UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K/A
             (Mark One)
[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 2002
                                       or
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
                        For the transition period from to
                         Commission File Number 0-18672

                             ZOOM TECHNOLOGIES, INC.
                             -----------------------
             (Exact Name of Registrant as Specified in Its Charter)


                      Delaware                                  51-0448969
                      --------                                  ----------
           (State or Other Jurisdiction of                (I.R.S. Employer
             Incorporation or Organization)               Identification No.)

          207 South Street, Boston, Massachusetts               02111
          (Address of Principal Executive Offices)            (Zip Code)

       Registrant's Telephone Number, Including Area Code: (617) 423-1072
        Securities Registered Pursuant to Section 12 (b) of the Act: None
          Securities Registered Pursuant to Section 12 (g) of the Act:

                          Common Stock, $.01 Par Value
                                (Title of Class)

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate  by check mark  whether the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). YES [ ] NO [X]

The  aggregate  market  value of the  common  stock,  $0.01  par  value,  of the
registrant  held  by  non-affiliates  of the  registrant  as of  June  28,  2002
(computed by reference to the closing  price of such stock on The Nasdaq  Market
on such date) was approximately $6,288,693.

The number of shares  outstanding of the  registrant's  common stock,  $0.01 par
value, as of March 20, 2003 was 7,858,266 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's  proxy statement for the  registrant's  2003 annual
meeting of shareholders to be filed with the SEC in April 2003 are  incorporated
by reference into Part III, Items 10-13 of this Form 10-K, as amended.
<PAGE>
                               INTRODUCTORY NOTE

This  Amendment No. 1 to Annual Report on Form 10-K is primarily  being filed to
amend and  restate  footnote  2(k) and  footnote 11 of the  Company's  financial
statements contained in Item 8 of Part II of the Company's Annual Report on Form
10-K for the year ended  December 31, 2002, as filed by the Company on March 28,
2003, to correct the results of  inadvertent  errors made in the  calculation of
the pro forma effect on net income (loss) and earnings (loss) per share applying
the  fair  value   recognition   provisions  of  FASB  No.  123  to  stock-based
compensation  included  therein and the per share weighted average fair value of
stock  options  granted.  No  other  changes  have  been  made to the  financial
statements  or notes  relating  thereto.  The Company is also filing  additional
exhibits.

The effect of the  restatement  of footnote  2(k) and footnote 11 on  previously
reported  consolidated  financial  statements  as of and  for  the  years  ended
December 31, 2002, 2001 and 2000 is as follows:

As originally reported:
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                         2000              2001            2002
                                                      ----------       ------------     -----------
<S>                                                  <C>              <C>              <C>
Net income (loss), as reported....................   $(3,077,248)     $(18,328,922)    $(5,135,586)

Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects........      (837,541)         (683,521)       (225,230)
                                                       ---------        ----------       ---------
Pro forma net income (loss).......................   $(3,914,789)     $(19,012,443)    $(5,360,816)
                                                       =========        ==========       =========
Earnings (loss) per share:
Basic -- as reported..............................   $     (0.40)      $     (2.33)    $     (0.65)
Basic - pro forma.................................   $     (0.50)      $     (2.42)    $     (0.68)
                                                        =========         =========       =========
Diluted -- as reported............................   $     (0.40)      $     (2.33)    $     (0.65)
Diluted - pro forma...............................   $     (0.50)      $     (2.42)    $     (0.68)
                                                        =========         =========       =========
</TABLE>
Weighted-average  assumptions:  2000 - expected  dividend yield 0.0%,  risk-free
interest rate of 5.90%,  volatility 110% and an expected life of 3.0 years; 2001
- expected  dividend yield 0.0%,  risk-free  interest rate of 4.63%,  volatility
101% and an expected life of 1.7 years;  2002 - expected  dividend  yield 0.00%,
risk-free  interest rate of 3.53%,  volatility  140% and an expected life of 1.4
years.

On December 31, 2002 there were 845,446 additional shares available for issuance
under all three stock option plans. The per share weighted-average fair value of
stock options  granted during 2000,  2001, and 2002 was $6.84,  $2.70 and $0.93,
respectively, on the date of grant using the Black Scholes option-pricing model.

As restated:
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                         2000              2001            2002
                                                      ----------       ------------     -----------
<S>                                                  <C>              <C>              <C>
Net income (loss), as reported....................   $(3,077,248)     $(18,328,922)    $(5,135,586)

Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects........    (1,616,219)       (1,834,280)     (1,109,003)
                                                       ---------        ----------       ---------
Pro forma net income (loss).......................   $(4,693,467)     $(20,163,202)    $(6,244,589)
                                                       =========        ==========       =========
Earnings (loss) per share:
Basic -- as reported..............................   $     (0.40)      $     (2.33)    $     (0.65)
Basic - pro forma.................................   $     (0.61)      $     (2.57)    $     (0.79)
                                                        =========         =========       =========
Diluted -- as reported............................   $     (0.40)      $     (2.33)    $     (0.65)
Diluted - pro forma...............................   $     (0.61)      $     (2.57)    $     (0.79)
                                                        =========         =========       =========
</TABLE>
Weighted-average  assumptions:  2000 - expected  dividend yield 0.0%,  risk-free
interest rate of 6.26%, volatility 90% and an expected life of 2.0 years; 2001 -
expected dividend yield 0.0%, risk-free interest rate of 3.83%,  volatility 102%
and an  expected  life of 2.0  years;  2002 -  expected  dividend  yield  0.00%,
risk-free  interest rate of 2.65%,  volatility  106% and an expected life of 2.5
years.

On December 31, 2002 there were 845,446 additional shares available for issuance
under all three stock option plans. The per share weighted-average fair value of
stock options  granted during 2000,  2001, and 2002 was $3.48,  $1.47 and $0.54,
respectively, on the date of grant using the Black Scholes option-pricing model.
<PAGE>
PART II

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ZOOM TECHNOLOGIES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULE
                                                                            Page
Independent Auditors' Report                                                 5
Consolidated Balance Sheets as of December 31, 2001 and 2002                 6
Consolidated Statements of Operations for the years ending December 31,      7
2000, 2001 and 2002
Consolidated Statements of  Stockholders' Equity and Comprehensive Loss
for the years ending December 31, 2000, 2001 and 2002                        8
Consolidated Statements of Cash Flows for the years ending December 31,      9
2000, 2001 and 2002
Notes to Consolidated Financial Statements                                 10-25
Schedule II:  Valuation and Qualifying Accounts for the years ending
December 31, 2000, 2001 and 2002                                             32

<PAGE>

                          Independent Auditors' Report


The Board of Directors and Stockholders
Zoom Technologies, Inc.:


We  have  audited  the   accompanying   consolidated   balance  sheets  of  Zoom
Technologies,  Inc. and  subsidiary  as of December  31, 2001 and 2002,  and the
related  consolidated   statements  of  operations,   stockholders'  equity  and
comprehensive loss and cash flows for each of the years in the three-year period
ended  December  31,  2002.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Zoom Technologies,
Inc. and  subsidiary as of December 31, 2001 and 2002,  and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  December 31, 2002 in  conformity  with  accounting  principles  generally
accepted in the United States of America.




                                                /s/ KPMG LLP



Boston, Massachusetts
February 11, 2003, except as to notes 3
and 7(c) which are as of March 28, 2003.

<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<S>                                                      <C>                 <C>

                                                                     December 31,
                                                         ----------------------------------
    Assets                                                     2001                 2002
    ------                                                     ----                 ----
Current assets:
   Cash and cash equivalents                             $   5,252,058        $   7,612,274
   Accounts receivable, net of reserves for doubtful
      accounts, returns, and allowances $2,816,449 in
      2001 and $2,646,408 in 2002 (note 13)                  5,652,035            3,714,202
   Inventories, net (note 5)                                11,083,143            6,782,550
   Prepaid expenses and other current assets                   999,662            1,037,733
                                                            ----------           ----------
             Total current assets                           22,986,898           19,146,759

Property, plant and equipment, net (note 6)                  4,128,916            3,485,911
Net deferred tax assets (note 12)                            2,012,844                    -
Other assets                                                    56,666                    -
                                                            ----------           ----------
              Total assets                               $  29,185,324        $  22,632,670
                                                            ==========           ==========

    Liabilities and Stockholders' Equity
    ------------------------------------

Current liabilities:
    Accounts payable                                     $   2,750,174        $   2,406,843
    Accrued expenses                                         1,879,566            1,207,724
    Current portion of long term debt (note 10)                139,201              191,550
                                                            ----------           ----------
             Total current liabilities                       4,768,941            3,806,117

Long-term debt, less current portion (note 10)               5,745,368            5,342,057
Other non-current liabilities (note 8)                         255,287                    -
                                                            ----------           ----------
              Total liabilities                             10,769,596            9,148,174
                                                            ----------           ----------

Stockholders' equity (note 11):
  Common stock, no par value at December 31, 2001
    and $0.01 par value at December 31, 2002.
    Authorized 25,000,000 shares; issued
    7,860,866 shares and outstanding 7,860,866 and
    7,858,266 shares at December 31, 2001 and
    December 31, 2002, respectively.                        28,245,215              282,452
  Additional paid-in capital                                         -           27,962,763
  Retained earnings (accumulated deficit)                   (9,634,692)         (14,770,278)
  Accumulated other comprehensive income (loss)               (194,795)              11,755
  Treasury stock, at cost                                            -               (2,196)
                                                            ----------           ----------
             Total stockholders' equity                     18,415,728           13,484,496
                                                            ----------           ----------

             Total liabilities and stockholders'
               equity                                   $   29,185,324        $  22,632,670
                                                            ==========           ==========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                               ZOOM  TECHNOLOGIES, INC. AND SUBSIDIARY
                                CONSOLIDATED STATEMENTS OF OPERATIONS
                            Years Ending December 31, 2000, 2001 and 2002
<TABLE>
<S>                                                     <C>               <C>             <C>

                                                            2000            2001            2002
                                                        ------------    ------------    ------------

Net sales (notes 4, 13 and 17) ..............           $ 57,708,456    $ 41,570,276    $ 37,274,287
Cost of goods sold (note 5) .................             39,404,320      35,193,449      27,937,544
                                                         -----------     -----------     -----------
                     Gross profit ...........             18,304,136       6,376,827       9,336,743
                                                         -----------     -----------     -----------

Operating expenses:
        Selling .............................             10,672,025       7,480,297       5,848,137
        General and administrative (note 8)..              6,228,317       7,938,175       3,405,043
        Research and development ............              6,249,092       5,327,968       3,526,350
                                                         -----------     -----------     -----------
                     Total operating expenses             23,149,434      20,746,440      12,779,530
                                                         -----------     -----------     -----------

                     Operating loss .........             (4,845,298)    (14,369,613)     (3,442,787)
                                                         -----------     -----------     -----------
Other income (expense):
        Interest income .....................                447,148         198,805         102,604
        Interest expense.....................                      -        (454,708)       (293,104)
        Equity in losses of affiliate (note 14)             (215,834)       (145,165)        (56,666)
        Other, net ..........................                237,820         241,759         313,619
                                                         -----------     -----------     -----------
                     Total other income (expense), net       469,134        (159,309)         66,453
                                                         -----------     -----------     -----------
                     Income (loss) before income taxes
                       and extraordinary item             (4,376,164)    (14,528,922)     (3,376,334)

