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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 26, 2006
GALAXY NUTRITIONAL FOODS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-15345 25-1391475
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(State or other juristidiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2441 Viscount Row
Orlando, Florida 32809
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(Address of Principal Executive Offices) (Zip Code)
(407) 855-5500
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the 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))
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This Report includes forward-looking statements related to Galaxy
Nutritional Foods, Inc. that involve risks and uncertainties, including, but not
limited to, risks and uncertainties relating to the outcome of pending
litigation, and other risks. These forward-looking statements are made in
reliance on the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. For further information about these and other factors that
could affect Galaxy's future results and business plans, please see our filings
with the Securities and Exchange Commission, including in particular our Annual
Report of Form 10-K for the year ended March 31, 2005 and our Quarterly Report
on Form 10-Q for the quarter ended December 31, 2005. Copies of these filings
are available online at http://www.sec.gov. Prospective investors are cautioned
that forward-looking statements are not guarantees of performance. Actual
results may differ materially and adversely from management expectations.
Item 8.01. Other Events
On June 16, 2006, Angelo S. Morini defaulted on his promissory note
obligation to the Company in the amount of $12,772,200 (the "Note"). Mr. Morini
is the founder and a director of the Company. The Note is non-recourse to Mr.
Morini and is secured by a pledge of 2,914,286 shares of our Common Stock (the
"Shares"), which based upon the closing price of our Common Stock on the OTC
Bulletin Board on such date, have an approximate value of $1,224,000. In
accordance with generally accepted accounting principles, as of December 31,
2005, we had already reserved $9,129,343 of the Note as uncollectible. On June
20, 2006, we delivered notice to Mr. Morini that we intended to exercise our
rights to foreclose on the Shares and that, as is permitted by Florida law and
since the Note is non-recourse to Mr. Morini, we intend to retain all the Shares
in satisfaction of the Note. Under Florida law, Mr. Morini has a period of 30
days to object to our retention of the Shares in satisfaction of the Note, in
which event, we may proceed to attempt to sell the shares to qualified bidders
in accordance with applicable law. In the event of such a sale, any proceeds
less the cost of conducting the sale would be applied against the Note. To the
extent we reacquire the Shares and they are not sold, we intend to retire them.
If we retire all the Shares, our issued and outstanding shares of Common Stock
will decrease from 20,054,623 to 17,140,337 shares.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 21, 2006 Galaxy Nutritional Foods, Inc.
By: /s/ Salvatore J. Furnari
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Salvatore J. Furnari
Chief Financial Officer
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