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: April 5, 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 2.03 Creation of a Direct Financial Obligation.
Effective April 5, 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, an
amendment to that certain Securities Purchase Agreement and Term Notes
previously agreed January 19, 2007, 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 an amendment to that certain
Security Pledge and Guaranty Agreement entered and associated with the
referenced Securities Purchase Agreement and Term Notes entered on January 19,
2007, 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 an increase to $8.0 million from the previous $6.5 million of
secured financing from the referenced Purchasers, proceeds of which Synergy
Brands Inc., has utilized 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 in total principal, as amended, consists of $7.9
million in secured term notes to be amortized over a 10 year period at an
interest rate of 11.75%, increase of .5% from previous loan as amended, as
provided in the relevant agreements. This supplemental financing has no equity
component and no shares were issued in connection with the amendment. 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 9.01 Exhibits.
Exhibit 10 (without schedules and exhibits) First Amendment to 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
April 5, 2007.
Exhibit 10.1 (without schedules and exhibits) First Amendment to Security
Pledge and Guaranty Agreement by and among PHS Group Inc., a Pennsylvania
corporation, Synergy Brands Inc., a Delaware 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 April 5, 2007.
Exhibit 10.2 Term Note dated April 5, 2007 between PHS Group Inc., and
Lloyd I. Miller III in the amount of $3,945,833.34.
Exhibit 10.3 Term Note dated April 5, 2007 between PHS Group Inc., and
Milfam I L.P. in the amount of $3,945,833.34.
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: April 9, 2007