Income tax expense (benefit)(note 12) .......             (1,298,916)      3,800,000       2,014,539
                                                         -----------     -----------     -----------
                     Income (loss) before extraordinary
                       item                               (3,077,248)    (18,328,922)     (5,390,873)
                     Extraordinary gain on elimination
                        of negative goodwill                       -               -         255,287
                                                         -----------     -----------     -----------
                     Net Income (loss) ......           $ (3,077,248)   $(18,328,922)   $ (5,135,586)
                                                         ===========     ===========     ===========
Basic and diluted earnings (loss) per share (note 2):

Loss before extraordinary item:
                     Basic and diluted.......           $       (.40)   $      (2.33)   $       (.68)
                                                         ===========     ===========     ===========

Extraordinary gain on elimination of negative goodwill  $          -    $          -    $        .03
                                                         ===========     ===========     ===========
Net loss:
                     Basic and diluted.......           $       (.40)   $      (2.33)   $       (.65)
                                                         ===========     ===========     ===========

Weighted average common and common equivalent
shares:
                     Basic and diluted.......              7,756,815       7,860,866       7,860,650
                                                         ===========     ===========     ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<S>                               <C>        <C>           <C>         <C>            <C>            <C>       <C>     <C>

                                                       ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
                                                                COMPREHENSIVE LOSS

                                                                         Retained      Accumulated
                                                           Additional    Earnings         Other                          Total
                                       Common Stock         Paid In    (accumulated   Comprehensive   Treasury Stock   Stockholders'
                                     Shares      Amount     Capital       deficit)     Income(Loss)  Shares    Amount     Equity
                                   ---------   ----------  ----------    ----------    -----------   ------    ------  ------------

Balance at December 31, 1999 ....  7,560,296   25,780,231           -    11,771,478        (37,626)       -         -    37,514,083

Net profit (loss) ...............          -            -           -    (3,077,248)             -        -         -    (3,077,248)
Foreign currency translation
adjustment ......................          -            -           -             -        (80,788)       -         -       (80,788)
Unrealized holding gain on
investments .....................          -            -           -             -         26,255        -         -        26,255
 Comprehensive loss ............           -            -           -             -              -        -         -    (3,131,781)
Exercise of stock options (note
11) .............................    300,570    1,822,722           -             -              -        -         -     1,822,722
Compensation expense related to
issuance of restricted stock ...           -       52,577           -             -              -        -         -        52,577
Tax effect of exercises of non-
qualified stock options (notes
11 and 12) ....................            -      489,845           -             -              -        -         -       489,845
                                  ---------- ------------  ----------   -----------      ----------   ------    ------  ------------
Balance at December 31, 2000 ..    7,860,866  $28,145,375           -   $ 8,694,230      $  (92,159)       -         -  $36,747,446

Net profit (loss) .............            -            -           -   (18,328,922)              -        -         -  (18,328,922)
Foreign currency translation
adjustment ....................            -            -           -             -        (102,689)       -         -     (102,689)
Unrealized holding gain on
investments ...................            -            -           -             -              53        -         -           53
 Comprehensive loss . .........            -            -           -             -               -        -         -  (18,431,558)
Compensation expense related to
issuance of restricted stock ..            -       99,840           -             -               -        -         -       99,840
                                  ---------- ------------  ----------   -----------      ----------   ------    ------  ------------
Balance at December 31, 2001 ..    7,860,866  $28,245,215           -   $(9,634,692)     $ (194,795)       -         -  $18,415,728

Net profit (loss) .............            -            -           -    (5,135,586)              -        -         -   (5,135,586)
Foreign currency translation
adjustment ....................            -            -           -             -         206,550        -         -      206,550
 Comprehensive loss ...........            -            -           -             -               -        -         -   (4,929,036)
Incorporation to Delaware
 corporation ..................            -  (27,962,763) 27,962,763             -               -        -         -            -
Purchase of treasury stock ....            -            -           -             -               -    2,600    (2,196)      (2,196)
                                  ----------  -----------  ----------  ------------      ----------   -------   ------- ------------
Balance at December 31, 2002 ..    7,860,866  $   282,452  27,962,763  $(14,770,278)     $   11,755    2,600    (2,196) $ 13,484,496
                                  ==========  ===========  ==========  ============      ==========   ======    ======= ============

</TABLE>
See accompanying notes to consolidated financial statements.

<PAGE>
                                ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Years Ending December 31, 2000, 2001 and 2002
<TABLE>
<S>                                                       <C>               <C>             <C>
                                                               2000             2001             2002
                                                               ----             ----             ----
Cash flows from operating activities:
       Net income (loss)                                  $ (3,077,248)    $(18,328,922)    $ (5,135,586)

       Adjustments to reconcile net income (loss) to net
         cash provided by (used in) operating activities:
             Extraordinary gain on negative goodwill                 -                -         (255,287)
             Depreciation and amortization                   1,613,276        1,769,608          837,968
             Impairment of goodwill                                  -        2,294,881                -
             Amortization of unearned compensation
               expense                                          52,577           99,840                -
             Equity in losses of affiliate                     215,834          145,165           56,666
             Net deferred income taxes                      (1,843,874)       3,800,000        2,012,844
             Tax benefit from exercise of
             nonqualified stock options                        489,845                -                -
             Changes in operating assets and liabilities,
                 net of acquisitions
               Accounts receivable                          (2,514,401)       2,271,932        2,139,336
               Inventories                                  (7,593,276)      10,813,740        4,300,593
               Prepaid expenses and other
                 current assets                               (106,651)        (296,655)         (38,071)
               Accounts payable and accrued
                 expenses                                    4,766,116       (5,214,009)      (1,015,173)
                                                            ----------       ----------       ----------
                     Net cash provided by (used in)
                       operating activities                 (7,997,802)      (2,644,420)       2,903,290
                                                            ----------       ----------       ----------
Cash flows from investing activities:
       Sales of investment securities, net                   3,215,329               53                -
       Investment in affiliates                                      -         (141,665)               -
       Purchases of property, plant and equipment           (1,324,268)        (650,060)        (194,963)
                                                            ----------       ----------       ----------
                     Net cash provided by (used in)
                       investing activities                  1,891,061         (791,672)        (194,963)
                                                            ----------       ----------       ----------
Cash flows from financing activities:
       Proceeds from the issuance of long-term debt                  -        6,000,000                -
       Repayment of long-term debt                                   -         (115,431)        (350,962)
       Exercise of nonqualified stock options                1,875,299                -                -
       Payments to acquire treasury stock                            -                -           (2,196)
                                                            ----------       ----------       ----------
                           Net cash provided by (used in)
                             financing activities            1,875,299        5,884,569         (353,158)
                                                            ----------       ----------       ----------
Effect of exchange rate changes on cash                        (80,788)        (102,689)           5,047
                                                            ----------       ----------       ----------
Net increase (decrease) in cash and cash equivalents        (4,312,230)       2,345,788        2,360,216
                                                            ----------       ----------       ----------
Cash and cash equivalents at beginning of year               7,218,500        2,906,270        5,252,058
                                                            ----------       ----------       ----------
Cash and cash equivalents at end of year                   $ 2,906,270      $ 5,252,058      $ 7,612,274
                                                            ==========       ==========       ==========
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                  Years Ending December 31, 2000, 2001 and 2002

(1)   Incorporation and Nature of Operations
     Zoom Telephonics,  Inc. (the "Company") was incorporated  under the federal
          laws of Canada  (Canada  Business  Corporations  Act).  Its  principal
          business activity, the design,  production, and marketing of faxmodems
          and  other  communication   peripherals,   is  conducted  through  its
          wholly-owned  subsidiary,  Zoom  Telephonics,   Inc.  ("Zoom  US"),  a
          Delaware corporation based in Boston, Massachusetts.

     In   February 2002, the Company completed a transaction in which it changed
          its jurisdiction of incorporation from Canada to the State of Delaware
          effective   March  1,  2002.   In   connection   with  the  change  in
          jurisdiction, the Company changed its name to Zoom Technologies,  Inc.
          These changes were accomplished through a process called a continuance
          under the laws of  Canada  and a  domestication  under the laws of the
          State of Delaware,  and were approved by the Company's shareholders at
          a stockholders' meeting on February 15, 2002.

     As   part of the  continuation,  each share of Zoom  Telephonics,  Inc. was
          automatically converted into one share of Zoom Technologies, Inc.

(2)   Summary of Significant Accounting Policies
     (a) Basis of Presentation and Use of Estimates
     The  consolidated  financial  statements  are prepared in  accordance  with
          accounting  principles  generally  accepted  in the  United  States of
          America and are stated in US dollars.

     The  preparation  of financial  statements  in  conformity  with  generally
          accepted  accounting  principles 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
          date of the financial  statements and the reported  amounts of revenue
          and expenses  during the reporting  period.  Actual results may differ
          from  those  estimates.  Significant  estimates  made  by the  Company
          include  the  useful  lives  of  property,  plant  and  equipment  and
          goodwill,  the recoverability of long-lived assets, the collectibility
          of accounts  receivable,  the  valuation  allowance  for  deferred tax
          assets,  the valuation of sales returns and  allowances,  the reserves
          for  obsolete  and  slow  moving  inventory,  and the  write-downs  of
          inventory valuation for the lower cost of market.

     (b) Principles of Consolidation
     The  consolidated  financial statements include the accounts of the Company
          and its wholly owned subsidiary,  Zoom US, and all of its wholly owned
          subsidiaries.  All intercompany  balances and  transactions  have been
          eliminated in consolidation.

     (c) Cash and Cash Equivalents
     The  Company  considers all  investments  with original  maturities of less
          than 90  days  to be cash  equivalents.  Included  in  cash  and  cash
          equivalents   at  December  31,  2002  and  2001  was  a  deposit  for
          approximately $241,000 and $218,000, respectively, in a duty deferment
          account  approved by H.M. Customs and Excise in the United Kingdom for
          the deferment of value added taxes for imports.

     (d) Inventories
     Inventories  are  stated  at the  lower  of  cost  or  market,  cost  being
          determined using the first-in, first-out (FIFO) method.

     (e) Property, plant and equipment
     Property, plant and equipment is stated and recorded at cost.  Depreciation
          of   property,   plant  and   equipment   is  provided  by  using  the
          straight-line  method at rates sufficient to amortize the costs of the
          fixed assets over their estimated useful lives.

     (f) Accounting for Impairment of Long-Lived Assets
     The  Company uses the  provisions  of  Statement  of  Financial  Accounting
          Standards  (SFAS) No. 144,  "Accounting for the Impairment or Disposal
          of Long-Lived  Assets." This statement requires that long-lived assets
          and  certain  identifiable  intangibles  be  reviewed  for  impairment
          whenever events or changes in circumstances indicate that the carrying
          amount of an asset may not be recoverable.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

          Recoverability  of  assets  to be  held  and  used  is  measured  by a
          comparison of the carrying amount of an asset to  undiscounted  future
          net cash flows  expected to be generated by the asset.  If such assets
          are  considered  to be impaired,  the  impairment  to be recognized is
          measured  by the  amount by which the  carrying  amount of the  assets
          exceeds  the fair value of the  assets.  Assets to be  disposed of are
          reported at the lower of the  carrying  amount or fair value less cost
          to sell.

