X0303 4 2010-09-03 0 0001052257 Z TRIM HOLDINGS, INC NONE 0001432450 BRIGHTLINE CAPITAL MANAGEMENT, LLC 1120 AVENUE OF THE AMERICAS SUITE 1505 NEW YORK NY 10036 0 0 1 0 0001474772 BRIGHTLINE VENTURES I, LLC 1120 AVENUE OF THE AMERICAS SUITE 1505 NEW YORK NY 10036 0 0 1 0 0001436316 Smith Edward B III C/O BRIGHTLINE CAPITAL MANAGEMENT, LLC 1120 AVE OF THE AMERICAS, SUITE 1505 NEW YORK NY 10036 1 0 1 0 0001475061 KHERA, NICK C/O BRIGHTLINE CAPITAL MANAGEMENT, LLC 1120 AVENUE OF THE AMERICAS, SUITE 1505 NEW YORK NY 10036 0 0 1 0 Series I, 8% Convertible Preferred Stock 1 2010-09-03 4 P 0 60000 A 2010-09-03 2012-09-03 Common Stock, $.00005 par value 300000 216400 I Footnote Common Stock Warrants (right to buy) 1.5 2010-09-03 4 P 0 450000 A 2010-09-03 2015-09-03 Common Stock, $.00005 par value 450000 7341750 I Footnote On September 3, 2010, the Reporting Persons purchased 30 units (the "Units") from Z Trim Holdings, Inc. (the "Issuer") for $10,000 per Unit. Each Unit consists of 2,000 shares of the Series I, 8%, convertible preferred stock, par value $0.01 per share (the "Preferred Stock") and one five-year warrant to immediately purchase 15,000 shares of common stock, $.00005 par value of the Issuer (the "Common Stock") at an exercise price of $1.50 per share. The Preferred Stock is convertible at the rate of $1.00 per share into Common Stock. The securities are held in the account of Brightline Ventures I, LLC and may be deemed to be beneficially owned by (a) Brightline Capital Management, LLC, the investment manager of Brightline Ventures I, LLC, (b) Edward B Smith III, a managing member of Brightline Capital Management, LLC and (c) Nick Khera, a managing member of Brightline Capital Management, LLC. (+) The Reporting Person disclaims beneficial ownership of these reported securities except to the extent of his pecuniary interest therein, and this report shall not be deemed an admission that the Reporting Person is the beneficial owner of these securities for purposes of Section 16 of the U.S. Securities Exchange Act of 1934, as amended, or for any other purpose. Brightline Capital Management, LLC(+), By: /s/ Nick Khera, Managing Member 2010-09-08 Brightline Ventures I, LLC(+), By: Brightline GP, LLC, its Managing Member, By: /s/ Nick Khera, Managing Member 2010-09-08 /s/ Edward B. Smith, III(+) 2010-09-08 /s/ Nick Khera(+) 2010-09-08