8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 28, 2006

Zoom Technologies, Inc.

(Exact Name Of Registrant As Specified In Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

0-18672	51-0448969
(Commission File Number)	(I.R.S. Employer Identification No.)
207 South Street, Boston, MA	02111
(Address of Principal Executive Offices)	(Zip Code)

(617) 423-1072

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition

On July 28, 2006, the Company issued a press release announcing its financial results for the second quarter ended June 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

Limitation on Incorporation by Reference.    The information furnished in this Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements.     Except for historical information contained in the press release attached as an exhibit hereto, the press release contains forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits

Exhibit Number	Exhibit Description
99.1	Press release dated July 28, 2006 of Zoom Technologies, Inc. announcing its financial results for the second quarter ended June 30, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 28, 2006	ZOOM TECHNOLOGIES, INC.
By:	/s/ Robert A. Crist
	Robert A. Crist, Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
99.1	Press release dated July 28, 2006 of Zoom Technologies, Inc. announcing its financial results for the second quarter ended June 30, 2006.

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EX-99.1

EXHIBIT 99.1

Zoom Technologies Reports Results for the Second Quarter of 2006

Boston, MA, July 28, 2006 -Zoom Technologies, Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other communication products, today reported net sales of $4.5 million for its second quarter ended June 30, 2006, down 31% from $6.5 million for the second quarter of 2005. Zoom reported a net loss of $1.9 million or $.20 per share for the second quarter of 2006, compared to net income of $1.4 million or $.15 per diluted share for the second quarter of 2005.

Zoom’s operating loss for the second quarter of 2006 was $1.9 million, a small improvement over the operating loss of $2.1 million for the second quarter of 2005. The net income of $1.4 million for the second quarter of 2005 was comprised of the operating loss of $2.1 million and other income of $3.5 million, Zoom’s gain from its share of the previously reported sale of InterMute.

Zoom’s gross profit was $0.2 million or 5.1% of net sales in the second quarter of 2006, down from $1.4 million or 21.2% of net sales in the second quarter of 2005. The lower gross profit resulted primarily from lower sales and lower gross margin, with the gross margin drop due to obsolescence charges, the negative effect of manufacturing overhead spread over lower sales, and a $.1 million severance charge for Zoom’s previously announced planned closing of its Boston production facility.

Operating expenses were $2.1 million or 47.2% of net sales in the second quarter of 2006, down $1.4 million from $3.5 million or 53.7% of net sales in the second quarter of 2005. The decrease was primarily due to a bad debt and lost inventory charge to General and Administrative expenses of $1.1 million in the second quarter of 2005 for the business failure of a large U.K. customer, and to decreases in expenses for Selling and for Research and Development.

Zoom’s cash balance on June 30, 2006 was $4.5 million, down from $5.6 million on March 31, 2006, as cash reduction from the $1.9 million loss for the quarter and a $.3 million reduction in current liabilities were partially offset by a $.5 million reduction in inventory and a $.4 million reduction in receivables.

“It’s clear that we need to cut our expenses and increase our sales,” said Frank Manning, Zoom’s President and CEO. “The previously announced move of our production facility should dramatically lower our fixed costs, but that alone isn’t enough. We continue to try to cut other expenses, but the focus is on growing sales through new product introductions and product improvements. Our new iHiFi^tm line of products lets you play an iPod^®, MP3 player, or other audio device through your stereo wirelessly. There is strong interest in this product line, and we expect to begin volume shipments in August. We are also starting to see higher demand for our VoIP products, and we are close to introducing significant VoIP feature enhancements. Our DSL product line has been doing well in some markets, including the US; but sales this year in Europe and Turkey have been disappointing, and we are working to try to correct this problem.”

Zoom has scheduled a conference call for Friday, July 28th at 10:00 a.m. Eastern Time. You may access the conference call by dialing (888) 208-1815 for calls made within the United States and by dialing (719) 457-2656 for calls made from outside the United States. The call will also be simulcast to stock analysts and other interested parties on Zoom’s website (www.zoom.com/Q2) and other financial and investor-oriented websites via the CCBN/StreetEvents network. Shortly after the conference call, a recording of the call will be available on Zoom’s website. For additional information, please contact Investor Relations, Zoom Technologies, 207 South Street, Boston, MA 02111, telephone (617) 423-1072, email investor@zoom.com, or visit Zoom’s website at www.zoom.com.