     (g) Income Taxes
     The  Company  accounts  for  income  taxes  under the  asset and  liability
          method.  Under this method,  deferred tax assets and  liabilities  are
          recognized for the future tax consequences attributable to differences
          between the financial  statement  carrying  amounts of existing assets
          and liabilities and their  respective tax basis and operating loss and
          tax credit carry  forwards.  Deferred tax assets and  liabilities  are
          measured  using enacted tax rates  expected to apply to taxable income
          in the years in which those  temporary  differences are expected to be
          recovered   or  settled.   The  effect  on  deferred  tax  assets  and
          liabilities  of a change in tax rates is  recognized  in income in the
          period that includes the enactment date.

     (h) Earnings (Loss) Per Common Share
     Basic earnings  (loss) per share is computed by dividing  net income (loss)
          by the weighted average number of common shares outstanding during the
          period.  Diluted  loss per share is computed by dividing net income by
          the weighted  average  number of common shares and dilutive  potential
          common shares outstanding during the period.  Under the treasury stock
          method,  the  unexercised  options are assumed to be  exercised at the
          beginning of the period or at issuance, if later. The assumed proceeds
          are then used to purchase  common  shares at the average  market price
          during the period.
                                           2000            2001            2002
                                           ----            ----            ----
Basic weighted
   average shares outstanding         7,756,815       7,860,866       7,860,650
Net effect of dilutive potential
   common shares outstanding, based
   on the treasury stock method               -               -               -
                                      ---------       ---------       ---------
Diluted weighted
   average shares outstanding         7,756,815       7,860,866       7,860,650
                                      =========       =========       =========

     Potential  common  shares  for which  inclusion  would  have the  effect of
          increasing  diluted  earnings  per  share  (i.e.,   antidilutive)  are
          excluded  from the  computation.  The  dilutive  effect of  options to
          purchase 419,039,  13,870 and 3,814 shares of common stock at December
          31, 2000,  2001, and 2002,  respectively,  were  outstanding,  but not
          included in the  computation  of diluted  earnings  per share as their
          effect would be antidilutive.

     (i) Revenue Recognition
     The  Company sells  hardware  products to its  customers.  The products are
          dial-up modems,  embedded modems,  cable modems, PC cameras,  ISDN and
          ADSL modems,  telephone  dialers,  and  wireless and wired  networking
          equipment.  The Company  generally does not sell software or services.
          The  Company  earns a small  amount of royalty  revenue.  The  Company
          derives its revenue  primarily from the sales of hardware  products to
          three types of  customers  (1)  computer  peripherals  retailers,  (2)
          computer   product   distributors,    and   (3)   original   equipment
          manufacturers  (OEMs).  The Company  sells a very small  amount of its
          hardware  products to direct  consumers  or to any  customers  via the
          Internet. As described below,  management judgments and estimates must
          be made and used in  connection  with the  revenue  recognized  in any
          accounting period.  Material  differences may result in the amount and
          timing of the Company's revenue for any period if its management makes
          different judgments or utilizes different estimates.

     Revenue is  recognized  by the Company for all three types of  customers at
          the point when the  customers  take legal  ownership of the  delivered
          products.  Legal  ownership  passes from the  Company to the  customer
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

          based on the contractual  FOB point specified in signed  contracts and
          purchase  orders,  which  are  both  used  extensively.  Many  of  the
          Company's   customer   contracts  or  purchase   orders   specify  FOB
          destination.  Since it would be impractical to verify ownership change
          for each individual delivery to the FOB destination point, the Company
          estimates  the day of delivery  receipt by the  customer  based on its
          ship date and the carrier's  published  delivery  schedule specific to
          the freight class and location.

     The  Company's   revenues   are  reduced  by  certain   events   which  are
          characteristic  of hardware sales to computer  peripherals  retailers.
          These events are product  returns,  price  protection  refunds,  store
          rebates, and consumer mail-in rebates.  Each of these is accounted for
          as a reduction of revenue based on careful management estimates, which
          are reconciled to actual customer or end-consumer  refunds and credits
          on a monthly or quarterly basis. The estimates for product returns are
          based on recent  historical trends plus estimates for returns prompted
          by new product  introductions,  announced stock  rotations,  announced
          customer store closings,  etc. Management analyzes historical returns,
          current economic trends, and changes in customer demand and acceptance
          of the Company's products when evaluating the adequacy of sales return
          allowances.  The  Company's  estimates  for price  protection  refunds
          require a detailed  understanding  and tracking by customer,  by sales
          program.  Estimated price protection  refunds are recorded in the same
          period as the  announcement  of a  pricing  change.  Information  from
          customer  inventory-on-hand reports or from direct communications with
          the  customers is used to estimate the refund,  which is recorded as a
          reserve against accounts  receivable and a reduction of current period
          revenue.  The  Company's  estimates for consumer  mail-in  rebates are
          comprised of actual rebate claims  processed by the rebate  redemption
          centers  plus an  accrual  for an  estimated  lag in  processing.  The
          Company's  estimates  for store rebates are comprised of actual credit
          requests from the eligible customers.

     (j) Financial Instruments
     Financial instruments of the Company consist of cash and cash  equivalents,
          accounts   receivable,   accounts  payable,   accrued  expenses,   and
          borrowings.  Due to the  short  term  nature of these  instruments  of
          conversion  to  cash  or  the  corresponding  variable  interest  rate
          attached  to  the  debt,  the  carrying   amount  of  these  financial
          instruments approximates fair value.

     (k) Stock-Based Compensation
     The  Company  accounts  for stock  based  compensation  under SFAS No. 123,
          "Accounting for Stock-Based  Compensation" (SFAS 123). As permitted by
          SFAS 123, the Company  measures  compensation  cost in accordance with
          Accounting Principles Board Opinion (APB) No. 25 (APB 25), "Accounting
          for Stock Issued to Employees,"  and FASB  interpretation  No. 44 (FIN
          44). Accordingly,  no accounting recognition is given to stock options
          granted at fair market value until they are exercised.  Upon exercise,
          net proceeds, including tax benefits realized, if any, are credited to
          equity.

     The  following  table  illustrates  the  effect on net  income  (loss)  and
          earnings  (loss) per share if the  Company  had applied the fair value
          recognition provisions of FASB 123 to stock based compensation.
<TABLE>
<S>                                                  <C>              <C>              <C>
                                                                YEAR ENDED DECEMBER 31,
                                                         2000              2001            2002
                                                      ----------       ------------     -----------
Net income (loss), as reported....................   $(3,077,248)     $(18,328,922)    $(5,135,586)

Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects........    (1,616,219)       (1,834,280)     (1,109,003)
                                                       ---------        ----------       ---------
Proforma net income (loss)........................   $(4,693,467)     $(20,163,202)    $(6,244,589)
                                                       =========        ==========       =========
Earnings (loss) per share:
Basic -- as reported..............................   $     (0.40)      $     (2.33)    $     (0.65)
Basic -- proforma.................................   $     (0.61)      $     (2.57)    $     (0.79)
                                                        =========         =========       =========
Diluted -- as reported............................   $     (0.40)      $     (2.33)    $     (0.65)
Diluted -- proforma...............................   $     (0.61)      $     (2.57)    $     (0.79)
                                                        =========         =========       =========
</TABLE>
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     Weighted-average   assumptions:   2000  -  expected  dividend  yield  0.0%,
          risk-free interest rate of 6.26%,  volatility 90% and an expected life
          of 2.0 years; 2001 - expected dividend yield 0.0%,  risk-free interest
          rate of 3.83%, volatility 102% and an expected life of 2.0 years; 2002
          - expected  dividend  yield 0.00%,  risk-free  interest rate of 2.65%,
          volatility 106% and an expected life of 2.5 years.

     (l) Advertising Costs
     Advertising  costs are  expensed  as  incurred  and  reported  in  selling,
          general, and administrative expenses in the accompanying  consolidated
          statements of operations and include costs of advertising, production,
          trade shows, and other  activities  designed to enhance demand for the
          Company's  products.  There are no deferred  advertising  costs in the
          accompanying consolidated balance sheets.

     (m) Investments in Affiliates
     Investments in which the  Company  has no  significant  influence  over the
          investee  are  accounted  for  under the cost  method  of  accounting.
          Investments in which the Company exercises  significant  influence but
          which the Company does not control are  accounted for under the equity
          method of accounting.  Under the equity method, investments are stated
          at cost and are  adjusted  for the  Company's  share of  earnings  and
          losses, contributions and distributions.

     (n) Foreign Currencies
     The  Company  generates a portion of its revenues in international  markets
          and denominated in foreign  currencies,  which subjects its operations
          to exposure to foreign currency  fluctuations.  The impact of currency
          fluctuations  can be positive or negative in any given period.  During
          the years ending  December 31, 2000,  2001, and 2002 foreign  currency
          transaction activity, gains, and losses were not material. At December
          31, 2002, the Company's foreign  currency-denominated  net assets were
          not material. The Company has no involvement with derivative financial
          instruments.

     The  Company considers the local currency to be the functional currency for
          its international  subsidiary.  Assets and liabilities  denominated in
          foreign  currencies  are  translated  using the  exchange  rate of the
          balance  sheet date.  Revenues and expenses are  translated at average
          exchange rates  prevailing  during the year.  Translation  adjustments
          resulting  from this  process are  charged or credited to  accumulated
          other comprehensive loss.

     (o) Warranty Costs
     The  Company  provides  currently  for  the  estimated  costs  that  may be
          incurred under its standard warranty obligations.

(3)   Liquidity
     In   2002, the Company's net cash provided by operating activities was $2.9
          million and net cash used in investing  activities was $.2 million. In
          2001, the Company  obtained a mortgage on its corporate  headquarters,
          which provided financing of $6 million.  On December 31, 2002 Zoom had
          cash and cash equivalents of approximately $7.6 million. Currently the
          Company does not have a debt facility from which it can borrow, and it
          does not  expect to obtain one on  acceptable  terms  unless  there is
          operating performance improvement.

     To   conserve  cash and manage the  Company's  liquidity,  the  Company has
          implemented expense reductions  throughout 2001 and 2002. The employee
          headcount was 313 at December 31, 2000,  which has been reduced to 185
          at December  31, 2002.  The Company  will  continue to assess its cost
          structure as it relates to its revenues and cash position in 2003, and
          may make further reductions if these actions are deemed necessary.

     Trends including the bundling, by PC manufacturers,  of dial-up modems into
          computers and the increased  popularity of broadband  modems lower the
          total available  market through our sales  channels.  Because of this,
          our  dial-up  modem sales are  unlikely  to grow unless the  Company's
          market  share  grows,  or the new V.92 and V.44 modem  standards  grow
          sales through the Company's  channels.  If the Company's dial-up modem
          sales do not grow,  the Company's  future success will depend in large
          part on its ability to  successfully  penetrate the  broadband  modem,
          networking, and dialer markets.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     The  Company's  cash  position  at  December  31,  2002 was  $7.6  million.
          Management  believes it has  sufficient  resources to fund its planned
          operations over the next 12 months.  However, if the Company is unable
          to increase its revenues,  reduce its expenses,  or raise capital, the
          Company's  longer-  term  ability to continue  as a going  concern and
          achieve its intended business objectives could be adversely affected.

