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: May 23, 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 2.01 Completion of Acquisition of Assets
Effective May 18, 2007, Quality Food Brands ("QFB"), a subsidiary of Synergy
Brands Inc. (the "Company")(through ownership by PHS Group Inc.) leased a baking
mix facility from MB Monroe Properties, Inc., a Michigan corporation and
acquired associated assets of Loretta Baking Mix Products Ltd. ("LBMP") a
Michigan corporation through purchase of such assets through foreclosure sale
conducted by Laurus Master Funds, Ltd. (Laurus), a secured creditor of LBMP, as
well as certain intellectual property owned by certain Canadian affiliates of
LBMP currently in bankruptcy in Canada via sale by appointed receiver of such
intellectual property. The aggregate purchase price paid by QFB was $4.75
million. Laurus financed the purchase through issuance by QFB of a 9% secured
term note in the principal amount of $4,750,000. In addition QFB provided Laurus
the right to acquire 30% of the common stock of QFB. The assets acquired provide
QFB with a facility from which to produce baking mix products that could and are
expected to supply existing customers of PHS. The Company has ordered from this
facility in the past through PHS to supply its customers. PHS had been filling
its orders from its customers for baking mix products by acquiring related
products from LBMP. QFB accepted the opportunity to acquire these assets
realizing that at this time the baking mix business product sales by PHS has
grown to a level where it would be advantageous to have a direct manufacturing
capability which would allow PHS to gain better product control, special purpose
packaging and margin enhancement. QFB is now expected to replace LBMP, through
use of the assets previously of LBMP acquired through foreclosure thereon by
Laurus, as the supplier of baking mix products to PHS. PHS expects to continue
to arrange for sale of the finished products to its customers. Neither PHS nor
QFB is acquiring prior customers of LBMP in this asset sale not already supplied
goods through PHS and do not expect to utilize any trademarks and/or tradenames
previously owned and utilized by LBMP. The material assets acquired consist of
baking mix equipment and physical facilities. The manufacturing facility in
Monroe, Michigan previously utilized by LBMP wherein production occurred has
been recently leased by QFB. Operations at such facility are expected to be
commenced and continued utilizing personnel and other assets provided by PHS.
Item 9.01 Exhibits.
Exhibit 10 (without schedules and exhibits) Securities Purchase Agreement
between Quality Food Brands Inc., as Company, Laurus Master Fund Ltd., as
Purchaser dated May 18, 2007.
Exhibit 10.1 Term Note dated May 18, 2007 between Quality Food Brands Inc, and
Laurus Master Fund Ltd.in the amount of $4,750,000.
Exhibit 10.2 Common Stock Warrant dated May 18, 2007 between Quality Food Brands
Inc, and Laurus Master Fund Ltd.
Exhibit 10.3 Common Stock Purchase Warrant dated May 18, 2007 between Quality
Food Brands Inc, and Laurus Master Fund Ltd.
Exhibit 10.4 Bill of Sale between Laurus Master Fund Ltd., as Grantor, Loretta
Baking Mix Products Ltd., as Debtor and Quality Food Brands Inc., as Grantee
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: May 23, 2007