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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): June 20, 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 (Commission File Number) (IRS Employer
juristidiction 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))
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.
Section 2 Financial Information
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
Pursuant to a Note and Warrant Purchase Agreement dated September 12,
2005, Galaxy Nutritional Foods, Inc. (the Company) received $1,200,000 as a loan
from Mr. Frederick A. DeLuca, a greater than 10% shareholder. In October 2005,
pursuant to several Note and Warrant Purchase Agreements dated September 28,
2005, the Company received a $600,000 loan from Conversion Capital Master, Ltd.,
a $485,200 loan from SRB Greenway Capital (Q.P.), L.P., a $69,600 loan from SRB
Greenway Capital, L.P., and a $45,200 loan from SRB Greenway Offshore Operating
Fund, L.P. The combined total of these loans is $2,400,000. The loans are
evidenced by unsecured promissory notes (the "Notes") held by the
above-referenced parties (the "Note Holders"). The Notes required monthly
interest-only payments at 3% above the bank prime rate of interest per the
Federal Reserve Bank (the "Prime Rate") and matured on June 15, 2006. The
Company received a letter on June 20, 2006, from all of the Note Holders other
than Mr. DeLuca, notifying the Company that its failure to pay the amounts due
and owing on the maturity date constitutes a default under the Notes held by
such Note Holders. Pursuant to the terms of the Notes, if the Company does not
cure a default within 10 days after receipt of a notice of default, it is
obligated to pay interest at the default rate of 8% above the Prime Rate. The
Company does not currently have the liquidity to pay the Notes in accordance
with their original terms and is negotiating with the Note Holders regarding
extending the maturity of the Notes, refinancing the Notes and/or converting all
or a portion of the Notes into equity. There can be no assurance that the
Company will be successful in its negotiations with the Note Holders or that the
terms of any such refinancing or conversions will not result in the issuance, or
potential issuance, of a significant amount of equity securities. In the event
the Company is not successful, any collection actions by the Note Holders could
have a material adverse affect on the liquidity and financial condition of the
Company or its ability to secure additional financing.
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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 26, 2006 Galaxy Nutritional Foods, Inc.
By: /s/ Salvatore J. Furnari
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Salvatore J. Furnari
Chief Financial Officer
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