SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report: January 19, 2007
Synergy Brands, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-19409 22-2993066
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
223 UNDERHILL BLVD., SYOSSET, NY 11791
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 1-516-714-8200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K Filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Effective January 19, 2007 Synergy Brands Inc. and its subsidiary PHS Group
Inc., the latter being the designated "Borrower" within such Agreement, entered
with Lloyd I. Miller, III and Milfam I L.P., an entity with whom Mr. Miller is
affiliated, together both being the "Purchaser" within such Agreement, a
Securities Purchase Agreement, and with such same parties as Purchaser, Synergy
Brands Inc. and its subsidiaries PHS Group Inc., SYBR.Com Inc., Gran Reserve
Corporation, DealByNet.Com Inc., Quality Food Brands Inc., NYCE North America
Inc., and NetCigar.Com Inc. entered a Security Pledge and Guaranty Agreement,
copies of such agreements being made exhibits hereto, as well as having executed
other ancillary documentation, the designed purpose of which was to arrange for
$6.5 million of secured financing from the referenced Purchasers, proceeds of
which Synergy Brands Inc., intends to utilize to retire present existing higher
interest debt owed by PHS Group Inc. to IIG Capital LLC and for other general
working capital purposes. The new financing consists of $6.5 million in secured
term notes to be amortized over a 10 year period at an interest rate of 11.25%
that may be reduced to 11% under certain conditions as provided in the relevant
agreements. In connection therewith Synergy Brands Inc. has agreed to issue to
the stated Purchasers in the aggregate 1,075,000 shares of such Company's
unregistered common stock. Lloyd Miller is a director and significant
shareholder of Synergy Brands Inc. The terms and conditions of this financing
and the affiliated loan documentation were negotiated between Mr. Miller and
Synergy Brands Inc and stated subsidiaries at arm's length and all parties were
represented by independent professional advisors in evaluating those terms and
conditions, and all of the material terms and conditions and the related
existence of the transaction being with a related person have been fully
disclosed to the Board of Directors and members of the Audit Committee of
Synergy Brands Inc. and such persons have reviewed those terms and conditions
and have evaluated the merits of the underlying transaction and have determined
in using their reasonable business judgment that such terms and conditions are
in the best interests of the shareholders of the said registrant.
Item 3.02 Unregistered Sales of Equity Securities.
In connection with and as consideration for the financing transaction as
described under Item 1.01 herein supra the registrant has agreed to issue
1,075,000 aggregate shares of its unregistered common stock to the referenced
Purchasers which issuance is exempt from registration as provided by Section
4(2) of the Securities Act of 1933, as amended.
Item 9.01 Exhibits.
Exhibit 10 (without schedules and exhibits) Securities Purchase Agreement
between PHS Group Inc., as Borrower, Synergy Brands Inc., as Parent Company,
Lloyd I. Miller III, and Milfam I L.P., as a Purchaser dated January 19, 2007.
Exhibit 10.1 (without schedules and exhibits) Security Pledge and Guaranty
Agreement by and among PHS Group Inc., a Pennsylvania corporation, Synergy
Brands Inc., a Delawre corporation, SYBR.Com Inc., A New Jersey corporation,
Gran Reserve Corporation, a Florida corporation, Dealbynet.com Inc., a New York
corporation, Quality Food Brands Inc., a Nevada corporation, NYCE North America,
a New Jersey corporation, Net Cigar.Com Inc., and Lloyd I. Miller III and Milfam
I L.P. dated January 19, 2007.
Exhibit 10.2 Term Note dated January 19, 2007 between PHS Group Inc., and
Lloyd I. Miller III in the amount of $3,250,000.
Exhibit 10.3 Term Note dated January 19, 2007 between PHS Group Inc., and
Milfam I L.P. in the amount of $3,250,000.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Synergy Brands, Inc.
By: /s/ Mair Faibish
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Mair Faibish
Chairman of the Board
By: /s/ Mitchell Gerstein
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Mitchell Gerstein
Chief Financial Officer
Dated: January 19, 2007