Letter to Z Trim Shareholders
16 Abril 2008 - 11:00AM
PR Newswire (US)
MUNDELIEN, Ill., April 16 /PRNewswire-FirstCall/ To: Z Trim
Shareholders RE: Investor Update: Q1/08 Dear Fellow Shareholders:
In keeping with our pledge to increase transparency and improve the
effectiveness of communication with our investor community, we are
initiating a series of periodic updates to help keep you informed
about our Company's progress. The Board, management and staff of Z
Trim Holdings, Inc. (Z Trim) (AMEX:ZTM) deeply appreciate your
ongoing faith and support and want you to know that we are working
hard to rebuild this enterprise for sustainable, long term growth.
I use the term "rebuild" to convey the reality of our present
undertaking. While the leadership team believes implicitly in the
extraordinary potential of this Company, both to deliver strong
returns to our shareholders and to improve the health and welfare
of millions of consumers, the fact remains that significant work
will be necessary in order to realize it. With this in mind, I will
spend a little extra space in this inaugural communication to
address some challenges that we have overcome and some that we are
still working on. Future editions will follow a more traditional
format of concise updates on key topics with less introductory
commentary. We take great pride in the progress we have made since
our annual shareholder meeting in December 2007, including: --
Resolution of Amex Deficiency Status -- We stated that priority
number one was to resolve Z Trim's regulatory compliance status
with the American Stock Exchange and in February, were pleased to
announce that Amex had found the Company to be fully compliant with
all listing standards, thereby eliminating a significant impediment
to funding and thus future growth. This was no mean accomplishment
given the breadth of compliance deficiencies with which we were
faced. A number of procedural and internal control improvements are
now in place to ensure that this experience will not be repeated.
-- Enhanced Fiscal Responsibility -- We promised to get more "bang
for the buck" from our shareholders' investment and while this will
remain an ongoing goal and obligation, we have already made
significant progress toward reducing our cost of operations without
sacrificing quality or capacity. We have taken a hard look at every
aspect of our operation and implemented a number of changes
designed to reduce waste and increase efficiency. Specific examples
include identifying less expensive raw materials, changing utility
providers, and strategically reducing our workforce. -- Plant
Optimization -- We committed to find ways to improve our capacity
while lowering our costs and are well on our way to achieving this
critical objective. Dr. Shukla is confident that by utilizing
improved drying technology, we will be able to substantially
increase our pilot plant capacity while simultaneously driving down
unit production costs. We have already begun the process of
re-designing the plant to meet these objectives, with the goal of
completing plant modifications by the third quarter of this year.
-- Capital -- We just filed our 2007 annual report, and although
our financial performance has materially improved, many hurdles
must be surmounted before we achieve success. Principle among these
is the need to raise the money required to fund plant improvements,
strengthen our sales capabilities and sustain our operations until
we reach profitability. Our Board has been devoting extraordinary
time and effort to that task, and we are confident that we will be
able to capitalize our business plan. -- Strategic Planning -- We
have made a series of evolutionary changes to prepare for a
steepening sales cycle in the months ahead. We are in the process
of hiring a new sales manager, with years of specific industry
experience, to work with our existing management team. We have
created a number of internal committees that meet regularly to
ensure that every aspect of our organization is on the same page
with respect to production, financing, marketing and money
management issues. No material expenditures will be made without
thoroughly considering all alternatives and reaching consensus on
the best one. Sales and Marketing Update I often receive calls from
shareholders requesting information about the business. My usual
response is either that I am prohibited from providing non-public
information, or bound by non-disclosure agreements regarding the
status of present and prospective business relationships. These are
frustrating but unavoidable facts of small public company life and
while I would like nothing better than to share detailed
information about the many exciting opportunities we are pursuing,
I simply cannot do so. I will, however, take this opportunity to
share some heretofore non-public information. In August of 2007 we
revitalized our marketing strategy and began cultivating
relationships with innovative people who are well-positioned within
the industry to exert influence over the purchasing decisions of
major food companies. For example, we strengthened our relationship
with Chef Eric Carre of Amazing Food Creations, who is a founding
member of the Research Chefs' Association and an industry leader in
the development of innovative foods. Eric has become a champion of
Z Trim, using our ingredients in many of the finished goods he
prepares for major food manufacturers. We also began executing a
strategy of presenting finished food solutions to large food
manufacturing companies. Instead of merely boasting about how well