(4)  New Accounting Pronouncements
     FASB Emerging  Issues Task Force Issue No.  00-14  "Accounting  for Certain
          Sales Incentives" addresses the recognition,  measurement,  and income
          statement  classification  for certain types of sales incentives.  The
          application  of the guidance in Issue No. 00-14 results in a change in
          the manner in which the Company records certain types of discounts and
          sales and marketing incentives that are provided to its customers. The
          Company has historically recorded certain types of these incentives as
          marketing  expenses.  Under Issue No.  00-14,  the Company will record
          these  discounts and  incentives  as  reductions of revenue.  In April
          2001, the FASB Emerging Issues Task Force reached a consensus on Issue
          No. 00-25 "Accounting for Consideration from a Vendor to a Retailer in
          Connection  with the Purchase or Promotion of the Vendor's  Products".
          Issue No. 00-25 addresses whether certain  consideration  offered by a
          vendor  to  a  distributor,   including  slotting  fees,   cooperative
          advertising   arrangements   and   "buy-down"   programs,   should  be
          characterized  as operating  expenses or  reductions  of revenue.  The
          requirements  of Issue No.  00-14 and 00-25  were  implemented  in the
          first  fiscal  quarter of 2002,  at which time prior  period  reported
          amounts were reclassified to conform to the new presentation. There is
          no  current  year or  historical  impact on our  consolidated  balance
          sheets. EITF Issue No. 01-9,  "Accounting for Consideration Given by a
          Vendor to a Customer (Including a Reseller of the Vendor's Products),"
          subsequently codified the guidance in Issue No. 00-14 and 00-25. Prior
          year   reclassifications   have  been  made  to   conform  to  current
          presentation and are as follows:
<TABLE>
<S>                       <C>                 <C>                 <C>
                                           Years  ending  December 31,
                                            2000                2001
                                           --------------------------
Revenues:
As previously reported              $    59,750,187      $   43,709,528
As reclassified                          57,708,456          41,570,276

Sales and Marketing expenses:
As previously reported                   12,713,756           9,619,549
As reclassified                          10,672,025           7,480,297
</TABLE>
     In   June  2002,  the FASB  issued  SFAS No.  146,  "Accounting  for  Costs
          Associated  with Exit or Disposal  Activities"  (SFAS  146).  SFAS 146
          requires companies to recognize costs associated with exit or disposal
          activities  when  they  are  incurred  rather  than  at the  date of a
          commitment to an exit or disposal  plan.  This  statement is effective
          for restructuring  activities  commencing after December 31, 2002. The
          Company  does not believe  that the impact of  adopting  SFAS 146 will
          have a material impact on its consolidated financial statements.

     In   November  2002,  the  FASB  issued  Interpretation  No.  45 (FIN  45),
          "Guarantor's  Accounting and Disclosure  Requirements  for Guarantees,
          Including  Indirect  Guarantees  of  Indebtedness  of  Others",  which
          clarifies disclosure and recognition/measurement  requirements related
          to certain guarantees.  The disclosure  requirements are effective for
          financial   statements   issued  after   December  15,  2002  and  the
          recognition/measurement  requirements  are  effective on a prospective
          basis for  guarantees  issued or modified after December 31, 2002. The
          application  of the  requirements  of FIN 45 did not  have a  material
          impact on the Company's financial position or results of operations.

     In   December  2002,  the  FASB  issued  SFAS  No.  148   "Accounting   for
          Stock-Based  Compensation  -- Transition and  Disclosure"  (SFAS 148).
          SFAS  148  amends   SFAS  No.   123   "Accounting   for  Stock   Based
          Compensation",  to provide  alternative  methods of  transition  for a
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

          voluntary  change to the fair value  based  method of  accounting  for
          stock-based employee  compensation.  In addition,  SFAS 148 amends the
          disclosure  requirements of SFAS 123 to require prominent  disclosures
          in both annual and interim  financial  statements  about the method of
          accounting for stock-based employee compensation and the effect of the
          method used on reported  results.  The transition  guidance and annual
          disclosure  provisions  of SFAS 148 are  effective  for  fiscal  years
          ending after December 15, 2002. The interim disclosure  provisions are
          effective for financial reports  containing  financial  statements for
          interim periods  beginning after December 15, 2002. As the Company did
          not  make a  voluntary  change  to the  fair  value  based  method  of
          accounting for stock-based employee compensation in 2002, the adoption
          of SFAS 148 did not have a material impact on the Company's  financial
          position and results of operations.

     In   January 2003, the FASB issued Interpretation No. 46, "Consolidation of
          Variable Interest Entities" ("VIEs").  This  Interpretation  addresses
          the  consolidation of variable  interest  entities in which the equity
          investors  lack  one or more  of the  essential  characteristics  of a
          controlling  financial interest or where the equity investment at risk
          is not  sufficient  for the entity to finance its  activities  without
          subordinated  financial support from other parties. The Interpretation
          applies to VIEs created after January 31, 2003 and to VIEs in which an
          interest is acquired after that date.  Effective July 1, 2003, it also
          applies to VIEs in which an interest is  acquired  before  February 1,
          2003. The Company may apply the Interpretation  prospectively,  with a
          cumulative  effect  adjustment  as of July 1,  2003,  or by  restating
          previously  issued  financial  statements  with  a  cumulative  effect
          adjustment as of the beginning of the first year restated. The Company
          is in the process of evaluating the effects of applying Interpretation
          No. 46 in 2003.  Based on our preliminary  analysis,  the Company does
          not  anticipate  that  adoption of  Interpretation  No. 46 will have a
          material effect on the Company's consolidated financial statements.

(5)  Inventories
   Inventories consist of the following at December 31:

                                                     2001            2002
                                                     ----            ----
        Raw materials                           $  6,276,480   $  2,808,421
        Work in process                              462,389        673,275
        Finished goods                             4,344,274      3,300,854
                                                  ----------    -----------
                      Net Inventory             $ 11,083,143   $  6,782,550
                                                  ==========     ==========

     During 2001  and  2002  the  Company  recorded  lower  of  cost  or  market
          write-downs of $4.6 million and $0.7 million, respectively, related to
          broadband and wireless inventory.

(6)     Property, Plant and Equipment
      Property, plant and equipment consists of the following at December 31:

                                                                     Estimated
                                            2001           2002     useful lives
                                            ----           ----     ------------
        Land                            $  309,637    $   309,637        -
        Buildings and improvements       2,695,346      2,761,616    31.5 years
        Leasehold improvements             473,723        483,039     5 years
        Computer hardware and software   3,509,445      3,550,749     3 years
        Machinery and equipment          1,699,564      1,735,057     5 years
        Molds, tools and dies            1,489,484      1,532,064     5 years
        Office furniture and fixtures      275,516        275,516     5 years
                                        ----------    -----------
                                        10,452,715     10,647,678
        Less accumulated depreciation
          and amortization              (6,323,799)    (7,161,767)
                                         ---------      ---------
                                       $ 4,128,916    $ 3,485,911
                                         =========      =========
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

(7)   Commitments and Contingencies
     (a) Lease Obligations
     The  Company leases a  manufacturing  and  warehousing  facility in Boston,
          Massachusetts,  an office facility in Camberley, United Kingdom, and a
          technical  support  facility  in  Boca  Raton,  Florida.  The  Boston,
          Massachusetts  lease  expires in August 2006.  In September  2002,  we
          entered  into a 5 year lease,  as a tenant,  for  approximately  3,500
          square feet at 950 Broken Sound  Parkway NW, Boca Raton,  Florida.  In
          March  1999,   the  Company   assumed  an  office   lease  from  Hayes
          Microcomputer  Products,  Inc. at 430 Frimley Business Park, Camberley
          Surrey,  U.K. We have an  agreement  in principle to extend this lease
          term to 2006.  Total  rent  expense,  under  non-cancelable  operating
          leases,  was  $463,693,  $546,034  and  $782,000  for the years ending
          December 31, 2000, 2001 and 2002, respectively.

     The  Company's   estimated  future  minimum  rental   payments,   excluding
          executory  costs,  under these  operating  leases are set forth in the
          table below.
                                  Year              Total
                                  2003           $ 739,836
                                  2004             741,561
                                  2005             743,286
                                  2006             490,632
                                  2007              41,389

     (b) Purchase Commitments
     The  Company has entered into supply  arrangements  with  suppliers of some
          components  that  include  price  and  other  concessions,   including
          no-charge  components,  for meeting certain  purchase  requirements or
          commitments.  Under these  arrangements  the Company is  committed  to
          purchase  approximately  $8.0 million of  components  over a period of
          approximately  30-months that  commenced on January 1, 2002,  provided
          that those  components  were offered at competitive  terms and prices.
          The Company believes that at December 31, 2002, it is on track to meet
          the $8.0 million commitment.  The Company is also required to purchase
          either a minimum  percentage,  as measured by unit purchases or dollar
          amount  of  components,   from  a  supplier  over  a  two-year  period
          commencing on January 1, 2002, and the Company is currently  exceeding
          that percentage. In connection with these arrangement, the Company was
          entitled  to receive at least $3.0  million of  no-charge  components,
          based upon the supplier's market price for the components in late 2001
          and early 2002,  and other pricing  concessions  based on our purchase
          volumes.   The  Company  received  $1.2  million  of  these  no-charge
          components  in the fourth  quarter of 2001.  The Company  received the
          remainder of the  no-charge  components  in the first quarter of 2002.
          Through  December 31, 2002, the Company consumed $1.8 million of these
          chips in its  manufacturing  process and they were shipped in finished
          products to customers in 2002. In 2002, the Company purchased and paid
          approximately  $2 million  less than would have  expected  without the
          no-charge components. Of the original $3.0 million chip valuation, $.3
          million has been  written  down as a result of a decline in the market
          value of the free chips.  The  favorable  impact to the  statement  of
          operations  is being  recognized  on a  delayed  basis  as a  purchase
          discount over the total number of components  acquired  through the 30
          month supply  agreement. The Company expects that the  remaining  $0.8
          million total market value of "no charge"  components will be consumed
          in its  manufacturing  process  and  shipped in  finished  products to
          customers in 2003.

     (c) Contingencies
     During 2001,  the Company  entered into an agreement to purchase the ground
          lease for a  manufacturing  facility  located at 27 Drydock  Avenue in
          Boston, Massachusetts (the "Drydock Building"). In connection with the
          proposed purchase of the Drydock  Building,  the Company paid $513,500
          which  was held in  escrow as a deposit  pending  the  closing  of the
          transaction. Of this deposit, $25,000 was nonrefundable. When Zoom was
          unable  to  obtain  acceptable   financing  the  Seller  (the  current
          leaseholder)  retained the deposit pending resolution of some disputed
          facts  concerning  Zoom's  withdrawal from the  transaction  under the
          terms of the Purchase and Sale Agreement.  While Zoom believed that it
          was  entitled to a return of the  $488,500  refundable  portion of the
          deposit plus  interest,  the seller  directed the escrow agent to hold
          the funds pending resolution of the dispute.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     As   an  alternative  to pursing  legal  remedies to obtain a return of the
          deposit,  Zoom pursued an arrangement to acquire the Drydock  Building
          in  partnership  with the  following  individuals:  Frank B.  Manning,
          President  and a director of Zoom;  Peter R.  Kramer,  Executive  Vice
          President  and a director of Zoom;  Bruce M.  Kramer,  Peter  Kramer's
          brother; and a third party. Under this arrangement, these individuals,
          either  directly  or  through  entities  controlled  by  them,  joined
          together  with us as of March 29,  2002 to form the Zoom  Group LLC, a
          Massachusetts limited liability company ("Zoom Group") to purchase the
          Drydock Building.  Zoom and each of the investors owned a 20% interest
          in the Zoom Group. The managers of the Zoom Group are Peter Kramer and
          the third party. There are no special allocations among the members of
          the Zoom Group,  and each member is required to contribute  his or its
          proportionate amount of capital in return for its 20% interest.

