MUNDELEIN, Ill., June 24 /PRNewswire-FirstCall/ -- Z Trim Holdings, Inc. announced today that on June 18, 2008, the Company entered into private placement subscription agreements pursuant to which the Company sold 14 units consisting of convertible notes and warrants, for an aggregate offering price of $1,400,000. Each of the units (individually, a "Unit" and collectively, the "Units") consists of a $100,000 24-month senior secured promissory note (each a "Note" and collectively the "Notes") convertible at the rate of $0.26 per share into 384,615 shares of Common Stock, $.00005 par value (the "Common Stock"), bearing interest at the rate of 8% per annum, which interest is payable quarterly in Common Stock at the rate of $0.26 per share. Investors of each Unit also received two five-year warrants, one to purchase 230,769 shares of Common Stock with an exercise price of $0.01 per share (the "$0.01 Warrants"), and the other to purchase 153,846 shares of Common Stock with an exercise price of $0.26 per share (the "$0.26 Warrants" and, together with the $0.01 Warrants, collectively the "Warrants"). The Company also entered into registration rights agreements in connection with the private placement pursuant to which the Company has agreed to file with the Securities and Exchange Commission a registration statement covering the resale of the Common Stock underlying the Notes and the Warrants.
The Company paid a placement agent a 13% cash commission in connection with the private placement. The placement agent also received expense reimbursement, a five-year warrant to purchase 2,000,000 shares of Common Stock with an exercise price of $0.01 per share, and a five-year warrant to purchase 96,154 shares of Common Stock for each Unit sold, with an exercise price of $0.26 per share. In addition, the placement agent's warrants carry registration rights that are the same as those afforded to investors in the private placement.
The Company determined that all of the securities sold and issued in the private placement the Company were exempt from registration under the Securities Act of 1933, as amended (the "Act") pursuant to Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the Act. The Company based this determination on the non-public manner in which the Company offered the securities and on the representations of the persons purchasing such securities, which included, in pertinent part, that such persons the Company were "accredited investors" within the meaning of Rule 501 of Regulation D promulgated under the Act, and that such persons the Company were acquiring such securities for investment purposes for their own respective accounts and not as nominees or agents, and not with a view to resale or distribution, and that each such person understood such securities may not be sold or otherwise disposed of without registration under the Act or an applicable exemption therefrom.
The description of the terms of sale of the securities described in this report is qualified in its entirety by reference to the full text of the underlying documents which have been filed as exhibits to this report.
ABOUT Z TRIM(R)
Z Trim, http://www.ztrim.com/, is a natural, functional food ingredient and emulsifier made from the hulls of corn. Because Z Trim is non-caloric, replacement of added fats with Z Trim can achieve up to 80% calorie reduction in many foods without negatively affecting taste or texture, and can substantially reduce harmful trans and saturated fats found in many foods. Z Trim is a versatile product that can serve as a fat replacement or emulsifier with texturization, binding, shaping, suspension, water control and pH balance attributes. Z Trim has wide application in dairy products, dressings, dips, sauces, baked goods, processed meats, snack foods, cookies, pies, cakes, icings, brownies, bars, ice cream, milk shakes and many other foods.
Forward-Looking Statements and Risk Factors
Certain statements in this press release are "forward.looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Z Trim Holdings to be materially different from any future results, performance or achievements expressed or implied by these forward.looking statements. Other factors, which could materially affect such forward.looking statements, can be found in our filings with the Securities and Exchange Commission at http://www.sec.gov/, including risk factors relating to our history of operating losses, lack thus far of significant market acceptance of our products, the fact that the Company may dilute existing shareholders through additional stock issuances, and our reliance on our intellectual property. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward.looking statements and are cautioned not to place undue reliance on such forward.looking statements. The forward.looking statements made herein are only made as of the date of this press release and the Company undertake no obligation to publicly update such forward.looking statements to reflect subsequent events or circumstances.
Contact: Angela Strickland
Voice: 847-549-6002
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