our products work, we are showing them tangible examples. Our
creative R & D team has been developing our own finished
formulations to demonstrate Z Trim's amazing array of functional
attributes, as well as how great the final products taste. Building
on that strategy, we have brought some finished goods directly to
the marketplace and we continue to tout the benefits of our
products to the food service sector, particularly the schools. A
limited release of our salad dressings and mayonnaise has been
tremendously well-received, and more importantly, has helped us
attract the attention of the major food companies that dominate the
retail and food service spaces. While these experiences bode well,
it is important to understand the nature of the food industry sales
cycle to appreciate our success so far in penetrating the
functional food ingredient market. The sale of even modest amounts
of product to giant food companies involves successfully navigating
a time and labor intensive obstacle course. Some of the obstacles
include convincing decision-makers of the value our unique products
bring, providing technical assistance during extensive internal
testing, and supporting market research to evaluate consumer
preferences and demand. This ponderous decision-making process has
historically taken from several months to several years, but since
the advent of the marketing strategy described above, a number of
major companies have started working with our products at a much
more accelerated pace. Several of these engagements have already
resulted in sales. Stated another way, we have crossed the line
from merely sending out samples for testing to actually selling
product to companies for use in finished goods. We see this as a
promising indication that this new approach will help us to move
large prospective clients more rapidly from initial concept through
development and testing to finished product launch. R & D
Update One of the most exciting and significant recent events is
our development of a new line of food ingredient products that
provide additional functionality and value-added propositions to
the food industry. Under the direction of renowned food scientist
Dr. Triveni Shukla, our R & D team has developed a new product
stream similar in function to certain gum products. Remarkably,
this derives from an improvement to the Z Trim manufacturing
process and is therefore a cost effective means of producing
incremental revenue from the same incoming raw materials. In fact,
this innovation will enable our plant to nearly triple production
capacity of saleable products while driving down the unit cost of
goods sold. We continue to explore additional capabilities and
markets for these products, both individually and in combination
with Z Trim in the form of customized blends and emulsions. We have
already received high-level interest in this new product. The Road
Ahead A number of exciting initiatives are underway and should bear
fruit within the coming months. These include: -- Attending the
Product Innovation Exchange event in Park City, Utah, during April
to meet directly with decision-makers from several multi- national
food companies who have expressed a high level of interest in using
our ingredient solutions in their finished goods. -- Continuing to
work towards a joint venture agreement with the Brazilian company,
Kraki, an industry ingredient leader in South America. -- Hiring a
new VP of Sales. We are excited about our future and remain
dedicated to building a successful and sustainable business. We
continue to improve our technology and diversify our customer base
with the goal of ubiquity in the food industry. Over the last
several months we have taken bold steps toward achieving that goal,
and also toward assuring you, our shareholders, of our absolute
commitment to effective corporate governance and regulatory
compliance. We continue to develop and refine our unique technology
to create a broad range of diverse products that will deliver value
to our customers and thereby our shareholders. We hope you will
stay tuned as we bring you future updates about our successes.
Thanks again for your continued support. Sincerely, Steven Cohen
President and Director Disclosures About Forward-Looking
Statements. This letter contains forward-looking statements within
the safe harbor provisions of the Private Securities Litigation
Report Act of 1995. All statements other than those that are purely
historical are forward-looking statements. Words such as "expect,"
"anticipate," "believe," "estimate," "intend," "plan," "potential"
and similar expressions also identify forward-looking statements.
Forward-looking statements include statements regarding our
prospects for future sales and production efficiencies. Because
these forward-looking statements involve risks and uncertainties,
there are important factors that could cause our actual results, as
well as our expectations regarding materiality or significance, to
differ materially from those in the forward-looking statements.
These factors include the risks that we may not gain significant
market acceptance for our products, that our plant currently
operates at a loss, and that we face significant competition. For a
discussion of a variety of risk factors affecting our business and
prospects, see "Risk Factors" in our Annual Report on Form 10-KSB
for the year ended December 31, 2007. Contact: Angela Strickland of
Z Trim, +1-847-549-6002 DATASOURCE: Z Trim CONTACT: Angela
Strickland of Z Trim, +1-847-549-6002 Web site:
http://www.ztrim.com/
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