     Effective as of March 29, 2002,  the Company  entered into a  Reinstatement
          Agreement,  Assignment  Agreement and Second Amendment to Agreement of
          Purchase  and Sale with the Zoom  Group  and the owner of the  Drydock
          ground  lease.  Under  this  Reinstatement   Agreement,  the  original
          purchase   agreement   for  the  Drydock   Building  was  amended  and
          reinstated,  and the company  assigned  its rights  under the purchase
          agreement  to the Zoom Group,  together  with  rights to the  $488,500
          refundable   portion  of  the  deposit.   In   connection   with  this
          transaction,  under a separate letter agreement,  the other members of
          the Zoom Group paid us $390,800  ($97,700  each),  representing  their
          proportionate share of the deposit assigned to the Zoom Group.

     Under the Reinstatement  Agreement,  the Zoom Group  purchased  the Drydock
          Building for a purchase price of $6.1 million. The Zoom Group obtained
          a mortgage of $4.2 million,  less closing  costs and legal fees.  Each
          member of the Zoom Group  contributed  $482,577 for their share of the
          investment  plus  initial  working  capital.   These  initial  capital
          contributions include each member's share of the deposit.

     Under the Zoom Group Operating Agreement, the Company had both the right to
          sell its  interest in the Zoom Group to the other  members of the Zoom
          Group by January 5, 2003 for the Company's  original  purchase  price,
          and the right to purchase the other members'  entire  interests in the
          Zoom  Group   through   December  31,  2005  in   accordance   with  a
          predetermined  formula.  Effective  January 5, 2003,  we exercised our
          right to sell our  interest in the Zoom Group to the other  members of
          the Zoom Group.  In March 2003, we received the proceeds from the sale
          of our interest from the remaining  members of the Zoom Group,  LLC to
          the value of $.48 million,  which represents the Company's  investment
          amount less the  non-refundable  deposit and the  negotiated  share of
          losses  in the Zoom  Group,  plus  interest  earned  on the  Company's
          original  deposit.  This  action  was taken to improve  our  liquidity
          position and to reduce our exposure to the Boston real estate market.

     Additionally,  the Company is party to various lawsuits and  administrative
          proceedings  arising in the ordinary  course of business.  The Company
          evaluates such lawsuits and proceedings on a case-by-case  basis,  and
          its policy is to vigorously  contest any such claims which it believes
          are without merit. The Company's management believes that the ultimate
          resolution of such pending  matters will not  materially and adversely
          affect  the  Company's  business,   financial  position,   results  of
          operations  or cash  flows.  The  Company  had no  Letters  of  Credit
          outstanding at December 31, 2002.

     (d) Concentrations
     The  Company  participates  in  the  PC  peripherals  industry,   which  is
          characterized by aggressive  pricing practices,  continually  changing
          customer demand  patterns and rapid  technological  developments.  The
          Company's  operating  results could be adversely  affected  should the
          Company  be  unable  to   successfully   anticipate   customer  demand
          accurately;  manage  its  product  transitions,  inventory  levels and
          manufacturing  process efficiently;  distribute its product quickly in
          response to customer demand;  differentiate its products from those of
          its  competitors  or compete  successfully  in the markets for its new
          products.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     The  Company  depends  on many  third-party  suppliers  for key  components
          contained in its product offerings. For some of these components,  the
          Company may only use a single source supplier, in part due to the lack
          of  alternative  sources  of supply.  If the supply of a key  material
          component is delayed or curtailed,  the Company's  ability to ship the
          related  product or  solution  in desired  quantities  and in a timely
          manner could be adversely  affected,  possibly resulting in reductions
          in net  sales.  In cases  where  alternative  sources  of  supply  are
          available,  qualification of the sources and establishment of reliable
          supplies  could result in delays and possible  reduction in net sales.

          In the event that the financial condition of the Company's third-party
          suppliers for key components was to erode, the delay or curtailment of
          deliveries of key material components could occur.  Additionally,  the
          Company's reliance on third-party suppliers of key material components
          exposes the Company to  potential  product  quality  issues that could
          affect the  reliability and performance of its products and solutions.
          Any lesser ability to ship its products in desired quantities and in a
          timely manner due to a delay or  curtailment of the supply of material
          components,  or product quality issues arising from faulty  components
          manufactured  by third-party  suppliers,  could  adversely  affect the
          market  for the  Company's  products  and lead to a  reduction  in the
          Company's net sales.

(8)   Impairment
     In   March  1999,  the  Company   entered  into  a  series  of  independent
          agreements to acquire most of the modem assets of Hayes  Microcomputer
          Products,  Inc.  for $5.0 million in cash.  The purchase  included the
          Hayes, Practical Peripherals,  Accura, Optima, Century 2, and Cardinal
          brands  and  product  rights  for the  USA,  Canada,  South &  Central
          America,  Europe,  and the  Middle  East.  In July  1999  the  Company
          finalized the purchase of Hayes Asia Pacific for $1.1 million in cash.
          The acquisitions  were accounted for as purchases.  The excess of cost
          over  fair  value of net  assets  acquired  was being  amortized  on a
          straight-line method over five years.

     The  Company  also  recorded  negative  goodwill  that  resulted  from  the
          purchase  of the  Hayes  U.K.,  business,  where  the value of the net
          assets acquired exceeded the cost. This transaction was independent of
          other Hayes purchases.

     The  Company recorded goodwill for two acquisitions,  Tribe Computer Works,
          Inc. in 1996 and certain assets of Hayes Microcomputer  Products, Inc.
          in 1998. The goodwill  values for Tribe and Hayes were being amortized
          over  13  years  and 5  years,  respectively.  In  2001,  the  Company
          determined  that  based on its  history  of  negative  cash flows from
          operations,  a forecast  of future  positive  cash flows  could not be
          sufficiently  relied upon to support retaining the remaining  goodwill
          assets on the  consolidated  balance  sheet.  Therefore,  the  Company
          recorded an  impairment  charge of $2.3 million in 2001 and on January
          1, 2002, the Company  recorded an  extraordinary  gain of $0.3 million
          upon  the  adoption  of SFAS  No.  142.  The  gain  resulted  from the
          elimination  of the  remaining  negative  goodwill  on  the  Company's
          consolidated balance sheet. As of December 31, 2002, the Company's net
          goodwill and negative  goodwill  balances on its consolidated  balance
          sheet are zero.

          Net loss  before  goodwill  amortization,  net of tax and  related per
          share amounts for the years ended December 31, 2000,  2001, 2002 is as
          follows (in thousands, except per share amounts):
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

                                                   Year ended December 31,
                                           2000             2001           2002
                                           ----             ----           ----
Net loss as reported                  $  (3,077)        $ (18,329)    $  (5,136)
Add back: Goodwill amortization
 expense net of tax effect                  569               781             -
                                          -----            ------         -----
Adjusted net loss                     $  (2,508)        $ (17,548)    $  (5,136)

Basic and diluted loss per share,
 as reported                          $   (0.39)        $   (2.33)    $   (0.65)
Add back: Goodwill amortization
 expense net of tax effect                 0.07              0.10             -
                                          -----            ------         -----
Proforma basic and diluted loss
 per share                            $   (0.32)        $   (2.23)    $   (0.65)

(9)  Comprehensive Income (loss)
     The  components of comprehensive income (loss), net of tax, are as follows:

                                        2000             2001             2002
                                        ----             ----             ----
Net income (loss)                 $(3,077,248)    $(18,328,922)     $(5,135,586)
Foreign currency translation
 adjustment                           (80,788)        (102,689)         206,550
Net unrealized holding gain
 on investment securities              26,255               53                -
                                    ---------       ----------        ---------
Comprehensive income (loss)       $(3,131,781)    $(18,431,558)     $(4,929,036)
                                    =========       ==========        =========

(10)  Long-Term Debt
     On   January 10,  2001,  the Company  obtained a mortgage for $6 million on
          the real estate property located at 201 and 207 South Street,  Boston,
          Massachusetts.  This is a 20-year  direct  reduction  mortgage  with a
          five-year balloon due January 10, 2006. The interest rate is fixed for
          one year, based on the one year Federal Home Loan Bank rate plus 2.5 %
          per annum.  The rate is adjusted on January 10th of each calendar year
          commencing  on January  10,  2002.  The rate was  adjusted to 3.81% on
          January 10, 2003. On September 24, 2002 the Company paid an additional
          principal payment of $178,761 in compliance with a mortgage  covenant.
          Future minimum  principal  payments are due as follows at December 31,
          2002.
                          Year                Total
                          2003           $   191,550
                          2004               200,664
                          2005               211,776
                          2006             4,929,617
                                           ---------
                          Total          $ 5,533,607
                                           =========
(11)      Stock Option Plans
     At   December 31, 2002, the Company had three stock option plans, which are
          described below:

     Employee Stock Option Plan

     The  Employee Stock Option Plan (the  "Employee  Stock Option Plan") is for
          officers and certain full-time and part-time employees of the Company.
          Non-employee  directors of the Company are not entitled to participate
          under this plan.  The  Employee  Stock  Option Plan  provides  for the
          availability of 2,800,000 shares of common stock for issuance upon the
          exercise of stock  options  granted  under the plan.  Shares of common
          stock were  registered for issuance under this plan in accordance with
          the Securities Act of 1933. Under this plan, stock options are granted
          at the  discretion  of the  Stock  Option  Committee  of the  Board of
          Directors  at an option  price not less than the fair market  value of
          the  stock  on the date of  grant.  The  options  are  exercisable  in
          accordance with terms  specified by the Stock Option  Committee not to
          exceed ten years  from the date of grant.  Options  outstanding  under
          this plan are as follows:
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

                                                               Weighted average
                                          Number of shares       exercise price
        Balance at December 31, 1999          1,031,467             $   7.21
          Granted                               377,000                 7.43
          Exercised                            (196,181)                7.09
          Expired                              (254,675)               10.67
                                                -------                -----
        Balance at December 31, 2000            957,611             $   6.40
          Granted                               631,000                 2.77
          Exercised                                   -                    -
          Expired                              (550,611)                5.85
                                               --------                 ----
        Balance at December 31, 2001          1,038,000              $  4.48
          Granted                               325,000                 1.00
          Exercised                                   -                    -
          Expired                              (115,000)                4.84
                                               --------                 ----
        Balance at December 31, 2002          1,248,000              $  3.54
                                              =========                 ====

The following table summarizes  information about fixed stock options under
the Employee Stock Option Plan outstanding on December 31, 2002:
<TABLE>
<S>                  <C>              <C>                 <C>                  <C>            <C>
                                     Options Outstanding                             Options Exercisable
                     -----------------------------------------------------     ------------------------------
                                      Weighted Average
  Range of              Number           Remaining        Weighted Average       Number       Weighted Average
Exercise Prices      Outstanding      Contractual Life     Exercise Price      Exercisable     Exercise Price
$ 1.00 to $ 1.75         325,000            2.40               $ 1.00                  -           $ 0.00
  1.75 to   3.50         350,000            1.60                 2.20            175,000             2.20
  3.50 to   5.25         251,000            1.00                 3.63            125,500             3.63
  5.25 to   7.00         100,000             .50                 6.36            100,000             6.36
  7.00 to   8.75         222,000             .10                 8.00            222,000             8.00
----------------         -------            ----                 ----            -------             ----
$ 1.00 to $ 8.75       1,248,000            1.30 years         $ 3.54            622,500           $ 5.22
================       =========            ==========         ======            =======           ======
</TABLE>
     The  Company recognized a tax benefit of $489,845 in 2000 upon the exercise
          of  nonqualified  stock options under the Employee  Stock Option Plan.
          This  benefit has been  recorded as an increase to the value of common
          stock.

