MUNDELEIN, Ill., Nov. 1 /PRNewswire-FirstCall/ -- Z Trim Holdings, Inc. (Amex: ZTM), reported today that it has filed a Current Report on Form 8-K with the Securities Exchange Commission ("SEC") disclosing that it will restate certain financial statements as a result of a determination by Z Trim that those financial statements should no longer be relied upon. Specifically, the Company determined that its financial statements for the quarters ended March 31, 2007 and June 30, 2007 should no longer be relied upon because of accounting errors in those financial statements relating to specific equity transactions.
Steve Cohen, Z Trim's President, stated, "Restating these financial statements is a positive step toward correcting our current deficiencies with the American Stock Exchange and fulfilling our commitment to our shareholders to improve company performance."
Background of Restatement.
On November 22, 2004, the Company entered into a two-year engagement with David Shemesh and Mordechai Tobian for investor relations services in consideration of 2,250,000 shares of restricted common stock of the Company (the "Shemesh/Tobian Shares") and a warrant to purchase 275,000 shares of restricted common stock at $.80 per share through November 21, 2007. Based on a closing price of the Company's common stock of $.79 on November 22, 2004, the Company recorded paid-in-capital of $1,777,500 as of that date and began to recognize investor relation expenses on a quarterly basis over the life of the two-year contract.
On August 24, 2005, the Company took the position that Shemesh and
Tobian had failed to perform as agreed and the Company rescinded the
contract. Simultaneously, the Company placed a stop order on
|SOURCE Z Trim Holdings, Inc.|
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