Offering is to finance working capital and general corporate purposes
By Toni Weeks
San Luis Obispo, Calif., Feb. 9 – Z Trim Holdings, Inc. raised $500,000 in the second tranche of a private placement of units on Feb. 9, according to an 8-K filing with the Securities and Exchange Commission.
The company sold 125,000 units at $4.00 each, each one consisting of one share of 12.5% redeemable convertible preferred stock and one warrant to acquire 8.56 common shares.
Investors also received additional warrants for 455,000 shares.
In the first tranche, the company raised $1.04 million by selling 260,000 units, also at $4.00 per unit. Investors also received 946,400 additional warrants.
Each preferred converts to common stock at an initial conversion price of $0.35 per share.
Each warrant is exercisable at $0.64 for five years.
The strike price of each warrant is a 72.97% premium to the Jan. 7 closing share price of $0.37. The conversion price is a 5.41% discount to that price.
Proceeds will be used for working capital and general corporate purposes.
Z Trim is based in Mundelein, Ill., and makes Z Trim, a food ingredient made from the hulls of corn that is used as a fat replacement or emulsifier.
| Issuer: | Z Trim Holdings, Inc.
|
| Issue: | Units of one redeemable convertible preferred share and a warrant for 8.56 common shares, 1,401,400 additional warrants
|
| Amount: | $1.54 million
|
| Units: | 385,000
|
| Price: | $4.00
|
| Dividends: | 12.5%
|
| Conversion price: | $0.35
|
| Warrants: | One warrant exercisable for 8.56 shares per unit, plus 946,400 additional warrants in first tranche and 455,000 additional warrants in second tranche
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.64
|
| Settlement dates: | Jan. 8 (for $1.04 million); Feb. 9 (for $500,000)
|
| Stock symbol: | OTCBB: ZTHO
|
| Stock price: | $0.37 at close Jan. 7
|
| Market capitalization: | $15.1 million
|
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