ZOOM TELEPHONICS INC, S-3, 1996-06-14

ZOOM TELEPHONICS INC
S-3, 1996-06-14
TELEPHONE & TELEGRAPH APPARATUS

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As filed with the Securities and Exchange Commission on June 14, 1996
Registration No. 33-
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

--------------------------

FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933

--------------------------

ZOOM TELEPHONICS, INC.
(Exact Name Of Registrant As Specified In Its Charter)

Canada Not Applicable
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification Number)

207 South Street, Boston, Massachusetts 02111 (617) 423-1072
(Address, Including Zip Code, And Telephone Number, Including
Area Code, Of Registrant's Principal Executive Offices)

--------------------------

Frank B. Manning,
President and Chief Executive Officer
Zoom Telephonics, Inc.
207 South Street
Boston, Massachusetts 02111
(617) 423-1072
(Name, Address, Including Zip Code, And Telephone Number,
Including Area Code, Of Agent For Service)

--------------------------

Copies to:
Lawrence M. Levy, Esq.
Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, Massachusetts 02111
(617) 856-8200

--------------------------

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Proposed
Maximum Amount of
Title of Each Class of Aggregate Registration
Securities to be Registered Offering Price(1) Fee
- -------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, no par value $1,783,883 $615.13
===============================================================================
</TABLE>

(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933.

--------------------------

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================

<PAGE>

PROSPECTUS
Subject to Completion, dated June 14, 1996

97,747 Shares*

ZOOM TELEPHONICS, INC.

Common Stock
-----------------------

All of the shares of Common Stock, no par value ("Common Stock"), of Zoom
Telephonics, Inc. ("Zoom" or the "Company") covered by this Prospectus are
issued and outstanding shares which may be offered and sold from time to time by
a certain stockholder of the Company (the "Selling Stockholder"). See "Selling
Stockholder."

On May 30, 1996, the last reported sale price on the Nasdaq National Market
for the Common Stock was $21.88 per share. The Common Stock is quoted on the
Nasdaq National Market under the symbol "ZOOM."

The Selling Stockholder has advised the Company that it may sell, from to
time, all or part of the shares covered by this Prospectus through any of
several methods, including ordinary brokerage transactions or block transactions
on the Nasdaq National Market at market prices, or in privately negotiated
transactions at prices agreed upon by the parties. See "Plan of Distribution."

The Company will not receive any of the proceeds from the sale of shares
covered by this Prospectus but will bear all expenses incurred in effecting the
registration of such shares, including all registration and filing fees, "blue
sky" fees, printing expenses and legal fees for counsel to the Company. The
Stockholder will bear all brokerage or underwriting expenses or commissions, if
any, applicable to the shares.

See "Risk Factors" commencing on page 3 of this Prospectus for a
discussion of certain factors relevant to an investment in the shares of Common
Stock offered hereby.

-----------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE

-----------------------

The date of this Prospectus is June __ , 1996.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

- -------------------
*Subject to adjustment and based upon the last reported sale price of the Common
Stock on the Nasdaq National Market on June 12, 1996 ($18.25). See "Selling
Stockholder."

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the
following Regional Offices of the Commission: New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington,
D.C. 20549, at prescribed rates. In addition, reports, proxy statements and
certain other information concerning the Company (symbol: ZOOM) can be inspected
and copied at the offices of the Nasdaq National Market, Nasdaq Operations, 1735
K Street N.W., Washington, D.C. 20006, on which the Common Stock of the Company
is quoted.

The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended,
with respect to the Common Stock being offered hereby. This Prospectus does not
contain all of the information set forth in such Registration Statement and the
exhibits and schedules thereto to which reference is hereby made. The statements
in this Prospectus as to the contents of such Registration Statement are
qualified in their entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference,
except as superseded or modified herein:

1. The Company's Annual Report on Form 10-K for the fiscal year
ending December 31, 1995;
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ending March 31, 1996; and
3. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10.

Each document filed subsequent to the date of the Prospectus pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of the offering shall be deemed to be incorporated by reference in this
Prospectus and shall be part hereof from the date of the filing of such
document.

