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Item 1.01 Entry into a Material Definitive Agreement.
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. (the
"Purchaser"), 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 Beijing Nollec Wireless Company ("Nollec"), 80% of the outstanding equity interest of
Tianjin Tongguang Group Digital Communication Company, Ltd. ("TCBD"), 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$32 million) (the "Purchase Price"), subject to adjustment pending an appraisal by an independent third
party appraiser. As of the date of this current report, the Purchaser has deposited the full amount of RMB 200 million into an escrow
account, to be released to the Company upon the final closing of the Subsidiary Sale, which will be held 30 days after the Company
receives all the requisites corporate and regulatory approvals with respect to the Subsidiary Sale.
The Company's ownership interest in SpreadZoom, which owns and operates mobile phone manufacturing
facilities in Tianjin, is not part of the Subsidiary Sale. In addition, the Company will, through Portables Unlimited, LLC, its U.S. based
subsidiary, continue to operate the exclusive wholesale distributor business for T-Mobile products and services in the United States.
The Company may make contracts with the Purchaser for future businesses.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 31, 2012, pursuant to the SPA as described in Item 1.01 above, the Company consummated its
sale of 100% of the outstanding equity interest of Profit Harvest. The final closing of the Subsidiary Sale is anticipated to take place
within the first quarter of 2013.
The Company intends to use the cash proceeds from the Subsidiary Sale to conduct acquisitions of similar
businesses in the U.S. to further expand its activities there, including but not limited to the acquisition of additional licensed retail stores
that service T-Mobile USA.
Item 8.01 Other Events.
On January 7, 2013, the Company issued a press release announcing that the Company signed an agreement
to sell its China based operations and intends to use the cash received from the Subsidiary Sale for it business expansion in the
U.S. A copy of the press release is attached hereto as Exhibit 99.1, which is hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
Press release, dated January 7, 2013.
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.
Date: January 7, 2013
By: /s/ Anthony K. Chan
Anthony K. Chan
Chief Financial Officer