About Zoom Technologies

Zoom Technologies, Inc. designs, produces, markets, and supports communications products under the Zoom, Hayes^®, and Global Village^® brands. Zoom is headquartered in Boston, and its European sales and support center is in the UK. Zoom markets its products in over forty countries, and provides multi-lingual support from its offices in Boston, Florida, and the UK. For more information about Zoom and its products, please see www.zoom.com.

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Forward Looking Statements

This release contains forward-looking information relating to Zoom’s plans, expectations, and intentions, including statements relating to: Zoom’s planned move of its production facilities to Mexico, including the expected cost savings from that move; the interest in and demand for Zoom’s iHiFi, DSL, VoIP, wireless and other products; product developments and the timing of those developments; and Zoom’s prospects. Actual results may be materially different from expectations as a result of known and unknown risks. Risks associated with the planned move of Zoom’s production facilities to Mexico include the difficulty of successfully implementing the planned move, including the risk of unanticipated costs or delays in implementing the move and in shipment of products, and the risk of unanticipated costs associated with the planned operations in Mexico; the risk that definitive documentation to effect the move will not be agreed to on satisfactory terms, if at all; the impact of the move on Zoom’s employees and customers, the challenge of managing operations in another country and at a great distance from Zoom’s headquarters, and currency risks. Risks associated with other of the forward looking statements set forth in this release include: the uncertainty of market acceptance and growth of iHiFi, DSL, and VoIP markets; the uncertainty of Zoom’s ability to grow its sales or more successfully penetrate those markets; Zoom’s reliance on a relatively limited number of customers for sale of its DSL modems; Zoom’s reliance on international sales; the uncertainty of the regulatory environment of VoIP products; uncertainty of new product development and introduction, including budget overruns, project delays, and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; Zoom’s dependence on one or a limited number of suppliers for certain key components; rapid technological change; competition; and other risks set forth in Zoom’s filings with theSecurities and Exchange Commission. Zoom cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Zoom’s expectations or any change in events, conditions or circumstance on which any such statement is based.

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ZOOM TECHNOLOGIES, INC.

Consolidated Balance Sheets

In thousands

(Unaudited)

	Jun 30,			Dec 31,
	2006			2005
Assets
Current assets:
Cash	$	4,527		$	9,081
Accounts receivable, net		2,253			2,631
Inventories		4,157			5,073
Prepaid expenses and other		125			301
Total current assets		11,062			17,086
Property and equipment, net		2,525			2,601
Other Non Current Assets		213			0
Total assets	$	13,800		$	19,687
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,495		$	3,141
Accrued expenses		834			788
Current portion of long-term debt		139			4,890
Total current liabilities		2,468			8,819
Long-term debt		3,507			-
Total liabilities		5,975			8,819
Stockholders’ equity:
Common stock and additional paid-in capital		31,233			31,109
Treasury stock		(7	)		(7	)
Accumulated other comprehensive income (loss)		459			393
Retained earnings (deficit)		(23,860	)		(20,627	)
Total stockholders’ equity		7,825			10,868
Total liabilities & stockholders’ equity	$	13,800		$	19,687

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ZOOM TECHNOLOGIES, INC.

Consolidated Statements of Operations

In thousands, except for per share data

(Unaudited)

	Three Months Ended						Six Months Ended
	6/30/06			6/30/05			6/30/06			6/30/05
Net sales	$	4,518		$	6,524		$	9,799		$	12,961
Cost of goods sold		4,295			5,143			8,611			10,047
Gross profit		223			1,381			1,188			2,914
Operating expenses:
Selling		878			1,075			1,782			2,195
General and administrative		698			1,731			1,546			2,553
Research and development		557			695			1,189			1,445
Total operating expenses		2,133			3,501			4,518			6,193
Operating profit (loss)		(1,910	)		(2,119	)		(3,329	)		(3,279	)
Other income (expense), net		53			3,541			97			3,396
Income (loss) before income taxes		(1857	)		1,421			(3,232	)		117
Income tax expense (benefit)		—			—			—			—
Net income (loss)	$	(1,857	)	$	1,421		$	(3,232	)	$	117
Basic earnings (loss) per share:
Earnings (loss) per share	$	(0.20	)	$	0.16		$	(0.35	)	$	0.01
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(0.20	)	$	0.15		$	(0.35	)	$	0.01
Weighted average number of shares outstanding:
Basic		9,347			9,164			9,347			9,066
Diluted		9,347			9,397			9,347			9,426

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