 2013 and 2012:

		December 31,		December 31,
		2013		2012
				(Restated)
Deferred tax assets:
Net operating loss	$	1,373,600	$	469,200
less: Valuation allowance		(1,373,600)		(469,200)
Total deferred tax assets		-		-
Deferred tax liabilities:		-		-
Deferred tax assets, net	$	-	$	-

Schedule of Effective Income Tax Rate and Amount Reconciliation

The following table reconciles the U.S. statutory rates to the Company's effective tax rates for the years ended December 31, 2013 and 2012:

	For Years Ended
	December 31,
	2013	2012
		(Restated)
US statutory rates	34.00%	34.00%
Tax rate difference	-2.72%	-1.33%
Valuation allowance	-31.28%	-32.67%
State taxes	-4.83%	-1.99%
Tax per financial statements	-4.83%	-1.99%

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net loss attributable to Zoom Technologies Inc.	$ (38,861,687)	$ (32,452,511)
Net loss attributable to noncontrolling interest	(4,794,010)	(350,094)
Other comprehensive income:
Foreign currency translation (loss) gain - Zoom Technologies Inc.	(3,241,292)	1,977,228
Foreign currency translation (loss) gain - noncontrolling interest	(356,630)	26,540
Comprehensive loss Zoom Technologies Inc.	(42,102,979)	(30,475,283)
Comprehensive loss noncontrolling interest	$ (5,150,640)	$ (323,554)

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MERGER AND ACQUISITIONS - Note 3

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

MERGER AND ACQUISITIONS - Note 3

NOTE 3 - MERGER AND ACQUISITIONS

The Company acquired 100% equity in Silver Tech on May 31, 2010. As of May 31, 2010, the net assets of Silver Tech were $2,564,160. The purchase consideration was $10,960,000 which resulted in goodwill of $8,395,840. As of December 31, 2012, the Company has taken action to dispose of Silver Tech's operating subsidiaries Ever Elite and Nollec; accordingly, all goodwill related to Silver Tech has been written off.

The Company acquired 100% ownership of CDE on January 4, 2011. As of January 4, 2011, the net liabilities of CDE were $43,409. The purchase consideration was $1,818,000 which resulted in goodwill of $1,861,409. As of December 31, 2012, as part of the Company's disposal of Profit Harvest the Company has indirectly disposed of CDE, accordingly, all of the goodwill related to CDE has been written off.

The following table summarizes goodwill as of December 31, 2013 and 2012 resulting from the acquisitions of Jiangsu Leimone, Silver Tech, and CDE:

		December 31,		December 31,
		2013		2012
				(Restated)
Jiangsu Leimone	$	103,057	$	103,057
Silver Tech		8,395,840		8,395,840
CDE		-		1,861,409
Total		8,498,897		10,360,306
Less: Impairment		(8,498,897)		(10,360,306)
Total goodwill	$	-	$	-

The Company reviews the carrying value of the goodwill for impairment regularly.

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Notes Payable (Details) (USD $)

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Notes payable

$ 350,937

$ 290,000

Former Executives of Nollec

Notes payable

145,000

290,000

Terms of Note Payable

There was a note owed to the former executives of Nollec that was an incentive for key managers to remain with the Nollec after Zoom acquired it in 2010. The note neither bears interest nor is collateralized by any assets.

CNCG

Notes payable

$ 205,937

$ 0

Terms of Note Payable

The Note due to CNCG carries an annual interest rate of 8.00% to be made in quarterly installments of $43,708. The Company's subsidiary Zoom Sub is currently in default of the note due to CNCG therefore the interest rate adjusted to 14.00%. The note amortizes and matures in October of 2014. The note is unsecured and is not guaranteed by Zoom Technologies, Inc. The note was previously classified as long term. Refer to "Note 12 - Long-Term Notes Payable" for additional details.

Interest Rate

14.00%

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Income Tax (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Pre-tax profit (loss)	$ (3,960,656)	$ (9,573,064)
Zoom Technologies
Statutory tax rate	34.00%
Net operating loss carry forward period, years	20
Net operating loss ("NOL") carry forwards	4,040,000	1,380,000
Deferred tax asset valuation allowance provided	$ 4,040,000	$ 1,380,000
TCB Digital
Statutory tax rate	25.00%
Jiangsu Leimone
Statutory tax rate	25.00%
Nollec Wireless
Statutory tax rate	25.00%
Profit Harvest
Statutory tax rate	16.50%
CDE
Statutory tax rate	16.50%
Portables
Statutory tax rate	34.00%

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DISCONTINUED OPERATIONS - Note 20

