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) March 16, 2005
Zoom Technologies, Inc.
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(Exact Name Of Registrant As Specified In Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-18672 51-0448969
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(Commission File Number) (I.R.S. Employer Identification No.)
207 South Street, Boston, MA 02111
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(Address of Principal Executive Offices) (Zip Code)
(617) 423-1072
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(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))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.1
EXHIBIT 99.1
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 16, 2005, Zoom Telephonics, Inc. (the "Company"), a wholly owned
subsidiary of Zoom Technologies, Inc. (the "Registrant"), entered into a Loan
and Security Agreement with Silicon Valley Bank that provides for a revolving
line of credit of up to $2 million. The revolving line of credit can be used to
(i) borrow revolving loans for working capital and general corporate purposes,
(ii) issue letters of credit, (iii) enter into foreign exchange forward
contracts, and (iv) support certain cash management services. Revolving loans
will bear interest at a floating rate of interest equal to Silicon Valley Bank's
prime rate plus 1%. This interest rate will be reduced to Silicon Valley Bank's
prime rate plus .5% if the Company records two consecutive quarters of combined
profitability.
On March 15, 2006, Silicon Valley Bank's commitment to extend revolving
loans under the Loan and Security Agreement terminates and all outstanding
obligations of the Company become due.
The revolving loans under the Loan and Security Agreement are secured by a
first priority lien on substantially all of the assets of the Company, excluding
intellectual property and real estate. Registrant guaranteed the obligations of
the Company under the revolving line of credit and pledged all of the stock of
the Company in support of its guarantee. The Loan and Security Agreement
requires that the Company maintain a minimum adjusted quick ratio and a minimum
net worth. In addition, the Company is required to obtain Silicon Valley Bank's
prior written consent to among other things, dispose of assets, make
acquisitions, be acquired, incur indebtedness, grant liens, make investments,
pay dividends, or repurchase stock. This consent may not be unreasonably
withheld.
The Loan and Security Agreement contains events of default that include
among other things, non-payment of principal, interest or fees, violation of
covenants, inaccuracy of representations and warranties, cross default to
certain other indebtedness, bankruptcy and insolvency events, change of control
and material judgments. Upon occurrence of an event of default, Silicon Valley
Bank is entitled to, among other things, accelerate all obligations of the
Company and sell the Company's assets to satisfy the Company's obligations under
the Loan and Security Agreement.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information required by Item 2.03 of this Current Report on Form 8-K is
set forth in Item 1.01 "Entry into a Material Definitive Agreement" above, the
contents of which are incorporate by reference herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit Number Description
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10.1 Loan and Security Agreement, dated 16 March, 2005, entered
into between the Company and Silicon Valley Bank.
99.1 Press release dated March 22, 2005.
SIGNATURES
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: March 22, 2005 ZOOM TECHNOLOGIES, INC.
By: /s/ Robert A. Crist
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Robert A. Crist, Chief
Financial Officer
EXHIBIT INDEX
Exhibit Number Description
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10.1 Loan and Security Agreement, dated 16 March, 2005, entered
into between the Company and Silicon Valley Bank.
99.1 Press release dated March 22, 2005.