The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any of the documents referred to above (other
than exhibits unless such exhibits are specifically incorporated by reference
into the information incorporated herein). Requests for such copies should be
directed to: Investor Relations, Zoom Telephonics, Inc., 207 South Street,
Boston, Massachusetts 02111, telephone number (617) 423-1072.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is (or is deemed to be)
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
------------------------------------

No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Selling Stockholder. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than those specifically offered hereby or of any securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make an offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances create an implication
that the information herein is correct as of any time subsequent to its date.

<PAGE>

THE COMPANY

Zoom Telephonics, Inc. ("Zoom" or the "Company") is a leading
designer, producer and marketer of faxmodems and other personal computer
("PC") communications products for the home and office. The Company sells its
products worldwide to retailers, distributors and original equipment
manufacturers ("OEMs").

Zoom Telephonics, Inc., a Canadian corporation, is the parent company of
its wholly owned subsidiary, Zoom Telephonics, Inc., a Delaware corporation. The
United States subsidiary was incorporated as a New York corporation in 1977 and
was reincorporated as a Delaware corporation in March 1993. The Canadian parent
was incorporated on July 7, 1986 as a British Columbia corporation. In 1991, the
parent changed its jurisdiction of incorporation to Canada. The Canadian parent
conducts no active business operations and functions solely as the parent
company of the United States subsidiary. The Company's executive offices are
located at 207 South Street, Boston, Massachusetts 02111, and its telephone
number is (617) 423-1072.

RISK FACTORS

In addition to the other information set forth or incorporated by
reference in this Prospectus, prospective investors should carefully consider
the following risk factors in evaluating an investment in the Company and its
business before purchasing any shares of Common Stock offered hereby. Except for
the historical information contained or incorporated by reference herein, the
discussion in this Prospectus and the documents incorporated by reference herein
contain certain forward-looking statements that involve risks and uncertainties,
such as statements of the Company's plans, objectives, expectations and
intentions. The cautionary statements made in this Prospectus and the documents
incorporated by reference herein should be read as being applicable to all
forward-looking statements wherever they appear. The Company's actual results
could differ materially from those discussed or incorporated by reference
herein. Factors that could contribute to such differences include those
discussed below, as well as those discussed elsewhere herein or in the documents
incorporated by reference herein.

Quarterly Fluctuations in Operating Results; Seasonality

The Company's results of operations have been subject to significant
quarterly fluctuation. The results for a particular quarter may vary due to a
number of factors, including the overall state of the PC and PC communications
markets, pricing and other competitive conditions, the timing of orders, market
acceptance of the Company's or its OEM customers' products, the timing of the
announcement and introduction of new products by the Company and its
competitors, variations in the Company's product mix and component costs,
variations in the proportion of sales made to retailers, distributors and OEMs,
the financial health and inventory levels of the Company's customers, seasonal
promotions by the Company, its customers and competitors, the timing of
expenditures in anticipation of future sales, the timing of product development
costs, the availability of materials and labor necessary to produce the
Company's products, and economic conditions generally. The Company also believes
that its sales will continue to be seasonal, with increased sales generally
occurring in the fourth quarter, reflecting holiday sales. The Company expects
that its quarterly operating results will continue to fluctuate in the future as
a result of these and other factors. Any of these factors could materially
adversely affect the Company's annual results of operations.

Rapid Technological Change

The market for PC communications products has been characterized by rapid
technological change, frequent product introductions, evolving industry
requirements and short product life cycles. The Company believes that these
trends will continue into the foreseeable future. The Company believes that its
future success will depend in large part upon its ability to enhance its
existing products and to successfully develop new products that meet customer
requirements and gain market acceptance. There can be no assurance that the
Company will be successful in developing product enhancements or new products on
a timely basis, if at all, or that the Company will be able to successfully
market these enhancements and new products once developed. Further, there can be
no assurance that the Company's products will not be rendered obsolete by new
industry standards or changing technology. Conversely, the growth of the market
for PC communications products has been driven in part by the rapid
technological change experienced by that market. There can be no assurance that
such rapid technological change will continue or that the telecommunications
infrastructure will be developed to support the high-volume

<PAGE>

adoption of these technologies. Any of these factors could materially adversely
affect the market for PC communications products and the Company's results of
operations.