   1991 Director Stock Option Plan
     In   1991,  the Company  established  the  Director  Stock Option Plan (the
          "Directors Plan"). Shares of common stock were registered for issuance
          under this plan in accordance  with the  Securities  Act of 1933.  The
          Directors Plan was established for all directors of the Company except
          for any director who is a full-time  employee or full-time  officer of
          the Company.  Under the  Directors  Plan,  each  eligible  director is
          automatically  granted an option to  purchase  6,000  shares of common
          stock on July 10 and January 10 of each year, beginning July 10, 1991.
          The option  price is the fair market  value of the common stock on the
          date the option is granted.  There are 198,000  shares  authorized for
          issuance.  Each option expires two years from the grant date.  Options
          outstanding under this plan are as follows:

                                                                Weighted average
                                          Number of shares       exercise price
        Balance at December 31, 1999           72,000              $  5.93
          Granted                              36,000                 7.69
          Exercised                           (42,000)                5.99
          Expired                              (6,000)                7.75
                                              --------                ----
        Balance at December 31, 2000           60,000              $  6.76
          Granted                              36,000                 3.26
          Exercised                                 -                    -
          Expired                             (24,000)                5.37
                                              --------                ----
        Balance at December 31, 2001           72,000              $  5.48
          Granted                              36,000                 1.17
          Exercised                                 -                    -
          Expired                             (36,000)                7.69
                                              --------                ----
        Balance at December 31, 2002           72,000              $  2.21
                                               ======                 ====
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     The following table summarizes  information about fixed stock options under
the Directors Plan on December 31, 2002:
<TABLE>
<S>                  <C>              <C>                 <C>                  <C>            <C>
                                     Options Outstanding                             Options Exercisable
                     -----------------------------------------------------     -------------------------------
                                      Weighted Average
  Range of              Number           Remaining        Weighted Average       Number       Weighted Average
Exercise Prices      Outstanding      Contractual Life     Exercise Price      Exercisable     Exercise Price
$ 0.65 to $ 1.75       36,000               1.300              $ 1.17            18,000           $ 1.68
  1.75 to $ 3.50       18,000               0.500                2.40            18,000             2.40
  3.50 to   5.25       18,000               0.000                4.13            18,000             4.13
----------------      -------               ---------          ------            ------           ------
$ 0.65 to $ 5.25       72,000                .8 years          $ 2.21            54,000           $ 2.74
================      =======               =========          ======            ======           ======
</TABLE>
   1998 Employee Equity Incentive Stock Option Plan

     The  1998 Employee Equity Incentive Stock Option Plan (the "1998 Plan") was
          adopted by the Board of Directors to attract and retain  employees and
          provide  an  incentive  for them to  assist  the  Company  to  achieve
          long-range performance goals, and to enable them to participate in the
          long-term growth of the Company. Non-employee directors of the Company
          and certain  officers of the Company are not  entitled to  participate
          under  this  plan.  The  authorized  number  of shares  available  for
          issuance  under the 1998  Plan is  1,200,000  shares of common  stock.
          Shares of common stock were  registered  for  issuance  under the 1998
          Plan in accordance  with the Securities Act of 1933.  Under this plan,
          stock  options may be granted at the  discretion  of the Stock  Option
          Committee of the Board of Directors at an option price  determined  by
          the  Stock  Option  Committee.  In  addition,  in 1999,  the  Board of
          Directors  authorized  the Chief  Executive  Officer of the Company to
          grant up to an aggregate of 100,000 stock options to employees who are
          not  executive  officers or directors of the Company and in 2000,  the
          Board of Directors  authorized the Chief Executive Officer to grant to
          such  persons  stock  options to purchase up to 100,000  shares in any
          fiscal quarter, not to exceed an aggregate of 350,000 stock options in
          any fiscal year. All options under this grant have been at fair market
          value  on the  date of the  grant.  The  options  are  exercisable  in
          accordance with terms  specified by the Stock Option  Committee or, in
          certain cases, the Chief Executive Officer.  Options outstanding under
          this plan are as follows:

                                                                Weighted average
                                          Number of shares       exercise price
        Balance at December 31, 1999          328,050               $  4.25
          Granted                             514,650                  6.36
          Exercised                           (42,050)                 4.27
          Expired                            (150,275)                 5.01
                                              -------                  ----
        Balance at December 31, 2000          650,375               $  5.74
          Granted                             248,825                  2.45
          Exercised                                 -                     -
          Expired                            (199,300)                 5.82
                                              -------                  ----
        Balance at December 31, 2001          699,900               $  4.55
          Granted                             363,600                  1.00
          Exercised                                 -                     -
          Expired                            (283,000)                 3.55
                                              -------                  ----
        Balance at December 31, 2002          780,500               $  3.16
                                              =======                  ====

     The following table summarizes  information about fixed stock options under
the 1998 Plan outstanding on December 31, 2002:
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)
<TABLE>
<S>                  <C>              <C>                 <C>                  <C>            <C>
                                     Options Outstanding                             Options Exercisable
                     -----------------------------------------------------     ------------------------------
                                      Weighted Average
  Range of              Number           Remaining        Weighted Average       Number       Weighted Average
Exercise Prices      Outstanding      Contractual Life     Exercise Price      Exercisable     Exercise Price

$ 1.00 to $ 1.75      336,900               2.40               $ 1.01             4,000           $ 1.22
  1.75 to   3.50      196,350               1.30                 2.68           122,512             2.81
  3.50 to   5.25       12,000               1.00                 3.63             6,000             3.63
  5.25 to   7.00      168,250               0.50                 5.86           168,250             5.86
  7.00 to   8.75       47,000               0.20                 7.98            47,000             7.98
  8.75 to  10.50       20,000               0.30                10.00            20,000            10.00
----------------      -------               ---------           -----            ------            -----
$ 1.00 to $10.50      780,500               1.5 years          $ 3.16           367,762           $ 5.25
================      =======               =========          ======           =======           ======
</TABLE>
     On   December 31, 2002 there were 845,446  additional  shares available for
          issuance   under  all  three  stock  option   plans.   The  per  share
          weighted-average  fair value of stock  options  granted  during  2000,
          2001, and 2002 was $3.48,  $1.47 and $0.54, respectively,  on the date
          of  grant  using  the  Black  Scholes  option-pricing  model.

(12)  Income Taxes
Income tax expense (benefit) consists of the following:
<TABLE>
<S>                                           <C>              <C>               <C>
                                                Current           Deferred             Total
        Year ending December 31, 2000:
          US federal                          $    48,160      $  (1,539,591)    $  (1,491,431)
          State and local                               -            192,515           192,515
          Foreign                                       -                  -                 -
                                                  -------         -----------      -----------
                                              $    48,160      $  (1,347,076)    $  (1,298,916)
                                                   ======         ===========      ===========
        Year ending December 31, 2001:
          US federal                          $         -      $   3,337,900     $   3,337,900
          State and local                               -            462,100           462,100
          Foreign                                       -                  -                 -
                                                   ------        -----------       -----------
                                              $         -      $   3,800,000     $   3,800,000
                                                   ======        ===========       ===========
        Year ending December 31, 2002:
          US federal                          $         -      $   1,612,634     $   1,612,634
          State and local                               -            400,210           400,210
          Foreign                                   1,695                  -             1,695
                                                   -------       -----------       -----------
                                             $      1,695      $   2,012,844     $   2,014,539
                                                   =======       ===========       ===========
</TABLE>
     Income tax expense  (benefit) was  ($1,298,916),  $3,800,000 and $2,014,539
for the  years  ending  December  31,  2000,  2001 and 2002,  respectively,  and
differed  from the amounts as computed by applying the US statutory  tax rate of
34% to pretax loss as a result of the following:
<TABLE>
<S>                                                              <C>              <C>             <C>
                                                                      2000             2001           2002
                                                                      ----             ----           ----
        Computed "expected" US tax benefit                       $ (1,487,896)    $ (4,939,834)   $(1,147,954)        -
        Increase (reduction) in income taxes resulting from:
          State and local income taxes, net of federal
            income tax benefit                                        127,061          304,986        264,139
          Increase (reduction) in federal valuation allowance               -        8,427,351      2,885,398
          Other, net                                                   61,919            7,497         12,956
                                                                   -----------     -----------      ---------
        Income tax expense (benefit)                             $ (1,298,916)    $  3,800,000    $ 2,014,539
                                                                   ===========     ===========      =========
</TABLE>
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

     Total income tax expense (benefit) was allocated as follows:
<TABLE>
<S>                                                              <C>              <C>            <C>
                                                                       2000           2001           2002
                                                                       ----           ----           ----
        Loss from operations                                     $ (1,298,916)    $ 3,800,000    $ 2,014,539
        Stockholders' equity, for compensation expense
          for tax purposes in excess of amounts
          recognized for financial statement purposes                (489,845)              -              -
                                                                   -----------      ---------     -----------
                                                                 $ (1,788,761)    $ 3,800,000    $ 2,014,539
                                                                   ===========      =========     ===========
</TABLE>
     The tax  effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
2000, 2001, and 2002 are presented below:
<TABLE>
<S>                                                              <C>             <C>             <C>
                                                                      2000           2001            2002
                                                                      ----           ----            ----
        Deferred tax assets:
        Inventories, primarily non-deductible reserves           $ 1,830,940     $ 2,862,364     $ 2,688,239
        Accounts receivable,
          primarily returns and allowances                           534,204         497,510         340,213
        Accrued expenses, principally provisions
          not currently deductible                                   392,011         345,249         228,992
        Net operating loss carryforwards and
          credits                                                  3,697,196       8,307,793       9,768,697
        Other                                                        525,493       1,224,952       1,544,889
                                                                     -------       ---------       ---------
        Total gross deferred tax assets                            6,979,844      13,237,868      14,571,030
        Less valuation allowance                                  (1,167,000)    (11,225,024)    (14,571,030)
                                                                   ---------      ----------      ----------
        Net deferred tax assets                                  $ 5,812,844     $ 2,012,844     $         -
                                                                   =========      ==========      ==========
</TABLE>
     On   December  31,  2002,  the Company had federal and state net  operating
          loss  carryforwards  of  approximately  $20,841,000  and  $20,597,000,
          respectively.  These  federal  and  state  net  operating  losses  are
          available  to  offset  future  taxable  income,  and are due to expire
          beginning 2018 and 2003, respectively. The Company recorded a deferred
          tax asset  valuation  allowance  against a portion of the deferred tax
          assets that  management  believes  may expire  unused.  The  valuation
          allowance  reduces deferred tax assets to reflect the estimated amount
          of  deferred  tax  assets,  which will more  likely  not be  realized.
          Realization of deferred tax assets is dependent upon the generation of
          future  taxable  income or gains from the sale or certain real estate.
          The Company has  recorded a valuation  allowance  against its deferred
          tax assets because management believes that, after considering all the
          available objective evidence, historical and prospective, with greater
          weight given to historical  evidence,  it is more likely than not that
          these assets will not be realized.

