X0306 4 2015-01-08 0 0001052257 Z TRIM HOLDINGS, INC ZTHO 0001436316 Smith Edward B III C/O ARISTAR CAPITAL MANAGEMENT, LLC 1120 AVE OF THE AMERICAS, SUITE 1514 NEW YORK NY 10036 1 1 1 0 Chief Executive Officer Convertible Note 2015-01-08 4 J 0 19000 D 2014-04-30 2016-04-30 See footnote 19000 0 D Convertible Note 2015-01-08 4 J 0 264000 D 2014-11-06 2016-08-06 See footnote 264000 0 D Convertible Preferred Stock 2015-01-08 4 J 0 71211 A 2015-01-08 2018-01-08 Common Stock 813839 71211 D Warrant 0.64 2015-01-08 4 J 0 609566 A 2015-01-08 2020-01-08 Common Stock 609566 609566 D Warrant 0.64 2015-01-08 4 J 0 259208 A 2015-01-08 2020-01-08 Common Stock 259208 259208 D Mr. Smith exchanged two previously reported convertible notes (one with a principal amount of $264,000 and one with a principal amount of $19,000 together with accrued interest of $1,844) (together, the "Notes") in the aggregate amount (principal and interest) of $284,844 for 71,211 units (the "Units"), with each Unit consisting of one (1) share of 12.5% redeemable convertible preferred stock (the "Preferred Stock") and one (1) warrant to acquire 8.56 shares (the "Initial Warrants") of Z Trim Holdings, Inc. (the "Company") common stock, par value $0.00005 per share (the "Common Stock") at an exercise price of $0.64 per share of Common Stock. Mr. Smith received one (1) Unit for every $4.00 of debt exchanged. Mr. Smith was issued an additional warrant (the "Additional Warrants") exercisable to acquire an aggregate of 259,208 shares of Common Stock at an exercise price of $0.64 per share. In connection with the acquisition of the Units, Mr. Smith acquired an aggregate of (1) 71,211 shares of Preferred Stock, (2) 609,566 Initial Warrants and (3) 259,208 Additional Warrants. The Initial Warrants and Additional Warrants are subject to certain anti-dilution and other adjustments. Each share of Preferred Stock (together with any accrued but unpaid dividends thereon) is convertible into shares of Common Stock at the option of the holder at any time at a conversion price per share equal to the sum of the stated value ($4.00 per share) and any accrued but unpaid dividends thereon through the date of redemption divided by the conversion price, which will initially be $0.35 per share of Preferred Stock, subject to certain anti-dilution and other adjustments. /s/ Edward B. Smith III 2015-01-12