Competition

The markets for the Company's products are highly competitive, resulting
in constant pricing pressures. Many of the Company's current and potential
competitors have substantially greater resources than the Company. The Company's
primary competitors include Boca Research, Diamond Multimedia, GVC, Global
Village, Hayes Microcomputer Products, Motorola and U.S. Robotics. Competitors
may develop superior products or products of similar quality for sale at the
same or lower prices. Other technical innovations may impair the Company's
ability to market its products. There can be no assurance that the Company will
be able to compete successfully with existing or new competitors. Increased
competition could lead to additional pricing pressures that could adversely
affect the Company's gross margins.

Dependence on Principal Supplier

The Company produces its products using components or subassemblies
purchased from third-party suppliers. Certain of these components are available
only from a single or limited sources. Currently Rockwell International
("Rockwell") is the Company's only modem chipset supplier. Modem chipsets are a
critical component of the Company's products. Due to capacity constraints of
Rockwell, the Company has experienced delays in receiving shipments of chipsets,
and the Company may experience such delays in the future. In addition, the
Company does not have a long-term purchasing arrangement with Rockwell. There
can be no assurance that Rockwell will, in the future, sell chipsets to the
Company in quantities sufficient to meet the Company's needs. An interruption in
Rockwell's ability to deliver chipsets, a failure of Rockwell to produce chipset
enhancements or new chipsets on a timely basis and at competitive prices, a
material increase in the price of Rockwell's chipsets or any other adverse
change in the Company's relationship with Rockwell could have a material adverse
effect on the Company's results of operations. See "Risk Factors -- Inventory
Management."

Customer Concentration

In 1995 and the first quarter of 1996, sales to five customers accounted
for approximately 40% of the Company's net sales, and sales to Best Buy
accounted for approximately 19% and 15%, respectively, of the Company's net
sales. The Company's customers generally do not enter into long-term agreements
obligating them to purchase the Company's products. A reduction or delay in
orders from Best Buy, or a reduction or delay in orders from other significant
customers, or a delay or default in payment any significant customer could have
a material adverse effect on the Company's results of operations.

Dependence on Third-Party Assemblers

The Company uses contract assemblers, primarily located in Mexico and the
Northeast United States, to assemble its products. The Company's relationship
with its Mexican contract assemblers is subject to greater political, legal,
economic and other uncertainties than with contract assemblers located in the
United States. In addition, the Company typically uses only one contract
assembler for a given design. Products approved for sale in certain foreign
countries require the use of a manufacturing facility that has been approved by
the applicable foreign regulatory authority, which limits the number of
facilities available to assemble products for those countries. The failure of a
contract assembler to provide acceptable quality and timely assembly service, or
an interruption of supplies from an assembler as a result of a fire, natural
calamity, strike, or other significant event, could materially and adversely
affect the Company's results of operations.

Inventory Management

As of December 31, 1995 and March 31, 1996 the Company had inventory of
$24.2 million and $23.7 million, respectively, compared to inventory of $9.5
million as of December 31, 1994 and $9.9 million as of March 31, 1995. The
increase in inventory was in part attributable to the accumulation of raw
materials and work-in-process as a result of delays in the delivery of chipsets
from Rockwell. There can be no assurance that the Company will not experience
similar delays or shortages in the future. Increased levels of inventory may
adversely affect the Company's liquidity and increase the risk of inventory
obsolescence, a decline in market value of such inventory, or losses from theft,
fire or other calamities. The failure

<PAGE>

of the Company to effectively manage its inventory levels could materially and
adversely affect the Company's results of operations.