 (13)  Significant Customers
     Two  customers accounted for approximately 15% and 11% of net sales for the
          year ending  December 31, 2000. Four customers each comprised over 10%
          of net sales for the year ending  December 31, 2001.  Three  customers
          each comprised over 10% of net sales for the year ending  December 31,
          2002. On December 31, 2001, two customers comprised  approximately 40%
          of net accounts  receivable.  On December 31,  2002,  three  customers
          comprised approximately 79% of net accounts receivable.

(14)  Investment in Affiliates
     In   September 1999, the Company made an investment in a limited  liability
          company ("LLC").  The Company granted the LLC the rights to a software
          license in exchange for 300,000 Class A shares of the LLC,  which were
          valued by the  Company  at  $300,000.  The value at which the  outside
          investors  paid cash for shares  received  as part of the same  equity
          infusion  was used by the Company to value their shares  received.  In
          May 2000, the LLC converted to a "C"  corporation.  In March 2001, and
          December  2001,  the  Company  made  additional   investments  in  the
          affiliate  for a total of  $141,665,  maintaining  the same percent of
          ownership.  As a result of the  recognition of the Company's  share of
          equity  in losses  of the  affiliate,  the  investment  balance  as of
          December 31, 2002 has been reduced to zero.
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

(15)  Supplemental Disclosure of Cash Flow Information

                                                   2000       2001         2002
                                                   ----       ----         ----
         Cash paid during year for interest       $    -   $ 426,803   $ 306,237
                                                  ======   =========   =========
         Cash paid during year for income taxes   $    -   $       -   $  66,624
                                                  ======   =========   =========

The tax benefit of the exercise of stock options resulted in increases to common
stock of $489,845 in 2000. No options were exercised in 2001 or 2002.

(16)  Dependence on Key Suppliers and Contract Manufacturers
     The  Company  produces  its  products  using  components  or  subassemblies
          purchased  from  third-party  suppliers.  An  important  factor in the
          Company's liquidity is the receipt and use of "no-charge  components".
          The Company has entered  into supply  arrangements  with  suppliers of
          some  components that include price and other  concessions,  including
          no-charge  components,  for meeting certain  purchase  requirements or
          commitments.  Under these  arrangements,  the Company is  committed to
          purchase  approximately  $8.0 million of  components  over a period of
          approximately  30-months that  commenced on January 1, 2002,  provided
          that  those  components  are were  offered  at  competitive  terms and
          prices.  The Company  believes that at December 31, 2002, that it's on
          track  to meet  the  $8.0  million  commitment.  The  Company  is also
          required to purchase either a minimum percentage,  as measured by unit
          purchases  or dollar  amount of  components,  from a  supplier  over a
          two-year  period  commencing  on January 1, 2002,  and the  Company is
          currently   exceeding  that  percentage.   In  connection  with  these
          arrangements,  the  Company  became  entitled to receive at least $3.0
          million of  no-charge  components,  based upon the  supplier's  market
          price  for the  components  in late  2001 and  early  2002,  and other
          pricing  concessions  based  on  our  purchase  volumes.  The  Company
          received  $1.2  million of these  no-charge  components  in the fourth
          quarter of 2001.  The Company  received the remainder of the no-charge
          components  in the first quarter of 2002.  Through  December 31, 2002,
          the Company consumed $1.8 million of these chips in our  manufacturing
          process and they were  shipped in finished  products to  customers  in
          2002. In 2002, the Company's purchases and payments were approximately
          $2 million less than expected without the no-charge components. Of the
          original  $3.0  million chip  valuation,  $.3 million has been written
          down as a result of a decline in the market  value of the free  chips.
          The favorable impact to the Company's statement of operations is being
          recognized  on a delayed  basis as a purchase  discount over the total
          number of components  acquired through the 30 month supply  agreement.
          Since the start of these  arrangements  in January 2002, the favorable
          impact to the Company's statement operations was $.8 million.

     A    substantial  percentage  of the  Company's  manufacturing  in 2002 was
          performed  by a  contract  manufacturer,  SameTime  Electronics,  Inc.
          ("SameTime");  the loss of SameTime's  services or a material  adverse
          change in SameTime's  business or in the Company's  relationship  with
          SameTime could materially and adversely harm the Company's business.

(17)  Segment and Geographic Information
     The  Company's  operations  are  classified  into one  reportable  segment.
          Substantially  all of the Company's  operations and long-lived  assets
          reside  primarily in the United  States.  The  Company's  net sales to
          North America and net sales to international locations for 2000, 2001,
          and 2002 were comprised as follows:
<TABLE>
<S>              <C>              <C>          <C>            <C>         <C>             <C>
                        2000     % of Total          2001     % of Total       2002       % of Total
                        ----      ----------         ----     ----------       ----       ----------
North America     $  40,524,456       70%      $  25,828,176      62%     $  22,375,552       60%
International        17,184,000       30%         15,742,100      38%        14,898,735       40%
                     ----------       ---         ----------      ---        ----------       ---
Total             $  57,708,456      100%      $  41,570,276     100%     $  37,274,287      100%
                     ==========      ====         ==========     ====        ==========      ====
</TABLE>
<PAGE>
                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
             Notes to Consolidated Financial Statements (Continued)

(18)  Retirement Plan
     The  Company  established a 401(k) retirement savings plan for employees in
          January 1996.  Under the provisions of the plan,  the Company  matches
          25%  of an  employee's  contribution,  up to a  maximum  of  $350  per
          employee per year. Total Company  contributions in 2000, 2001 and 2002
          were $55,314, $46,749 and $34,531, respectively.

(19)  Selected Quarterly  Financial  Information (in thousands, except per share
      data, unaudited)
     The  following table sets forth selected quarterly  financial for the years
          ended December 31, 2001 and 2002. The operating  results for any given
          quarter  are not  necessarily  indicative  of  results  for any future
          period.
<TABLE>
<S>                                  <C>      <C>      <C>       <C>          <C>      <C>      <C>      <C>
                                            2001 Quarter Ending                       2002 Quarter Ending
                                     Mar. 31  June 30 Sept. 30  Dec. 31       Mar. 31  June 30  Sept.30  Dec. 31
                                     -------  ------- --------  -------       -------  -------  -------  -------
Net sales                             10,027  $10,246  $11,719  $ 9,578       $ 8,973  $ 9,207  $10,879  $ 8,215
Costs of goods sold                    9,875    8,091    8,889    8,338         7,183    7,225    7,708    5,822
                                      ------   ------   ------   ------        ------   ------   ------   ------
  Gross profit (loss)                    152    2,155    2,830    1,240         1,790    1,982    3,171    2,393
                                      ------   ------   ------   ------        ------   ------   ------   ------
Operating expenses:
  Selling                              2,224    1,813    1,802    1,642         1,572    1,492    1,423    1,361
  General and administrative           1,635    1,503    1,433    3,367           911      852      825      817
  Research and development             1,479    1,341    1,334    1,174         1,076      856      879      716
                                      ------    -----    -----    -----         -----    -----    -----    -----
   Total operating expenses            5,338    4,657    4,569    6,183         3,559    3,200    3,127    2,894
                                      ------    -----    -----    -----         -----    -----    -----    -----
    Operating profit (loss)           (5,186)  (2,502)  (1,739)  (4,943)       (1,769)  (1,218)      44     (501)

Other income (expense), net              (29)    (128)      22      (24)           35       11       48      (25)
                                         ---      ---       --       --            --       --       --       --
    Income (loss) before income
      taxes and extraordinary item    (5,215)  (2,630)  (1,717)  (4,967)       (1,734)  (1,207)      92     (526)
Income tax expense (benefit)               -    3,800        -        -         2,013        -        -        2
                                       ------   -----   ------    -----        ------    -----    -----    -----
    Income (loss) before
       extraordinary item                  -        -        -        -        (3,747)  (1,207)      92     (528)
    Extraordinary gain on
      elimination of goodwill              -        -        -        -           255        -        -        -
                                        ------   -----   ------    -----        ------    -----    -----    -----
      Net income (loss)              $(5,215) $(2,630) $(5,517) $(4,967)      $(3,492) $(1,207) $    92  $  (528)
                                       =====    =====    =====    =====         =====    =====    =====    =====
Net loss per common share:
        Basic and diluted            $ (0.66) $ (0.33) $ (0.70) $ (0.63)      $ (0.44) $ (0.15) $  0.01  $ (0.07)

Weighted average common
   and common equivalent
   Shares:
        Basic and diluted              7,861    7,861    7,861    7,861         7,861    7,861    7,861    7,861
</TABLE>
<PAGE>
ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)           Financial Statements, Schedules and Exhibits:

    (1), (2)  The consolidated  financial  statements and required schedules are
              indexed on page F-1.

    (3)       Exhibits required by the Exhibit Table of Item 601 of SEC
              Regulation S-K. (Exhibit numbers refer to numbers in the Exhibit
              Table of Item 601.)

        3.1   Certificate of Incorporation, filed as Exhibit 3.1 to Zoom
              Technologies, Inc. Current Report on Form 8-K dated February 28,
              2002, filed with the Commission on March 4, 2002 (the "March 2002
              Form 8-K). *

        3.2   By-Laws of Zoom  Technologies, Inc., filed as  Exhibit 3.2  to the
              March 2002 Form 8-K. *

     **10.1   1990  Stock  Option Plan, as  amended, of  Zoom Telephonics, Inc.,
              filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the
              fiscal quarter ended June 30, 1998. *

     **10.2   1991 Director Stock Option Plan, as amended, of Zoom Telephonics,
              Inc., filed as Exhibit 10.2 to the Quarterly Report on Form 10-Q
              for the fiscal quarter ended June 30, 1996 (the "June 1996 Form
              10-Q") and as further amended on June 14, 2001, filed as Exhibit
              10.2 to the Annual Report on Form 10-K for the fiscal year ending
              December 31, 2001. *

       10.3   1998 Employee Equity Incentive Plan, as amended, filed as Exhibit
              99.1 to Registration Statement on Form S-8 (Reg. No.333-47188).*

       10.4   Lease  between  Zoom Telephonics, Inc. and "E" Street  Associates,
              filed as Exhibit 10.5 to the June 1996 Form 10-Q. *

       10.5   Form  of Indemnification  Agreement, filed as Exhibit 10.6 to  the
              June 1996 Form 10-Q. *

     **10.6   Letter Agreement  between Zoom  and an executive officer, filed as
              Exhibit 10.1 to  the Quarterly Report  on Form 10-Q for the fiscal
              quarter ending September 30, 2000. *

     **10.7   Employment Agreement, filed  as Exhibit  10.9 to the Form 10-K for
              the fiscal year ended December 31, 2002. *

       10.8   Mortgage,  Security  Agreement  and  Assignment  between  Zoom and
              Wainwright  Bank & Trust  Company,  filed as Exhibit  10.1 to  the
              Quarterly  Report on Form 10-Q for the fiscal quarter ended  March
              31, 2001 (the "March 2001 Form 10-Q"). *

       10.9   Commercial  Real  Estate   Promissory  Note,   between  Zoom  and
              Wainwright  Bank & Trust  Company,  filed as Exhibit  10.2 to the
              March 2001 Form 10-Q. *

       10.10  Operating  Agreement,  Zoom Group LLC  dated as of March 29, 2002,
              filed  as Exhibit  10.1 to the  Quarterly  Report on Form 10-Q for
              the fiscal quarter ended March 2002. *

       10.11  Agreement between Zoom  Telephonics,  Inc and  Members of the Zoom
              Group dated  as of March 22, 2002, filed as  Exhibit 10.2  to  the
              March 2002 Form 10-Q. *

       10.12  Reinstatement   Agreement,   Assignment    Agreement   and  Second
              amendment of  Purchase and Sale  dated as of March 29, 2002, filed
              as Exhibit 10.3 to the March 2002 Form 10-Q. *
<PAGE>

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(Continued)

       21.    Subsidiaries. *

       23.    Consent of KPMG LLP.

       99.1   Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of
              Title 18, United States Code).