12 Months Ended

Dec. 31, 2013

Other income (expenses)

DISCONTINUED OPERATIONS - Note 20

NOTE 20 - DISCONTINUED OPERATIONS

On December 31, 2012, the Company announced its plan to dispose of certain business operations to Beijing Zhumu Culture Communication Company, Ltd. covered in the Share Purchase Agreement as described in "Note 1 - Organization and Nature of Business Operations" was for approximately $31.7 million (RMB 200 million) in sales proceeds. The Share Purchase Agreement covers the sale of several business operations in different jurisdictions, with differing regulatory requirements regarding the purchase and sale of businesses. For accounting purposes the Company has accounted for those operations as discontinued operations up to the point of the individual closing of the relevant entities under relevant local jurisdictions as detailed in the tables below.

The sale of Profit Harvest and CDE closed on December 31, 2012. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec closed on April 5, 2013. The sale of TCB Digital closed on May 16, 2014.

Results of Operations		Years Ended December 31,
		2013		2012
				(Restated)
Net revenues	$	249,744,183	$	329,099,574
Cost of sales		234,624,885		313,699,749
Gross profit		15,119,298		15,399,825
Operating expenses		35,270,830		24,463,419
Operating income		(20,151,532)		(9,063,594)
Other income (expenses), net		(2,855,322)		(1,936,953)
(Loss) income before taxes from discontinued operations		(23,006,854)		(11,000,547)
less: Provision for income taxes		142,180		178,124
Loss from discontinued operations, net of tax	$	(23,149,034)	$	(11,178,671)
Basic and diluted (loss) income per common share from
discontinued operations:
Basic	$	(11.66)	$	(8.36)
Diluted	$	(11.66)	$	(8.36)

Financial Position		December 31,		December 31,
		2013		2012
				(Restated)
Cash and equivalents	$	2,848,859	$	3,245,529
Restricted cash		80,658,355		64,467,142
Notes receivable		669,583		548,218
Accounts receivable, net		20,225,872		35,642,961
Inventories, net		18,809,671		7,059,829
Other receivables and prepaid expenses		2,061,687		10,580,693
Advance to suppliers		224,913		3,004,016
Due from related parties		204,509		18,322,784
Construction in progress deposit		-		243,747
Property, plant and equipment, net		1,636,316		1,293,689
Intangible assets		-		342,682
Deferred tax assets, noncurrent		70,136		-
Total current assets		127,409,901		144,751,290
Total Assets of Discontinued Operations	$	127,409,901	$	144,751,290
Short-term loans	$	38,529,498	$	21,187,680
Notes payable		42,441,911		28,156,022
Accounts payable		42,843,584		16,255,076
Accrued expenses and other payables		19,643		1,013,986
Advances from customers		97,110		1,039,775
Taxes payable		(4,106,935)		(2,341,883)
Interest payable		-		110,835
Dividends payable		-		628,890
Due to related parties		19,284,688		72,298,478
Total current liabilities		139,109,499		138,348,859
Total Liabilities of Discontinued Operations		139,109,499		138,348,859
Net Assets of Discontinued Operations	$	(11,699,598)	$	6,402,431

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Equity Method Investments (Narrative) (Details)

12 Months Ended

Dec. 31, 2013

Equity Method Investments Narrative Details

Equity Method Investment, Description of Principal Activities

On May 10, 2012, the Company along with Spreadtrum Communications (Tianjin) Co., Ltd, Tianjin Baoshui District Investment Co, Ltd, and Han & Qin International (BVI) Limited invested in the joint venture SpreadZoom Technologies, Inc ("SpreadZoom"). SpreadZoom is domiciled in Tianjin, China with a registered capital of $47,352,700 (RMB 300,000,000). As of September 30, 2012, $17,520,500 (RMB 111,000,000) in capital had been contributed to SpreadZoom; the Company contributed $12,342,358 (RMB 78,000,000). As of September 30, 2012, the Company has used the equity method to account for its investment in SpreadZoom.