Product Returns and Price Protection

The Company is exposed to the risk of product returns from its customers
as a result of several factors including returns from their customers,
contractual stock rotation privileges, and the Company's practice of assisting
some customers in balancing inventories. Overstocking by the Company's customers
could lead to higher than normal returns, which could have a material adverse
affect on the Company's results of operations. The Company also has a policy of
offering price protection to certain of its customers for some or all of their
inventory, whereby when the Company reduces its prices for a product, the
customer receives a credit for the difference between the original purchase
price of the product and the Company's reduced price for the product. As a
result of this policy, significant reductions in prices have had, and may in the
future have, a material adverse effect on the Company's results of operations.

Sales Channel Risks

The Company sells primarily to retailers, independent distributors and
OEMs. In 1995 and the first quarter of 1996, sales to retailers constituted the
largest percentage of the Company's net sales. Due to competition for limited
shelf space, retailers are in a strong position to negotiate favorable terms of
sale, including price discounts and product return policies. There can be no
assurance that the Company will be able to maintain or increase its sales to
retailers on favorable terms, if at all. The Company also derives a significant
portion of its revenue from sales to national, regional and international
distributors. These independent distributors are not contractually committed to
future purchases of the Company's products, are subject to only limited control
by the Company, and often carry competitors products. As a result, the Company's
distributors could discontinue carrying the Company's products at any time. The
Company believes that its sales of products to OEMs are becoming increasingly
important to the Company's success. OEMs may have significantly different
requirements from retailers and distributors, and often have more stringent
quality standards. OEMs may also require special distribution arrangements and
product pricing. There can be no assurance that the Company will be successful
in developing products for sales to OEMs or maintaining or increasing sales to
OEMs on favorable terms, if at all. Failure of the Company to successfully
develop, manufacture and market its products for any of these sales channels
could have a material adverse effect on the Company's results of operations.

International Sales

In 1995 and the first quarter of 1996, sales outside of the United States
(including sales to OEMs located outside the United States) accounted for
approximately 20% and 23.8%, respectively, of the Company's net sales. The
Company anticipates that international sales will continue to account for a
significant percentage of the Company's net sales. This will result in a
significant portion of the Company's revenues being subject to risks associated
with international sales, including United States and international regulatory
requirements and policy changes, political and economic instability, currency
exchange fluctuations, inventory management, accounts receivable collection, the
management of distributors or representatives, tariff regulations and
seasonality of sales. Most foreign countries have their own telecommunications
standards and regulatory approval requirements for sales of the Company's
products. As a result, the Company's introduction of new products into
international markets can be costly and time consuming, and there can be no
assurance that the Company will not experience delays in obtaining the required
regulatory approvals on a timely basis, if at all. A significant portion of the
Company's international sales are denominated in foreign currencies. The value
of the United States dollar in relation to foreign currencies may adversely
affect the Company's results of operations. The Company has on occasion
attempted to limit its foreign currency exposure by entering into forward
contracts. There can be no assurance that these precautions will be successful,
or that exchange rate fluctuations and other risks associated with international
sales and operations will not have a material adverse effect on the Company's
results of operations.

Management of Growth; Expansion of Production Facilities

The Company has undergone a period of significant growth, and its
expansion may significantly strain the Company's management, financial and other
resources. Due to the level of technical and marketing expertise necessary to
support its existing and new customers, the Company must attract and retain
highly qualified and well-trained personnel. There are a

<PAGE>

limited number of persons with the requisite skills to serve in these positions,
and it may become increasingly difficult for the Company to hire such personnel.
The Company believes that improvements in management and operational controls,
and operational, financial and management information systems are needed to
manage further growth. The Company is currently implementing a new management
information system. There can be no assurance that other improvements will not
be needed. The failure to implement such improvements could have a material
adverse effect upon the Company. In order to accommodate its growth, the Company
believes that it will need to expand its production facilities prior to the end
of 1996. The Company recently entered into a lease for additional space in the
general vicinity of its headquarters suitable for such expansion. The failure of
the Company to successfully move production facilities to such space in a timely
and efficient way could impair the Company's further growth. Zoom is engaged in
discussions with a small number of acquisition candidates and may consider other
potential acquisitions. Any acquisition could present challenges to the
Company's management, such as integrating, incorporating and financing new
operations, product lines, technologies and personnel.