       99.2   Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of
              Title 18, United States Code).

  (b)         Reports on Form 8-K.
              No current  reports  on Form 8-K have been filed  during the last
              quarter for the period covered by this report.

  (c)         Exhibits  - See  Item  15(a)(3)  above  for a  list  of  Exhibits
              incorporated herein by reference or filed with this Report.

  (d)         Schedules - Schedule II: Valuation and Qualifying Accounts.
              Schedules other than those listed above have been omitted since
              they are either inapplicable or not required.

    *         In accordance with Rule 12b-32 under the Securities Exchange Act
              of 1934, as amended, reference is made to the documents previously
              filed with the Securities and Exchange Commission, which documents
              are hereby incorporated by reference.

   **         Compensation Plan or Arrangement.
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                         ZOOM TECHNOLOGIES, INC.
                                         (Registrant)


                                          By:  /s/ Robert A. Crist
                                          ----------------------------
                                           Principal Financial and
                                           Accounting Officer

Date:  June 12, 2003


<PAGE>
                                  CERTIFICATION

I, Frank B. Manning, President and Chief Executive Officer of Zoom Technologies,
Inc., certify that:

1.   I have  reviewed  this annual  report on Form 10-K/A of Zoom  Technologies,
     Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

b)   evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions  about the effectiveness of
     the disclosure  controls and  procedures  based on our evaluation as of the
     Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  June 12, 2003

/s/ Frank B. Manning
-----------------------
Frank B. Manning
President and Chief Executive Officer
<PAGE>
                                  CERTIFICATION

I, Robert A. Crist, Chief Financial Officer of Zoom Technologies,  Inc., certify
that:

1.   I have  reviewed  this annual  report on Form 10-K/A of Zoom  Technologies,
     Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

b)   evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions  about the effectiveness of
     the disclosure  controls and  procedures  based on our evaluation as of the
     Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: June 12, 2003

 /s/ Robert A. Crist
-----------------------
Robert A. Crist
Chief Financial Officer
<PAGE>

                                  EXHIBIT INDEX

        3.1   Certificate  of  Incorporation,  filed  as  Exhibit  3.1 to  Zoom
              Technologies,  Inc. Current Report on Form 8-K dated February 28,
              2002, filed with the Commission on March 4, 2002 (the "March 2002
              Form 8-K). *

        3.2   By-Laws of  Zoom Technologies, Inc., filed as  Exhibit 3.2 to  the
              March 2002 Form 8-K. *

     **10.1   1990 Stock Option  Plan, as  amended, of  Zoom  Telephonics, Inc.,
              filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the
              fiscal quarter ended June 30, 1998. *

     **10.2   1991 Director Stock Option Plan, as amended, of Zoom Telephonics,
              Inc., filed as Exhibit 10.2 to the Quarterly Report on Form 10-Q
              for the fiscal quarter ended June 30, 1996 (the "June 1996 Form
              10-Q") and as further amended on June 14, 2001, filed as Exhibit
              10.2 to the Annual Report on Form 10-K for the fiscal year ending
              December 31, 2001. *

       10.3   1998 Employee Equity  Incentive Plan, as  amended filed as Exhibit
              99.1 to Registration Statement on Form S-8 (Reg. No. 333-47188).*

       10.4   Lease  between  Zoom Telephonics, Inc. and "E" Street  Associates,
              filed as Exhibit 10.5 to the June 1996 Form 10-Q.*

       10.5   Form of  Indemnification Agreement, filed  as  Exhibit 10.6 to the
              June 1996 Form 10-Q. *

     **10.6   Letter Agreement between Zoom and an executive officer, filed as
              Exhibit 10.1 to the Quarterly Report on Form 10-Q for the fiscal
              quarter ending September 30, 2000. *

     **10.7   Employment  Agreement, filed as  Exhibit 10.9 to the Form 10-K for
              the fiscal year ended December 31, 2002. *

       10.8   Mortgage, Security Agreement and Assignment between Zoom and
              Wainwright Bank & Trust Company, filed as Exhibit 10.1 to the
              Quarterly Report on Form 10-Q for the fiscal quarter ended March
              31, 2001 (the "March 2001 Form 10-Q"). *

       10.9   Commercial   Real   Estate  Promissory   Note,  between  Zoom  and
              Wainwright Bank &  Trust  Company, filed  as  Exhibit 10.2 to  the
              March 2001 Form 10-Q. *

       10.10  Operating  Agreement,  Zoom Group LLC  dated as of March 29, 2002,
              filed  as Exhibit  10.1 to the  Quarterly  Report on Form 10-Q for
              the fiscal quarter ended March 2002. *

       10.11  Agreement between Zoom  Telephonics,  Inc and  Members of the Zoom
              Group dated  as of March 22, 2002, filed as  Exhibit 10.2  to  the
              March 2002 Form 10-Q. *

       10.12  Reinstatement   Agreement,   Assignment    Agreement   and  Second
              amendment of  Purchase and Sale  dated as of March 29, 2002, filed
              as Exhibit 10.3 to the March 2002 Form 10-Q. *

       21.    Subsidiaries. *

       23.    Consent of KPMG LLP.

       99.1   Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of
              Title 18, United States Code).

       99.2   Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of
              Title 18, United States Code).

       *      In accordance with Rule 12b-32 under the Securities Exchange Act
              of 1934, as amended, reference is made to the documents previously
              filed with the Securities and Exchange Commission, which documents
              are hereby incorporated by reference.

       **     Compensation Plan or Arrangement.
<PAGE>

                                   Schedule II

                     ZOOM TECHNOLOGIES, INC. AND SUBSIDIARY
                        VALUATION AND QUALIFYING ACCOUNTS
                  Years ending December 31, 2000, 2001 and 2002

<TABLE>
<S>                            <C>            <C>            <C>           <C>



                                Balance at       Charged                      Balance
                                 Beginning   (Credited) to      Amount        at end
        Description               of year        Expense     written off      of year
                                  --------       -------     -----------      -------
Reserve for doubtful accounts  $   958,663    $   (43,608)   $   560,849   $   354,206
Reserve for price protection       649,686        235,651        686,588       198,749
Reserve for sales returns        2,934,019      7,532,526      9,401,130     1,065,415
COOP advertising and other
allowances                       2,228,223      6,566,840      7,285,978     1,509,085
                                 ---------      ---------     ----------     ---------
Year ending December 31, 2000  $ 6,770,591    $14,291,409    $17,934,545   $ 3,127,455
                                 =========     ==========     ==========     =========
Reserve for doubtful accounts  $   354,206    $   162,416    $   284,351   $   232,271
Reserve for price protection       198,749        943,820        403,456       739,113
Reserve for sales returns        1,065,415      5,628,163      6,013,536       680,042
COOP advertising and other
allowances                       1,509,085      4,332,751      4,676,813     1,165,023
                                 ---------      ---------     ----------     ---------
Year ending December 31, 2001  $ 3,127,455    $11,067,150    $11,378,156   $ 2,816,449
                                 =========     ==========     ==========     =========
Reserve for doubtful accounts  $   232,271    $    36,944    $   209,809   $    59,406
Reserve for price protection       739,113        699,482        774,263       664,332
Reserve for sales returns          680,042        756,012        522,040       914,014
COOP advertising and other
allowances                       1,165,023      3,960,531      4,116,898     1,008,656
                                 ---------      ---------     ----------     ---------
Year ending December 31, 2002  $ 2,816,449    $ 5,452,969    $ 5,623,010   $ 2,646,408
                                 =========     ==========     ==========     =========

</TABLE>
<PAGE>
                                   EXHIBIT 23

                   REPORT ON FINANCIAL STATEMENT SCHEDULE AND
                         CONSENT OF INDEPENDENT AUDITORS



The Board of Directors;
Zoom Technologies, Inc.


The audits referred to in our report dated February 11, 2003, except as to notes
3 and 7(c),  which are as of March 28,  2003,  included  the  related  financial
statement schedule for each of the years in the three-year period ended December
31, 2002  included in the annual report on Form 10-K.  The  financial  statement
schedule is the responsibility of the Company's  management.  Our responsibility
is to  express  an  opinion on the  financial  statement  schedule  based on our
audits. In our opinion,  such financial statement  schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.

We consent to  incorporation  by reference in the  registration  statements (No.
33-42834, No.33-90930, No.333-60565, No.333-75575, No.33-90191, No.333-47188 and
No.333-97573)  on Form  S-8 of Zoom  Technologies,  Inc.,  of our  report  dated
February  11,  2003,  except as to notes 3 and  7(c),  which are as of March 28,
2003, relating to the consolidated balance sheets of Zoom Technologies, Inc. and
subsidiary  as of  December  31,  2001 and 2002,  and the  related  consolidated
statements of operations,  stockholders'  equity and comprehensive loss and cash
flows and related schedule for each of the years in the three-year  period ended
December 31, 2002,  which report  appears in the December 31, 2002 annual report
on Form 10-K/A of Zoom Technologies, Inc.



                                        /s/ KPMG LLP




Boston, Massachusetts
March 28, 2003

<PAGE>
                                  Exhibit 99.1

                                  Certification
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United
                                  States Code)


     I,  Frank  B.  Manning,  President  and  Chief  Executive  Officer  of Zoom
Technologies,  Inc., a Delaware corporation (the "Company"),  do hereby certify,
pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002 (subsections (a) and
(b) of Section  1350,  Chapter 63 of Title 18,  United States Code) that, to the
best of my knowledge and belief:

(1)  The Annual Report on Form 10-K/A for the year ended  December 31, 2002 (the
     "Form 10-K") of the Company fully complies with the requirements of Section
     13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The  information  contained  in the Form  10-K/A  fairly  presents,  in all
     material respects, the financial condition and results of operations of the
     Company.


Dated: June 12, 2003                 /s/ Frank B. Manning
                                    ------------------------------------
                                    Frank B. Manning
                                    President and Chief Executive Officer
<PAGE>


                                  Exhibit 99.2

                                  Certification
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United
                                  States Code)


     I, Robert A. Crist, Chief Financial Officer of Zoom  Technologies,  Inc., a
Delaware corporation (the "Company"), do hereby certify, pursuant to Section 906
of the  Sarbanes-Oxley  Act of 2002  (subsections  (a) and (b) of Section  1350,
Chapter 63 of Title 18,  United  States Code) that,  to the best of my knowledge
and belief:

(1)  The Annual Report on Form 10-K/A for the year ended  December 31, 2002 (the
     "Form 10-K") of the Company fully complies with the requirements of Section
     13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The  information  contained  in the Form  10-K/A  fairly  presents,  in all
     material respects, the financial condition and results of operations of the
     Company.


Dated: June 12, 2003                 /s/ Robert A. Crist
                                    ------------------------------------
                                    Robert A. Crist
                                    Chief Financial Officer