New Issue: Z-Trim secures $1.4 million from sale of convertibles

By Devika Patel

Knoxville, Tenn., June 24 - Z-Trim Holdings Inc. settled a $1.4 million private placement of convertible promissory notes on June 18, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The company sold the notes in units. The units each consist of a $100,000 two-year senior secured promissory note and two five-year warrants. Z-Trim sold 14 units at $100,000 per unit.

The notes have an 8% coupon. Interest is payable quarterly. Each note is convertible at $0.26 per share into 384,615 shares.

Of the two warrants in each unit, one is exercisable for 230,769 common shares, at $0.01 per share, and the other is for 153,846 shares, exercisable at $0.26.

Mundelein, Ill.-based Z-Trim's principal product is a U.S. Department of Agriculture-developed, natural, zero-calorie functional food ingredient made from dietary fiber.

Issuer:	Z-Trim Holdings Inc.
Issue:	Units of a $100,000 senior secured promissory note and two warrants.
Amount:	$1.4 million
Units:	14
Price:	$100,000
Warrants:	Two warrants per unit, one for 230,769 shares, the other for 153,846 shares
Warrant expiration:	Five years
Warrant strike price:	$0.01 (the 230,769-share warrant), $0.26 (the 153,846-share warrant)
Settlement date:	June 18
Stock symbol:	Amex: ZTM
Stock price:	$0.26 at close June 18
Notes
Maturity:	June 18, 2010
Coupon:	8%
Price:	Par of $100,000
Yield:	8%
Conversion price:	$0.26
Conversion ratio:	Into 384,615 shares

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