Reliance on Key Employees

The Company's success will depend in large part on the continued services
of its President, Chief Executive Officer and Chairman of the Board, Frank B.
Manning, its Executive Vice President and Director, Peter R. Kramer, and other
key management employees. The loss of one or more key management employees or
the failure to attract and retain additional personnel could have a material
adverse effect on the Company. The Company has key-man life insurance of $2.75
million for Frank Manning and $1.75 million for Peter Kramer.

Dependence on Proprietary Technology

The Company relies on copyrights, trademarks, trade secrets and patents to
protect its proprietary rights. The Company has trademarks and copyrights for
its firmware (software on a chip), printed circuit board designs, instructions,
packaging and literature. The Company also has two patents and three pending
patent applications in the United States. There can be no assurance that any of
the Company's patent applications will be granted, that any patent obtained will
provide protection or be of commercial benefit to the Company, or that the
validity of a patent will not be challenged. Moreover, there can be no assurance
that the Company's means of protecting its proprietary rights will be adequate
or that the Company's competitors will not independently develop comparable or
superior technologies.

The Company has received and may receive in the future infringement claims
from third parties relating to the Company's products and technologies. The
Company investigates the validity of these claims and, if it believes these
claims have merit, responds through licensing or other appropriate actions.
Certain of these claims have related to technology included in Rockwell and
other chipsets. The Company typically forwards these claims to the appropriate
vendor. On March 21, 1996, James A. Storer and REFAC International, Ltd., a
company engaged in the business of acquiring and licensing patents, filed a
complaint in the United States District Court, District of Massachusetts, naming
Hayes Microcomputer Products, Inc. and the Company as defendants in a patent
lawsuit. The complaint alleges that the V.42 bis international
telecommunications standard for data compression in computer modems is covered
by a patent owned by the plaintiffs, and that the defendants' modems that
incorporate this standard infringe the patent. While the complaint seeks to
permanently enjoin the defendants from infringing the patent and monetary
damages for past infringement, REFAC has offered to negotiate a royalty for
licensing the patent. The Company believes that the alleged infringement
involves technology incorporated in chipsets provided to it from Rockwell and
that, if so, the Company will be indemnified by Rockwell. The Company has
forwarded a copy of this complaint to Rockwell for further action. If the
Company or its component manufacturers were unable to license necessary
technology on a cost-effective basis, the Company could be prohibited from
marketing products incorporating that technology, or incur substantial costs in
redesigning products incorporating that technology, or incur substantial costs
defending any legal action taken against it.

Government Regulation

The Company's products require government approvals prior to sale in the
United States and most foreign countries. Gaining approval through the
regulatory process can be time-consuming and may require the expenditure of
substantial resources. In many foreign countries, obtaining required regulatory
approvals may take significantly longer than in the United States. There can be
no assurance that the requisite government approvals will be obtained, and the
failure to receive the

<PAGE>

requisite government approvals in a timely manner could have a material adverse
effect on the Company's results of operations.

Influence by Management

The Company's executive officers and directors beneficially own
approximately 16.37% of the outstanding shares of Common Stock, excluding shares
issuable upon exercise of options. In addition, members of the families of the
Company's executive officers own a substantial number of shares of Common Stock.
As a result, these stockholders, if acting together, will be able to exert
substantial influence over actions requiring stockholder approval, including the
election of directors, amendments to the Company's Articles of Continuance,
mergers, sales of assets or other business acquisitions or dispositions.

Potential Volatility of Stock Price

The market price of the Common Stock has been, and may continue to be,
highly volatile. Factors such as quarterly fluctuations in the Company's results
of operations, the announcement of technological innovations or new products by
the Company or its competitors, general conditions in the PC industry, changes
in financial estimates by securities analysts, and market fluctuations have had
and may continue to have a significant impact on the market price of the Common
Stock. In addition, the financial markets have experienced significant price and
volume fluctuations that have particularly affected the market prices of equity
securities of many high technology companies, and that often have been unrelated
to the operating performance of such companies or have resulted from the failure
of the operating performance of such companies to meet the market expectations
in a particular quarter. Broad market fluctuations or any failure of the
Company's operating results in a particular quarter to meet market expectations
may adversely affect the market price of the Common Stock. In the past,
following periods of volatility in the market price of a company's securities,
securities class action litigation has often been instituted against such a
company. Such litigation could result in substantial costs and a diversion of
management's attention and resources, which would have a material adverse effect
on the Company's operating results and financial condition.