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2013

Related Party Transactions Tables

Due From Related Parties

As of December 31, 2013 and 2012, the amounts due from related parties were:

		December 31,		December 31,
Due from related parties		2013		2012
				(Restated)
Beijing Leimone Shengtong Wireless Technology Co., Ltd.	$	17,997	$	91,571
Leimone (Tianjin) Industrial Co., Ltd.		-		11,034,982
Shenzhen Leimone		293,998		355,564
Spreadzoom		9,046,038		9,046,038
Total due from related parties	$	9,358,033	$	20,528,155

Due To Related Parties

As of December 31, 2013 and 2012, the amounts due to related parties were:

		December 31,		December 31,
Due to related parties		2013		2012
				(Restated)
Mr. Lei Gu	$	1,063,500	$	2,901,283
Anthony Chan		-		358,814
Leimone (Tianjin) Industrial Co., Ltd.		2,283,922		-
Beijing Leimone Shengtong Cultural Development Co., Ltd.		102,500		102,500
Portables Unlimited, Inc.		-		2,000,000
Total due to related parties	$	3,449,922	$	5,362,597

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STOCKHOLDERS' EQUITY - Note 13

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

STOCKHOLDERS' EQUITY - Note 13

NOTE 13 - STOCKHOLDERS' EQUITY

COMMON STOCK

On November 12, 2012, the Company issued 10,000 shares of its common stock to consultants for the service period from November 1, 2012 to October 31, 2013. These shares were valued at $0.80 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $13,333 for the year ended December 31, 2012, and the balance of deferred expenses related to such shares at December 31, 2012 was $66,667 for these issuances.

On October 8, 2012, the Company issued 1,000 and 3,000 shares of its common stock to legal counsel for services rendered and a consultant for the service period from October 1, 2012 to September 30, 2013, respectively. These shares were valued at $0.90 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $9,000 and $6,750 for the year ended December 31, 2012, and the balance of deferred expenses related to such shares at December 31, 2012 was $0 and $20,250 for these issuances, respectively.

On September 6, 2012 and July 2, 2012, the Company issued 7,250 shares and 13,763 shares, respectively, of its common stock to the employees of its Nollec subsidiary in lieu of cash salaries. The 7,250 shares were valued at $0.98 per share, the closing price on the date of Board Approval, and were issued for services from September 2012 onwards for 3 years. The 13,763 shares were valued at $1.03 per share, the closing price on the date of Board Approval, and were issued for services within the second quarter of 2012. The Company recorded non-cash compensation expense of $7,894 for the year ended December 31, 2012, for these issuances.

On June 25, 2012, the Company issued 3,500 shares of its common stock to a consultant for services from June 2012 onwards for 1 year. These shares were valued at $1.07 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $21,846 for the year ended December 31, 2012 for this issuance, and the balance of deferred expenses related to such shares at December 31, 2012 was $15,604.

On May 22, 2012, the Company issued 30,280 shares of its common stock to its employees, consultants and directors in replacement for cancelling 133,900 outstanding options that were held by the same recipients. The shares have the same vesting schedule as the options and were valued at $1.12 per share, the closing price on the date of Board Approval. Based on the difference between the market value of the shares and the Black-Scholes value of the cancelled options as of May 22, 2012, there is an incremental non-cash compensation expense of $308,553 to be recorded over the service period.

On May 22, 2012, the Company issued 449,720 shares of its common stock to consultants for their services over the next four years beginning with the second quarter of 2012. The shares were valued at $1.12 per share, the closing price on the date of Board Approval. The projects these consultants are pursuing include but are not limited to marketing our ODM business to large Southeast Asian customers, sales of our own brand and ODM products to private companies and government supported programs in China aimed at various demographic sectors of the domestic mobile market, and other cooperative ventures with the three mobile operators of the PRC. The Company recorded $944,412 of non-cash compensation expense for this issuance for the quarter ended December 31, 2012; and the outstanding deferred expenses related to such shares at December 31, 2012 was $4,092,452.

On February 28, 2012, the Company issued to members of the Board of Directors a total of 17,000 shares of its common stock at a then fair value of $1.34. The Company recorded $227,800 of non-cash compensation expense for this issuance for the quarter ended December 31, 2012. The outstanding deferred expense related to such shares at December 31, 2012 was $0.

On January 25, 2013 the Company issued 18,600 shares of its common stock to its Board of Directors for the service period from January 1, 2013 to December 31, 2013. These shares were valued at $6.50 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $120,900 for the year ended December 31, 2013.

On January 25, 2013 the Company issued 2,000 shares of its common stock to consultants for the service period from January 1, 2013 to December 31, 2013. These shares were valued at $6.50 per share which was the closing price on the date of Board approval. The Company recorded non-cash compensation expense of $ 13,000 for the year ended December 31, 2013.

On July 16, 2013, the Company issued 56,000 shares as compensation to Mr. Anthony Chan for back pay. The Company recorded $475,603 of compensation expense.

On November 12, 2013, the Company effectuated a 10 for 1 reverse split of its common stock. All share numbers and per share amounts have been retroactively restated to reflect the reverse split.

For the year ended December 31, 2013, the Company accelerated the write off of certain deferred stock based compensation totaling $395,250.