SEC FORM 3

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*

Smith Edward B III

(Last)

(First)

(Middle)

C/O BRIGHTLINE CAPITAL MANAGEMENT, LLC

1120 AVE OF THE AMERICAS, SUITE 1505

(Street)

NEW YORK

10036

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
07/24/2009

3. Issuer Name and Ticker or Trading Symbol
Z TRIM HOLDINGS, INC [ ZTHO.OB ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	40,000	D

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
8% Convertible Senior Secured Note due 2011	⁽¹⁾	07/14/2011	Common Stock	110,000	$1	D
Common Stock Warrants (right to buy)	⁽¹⁾	07/14/2014	Common Stock	165,000	$1.5	D

Explanation of Responses:

1. These securities are included within 11 Units purchased from Z Trim Holdings, Inc. (the "Issuer") by Edward B. Smith, III (the "Reporting Person") for $10,000 per Unit. Each Unit consists of (i) a $10,000 24-month senior secured promissory note, bearing interest at the rate of 8% per annum and immediately convertible at the rate of $1.00 per share into 10,000 shares of common stock of the Issuer (the "Common Stock") and (ii) one five-year warrant to immediately purchase 15,000 shares of Common Stock per Unit at an exercise price of $1.50 per share.

	/s/ Edward B. Smith, III	10/26/2009
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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