Risks Related to Canadian Incorporation

An investment in Common Stock which results in a change of control of the
Company may be subject to review and approval under the Investment Canada Act
(Canada) (the "ICA"), if the person acquiring control is not a Canadian person;
provided, however, that if the person acquiring control is a national of a World
Trade Organization member country (which includes the United States), then such
investment shall not be subject to review under the ICA so long as the gross
assets of the Company have an aggregate value of less than $160 million
Canadian. This process may have the effect of delaying or preventing the change
in control of the Company. In addition, pursuant to the Canada Business
Corporations Act, not less than one-third of the Company's Board of Directors
and any committees thereof must be resident Canadians (and not less than
one-half if the Company's sales in Canada exceed 5% of net sales).

USE OF PROCEEDS

The proceeds from the sale of the shares Common Stock offered hereby will
be the property of the Selling Stockholder and will be used by it in its
discretion.

SELLING STOCKHOLDER

Tribe Computer Works, Incorporated ("Tribe") is the Selling Stockholder
whose shares of Common Stock are being offered hereby. The Selling Stockholders
is acquiring its shares of the Company's Common Stock as payment of the purchase
price for substantially all of the assets of Tribe, which were sold to the
Company pursuant to the terms of an Assets for Stock Purchase Agreement dated as
of June 13, 1996 (the "Purchase Agreement"), among the Company, a wholly-owned
subsidiary of the Company, Tribe and all of the stockholders of Tribe. The
number of shares of Common Stock to be offered hereby will be based upon the
purchase price to be paid under the Purchase Agreement and the closing price of
the Company's Common Stock as reported on the Nasdaq National Market on the day
prior to closing. The purchase price to be paid under the Purchase Agreement is
subject to adjustment based upon the value of Tribe's inventory and equipment on
the date of closing.

No officer, director or stockholder of Tribe is now or has ever been an
officer or director of the Company.

<PAGE>

The following table sets forth (i) the number of shares of Common Stock
beneficially owned by the Selling Stockholder as of June 14, 1996, (ii) the
maximum number of shares of Common Stock that may be offered by the Selling
Stockholder under this Prospectus, and (iii) the number of shares of Common
Stock to be beneficially owned by the Selling Stockholder if all of the shares
that may be offered hereunder are sold.

<TABLE>
<CAPTION>
Number of Shares Maximum Number of Shares
Beneficial Owned Number of Shares Beneficial Ownership
Name of Beneficial Owner as of June 14, 1996(1)(2) Being Offered(2) After Offering(1)
- ------------------------ ------------------------ ---------------- -----------------
<S> <C> <C> <C>
Tribe Computer Works, 97,747 97,747 0
Incorporated
</TABLE>

- ---------------------
(1) Assumes the sale of all shares of Common Stock registered hereunder.
(2) Subject to adjustment as noted above.

The Company will pay the expenses of registering the shares of Common
Stock hereunder, which are estimated to be $7,615.

PLAN OF DISTRIBUTION

The price and manner of sale of the shares of Common Stock to be offered
hereunder are in the sole discretion of the Selling Stockholder. The shares of
Common Stock offered hereby may be offered through any of several methods, such
as ordinary brokerage transactions or block transactions on the Nasdaq National
Market at market prices, or in privately negotiated transactions at prices
agreed upon by the parties. Neither the Company nor the Selling Stockholder has
any agreement, arrangement or understanding with any broker or dealer entered
into prior to the effective date of the Registration Statement of which this
Prospectus is a part with respect to the sale of the Common Stock offered
hereby.

LEGAL MATTERS

The validity of the securities offered hereby will be passed upon for the
Company and the Selling Stockholder by Thomas, Rondeau, Vancouver, British
Columbia. Certain legal matters in connection with this Prospectus and the
Registration Statement of which this Prospectus is a part will be passed upon
for the Company and the Selling Stockholder by Brown, Rudnick, Freed & Gesmer,
Boston, Massachusetts. A member of Brown, Rudnick, Freed & Gesmer, counsel to
the Company, is the Secretary of the Company.

EXPERTS

The audited financial statements and schedules incorporated by reference
in this Prospectus have been audited by KPMG Peat Marwick LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth an itemized statement of all expenses payable
in connection with the distribution of the shares of Common Stock being
registered hereby. The Selling Stockholder will not pay any of these expenses.
All amounts shown are estimated except the SEC filing fees.

SEC Registration Fee........... $ 615
Accounting Fees and Expenses... 1,000
Legal Fees and Expenses........ 5,000
Miscellaneous.................. 1,000
-----------

TOTAL...................... $ 7,615

Item 15. Indemnification of Directors and Officers

The By-Laws of the Company provide for the indemnification of a director or
officer, a former director or officer, or a person who acts or acted at the
Company's request, as a director or officer of a corporation in which the
Company is or was a shareholder or creditor, against any and all losses and
expenses reasonably incurred by such person in respect of any civil, criminal or
administrative proceeding of the Company or such other corporation if such
person acted honestly and in good faith with a view to the best interests of the
Company, or, in the case of a criminal or administrative action or proceeding
that is enforced by monetary penalty, such person had reasonable grounds in
believing that the conduct was lawful.

The Company has purchased a general liability insurance policy that covers
certain liabilities of directors and officers of the Company arising out of
claims based upon acts or omissions in their capacities as directors or
officers.

Item 16. Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER REFERENCE
- ------ ---------
<S> <C> <C>
3.1 Articles of Continuance .............................................. A

3.2 By-Law No. 1 of the Registrant ....................................... A

3.3 By-Law No. 2 of the Registrant........................................ A

4.1 Specimen Certificate for Shares of Registrant's
Common Stock.......................................................... B

4.2 Description of capital stock (contained in By-Law
No. 1 of the Registrant filed
as Exhibit 3.2).......................................................

5 Legal Opinion of Thomas, Rondeau regarding
legality of Common Stock..............................................

23.1 Consent of Thomas, Rondeau (contained in Exhibit 5)................

<PAGE>

23.2 Consent of KPMG Peat Marwick, LLP.....................................

24 Power of Attorney (contained on page II-3)............................
</TABLE>

- ------------
A. Previously filed as an exhibit of the same number to the Registrant's 1991
Annual Report on Form 10-K and incorporated herein by reference.
B. Previously field as an exhibit of the same number to the Registrant's
Registration Statement on Form S-3 (Registration No. 333-01452) and
incorporated herein by reference.

Item 17. Undertakings

(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the Registrant's By-Laws, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(b) The undersigned Registrant hereby further undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be initial bone fide
offering thereof.

(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it
was declared effective.

(3) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on June 14,
1996.

ZOOM TELEPHONICS, INC.

By: /s/ Frank B. Manning
Frank B. Manning
President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Frank B. Manning and Peter R. Kramer, and each of
them (with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, and, in connection with any
registration of additional securities pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, to sign any abbreviated registration
statement and any and all amendments thereto, and to file the same, with all
exhibits thereto and other documents in connection therewith, in each case, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----
/s/ Frank B. Manning Principal Executive June 14, 1996
Frank B. Manning and Director

/s/ Steven T. Shedd Principal Financial June 14, 1996
Steven T. Shedd Officer

/s/ Peter R. Kramer Director June 14, 1996
Peter R. Kramer

/s/ Bernard Furman Director June 14, 1996
Bernard Furman

/s/ L. Lamont Gordon Director June 14, 1996
L. Lamont Gordon

/s/ J. Ronald Woods Director June 14, 1996
J. Ronald Woods

<PAGE>

EXHIBIT INDEX