--------------------------------------------------------------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                         ------------------------------

                                    FORM 8-K

                         ------------------------------

                                 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 23, 2006

                         GALAXY NUTRITIONAL FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                       1-15345               25-1391475
--------------------------------  ------------------------   -------------------
        (State or other           (Commission File Number)     (IRS Employer
juristidiction of incorporation)                             Identification No.)

                                2441 Viscount Row
                             Orlando, Florida 32809
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (407) 855-5500
               ---------------------------------------------------
              (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))

--------------------------------------------------------------------------------

<PAGE>

      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 on 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 1.01 Entry into a Material Definitive Agreement.

      The  information  set forth  under Item 2.03 of this Report on Form 8-K is
incorporated herein by reference.

Item 2.03 Creation of a Direct  Financial  Obligation or an Obligation  under an
          Off-Balance Sheet Arrangement of a Registrant.

      On June 23, 2006, Galaxy  Nutritional  Foods, Inc. (the "Company") entered
into  a  Receivables   Purchase   Agreement  with  Systran  Financial   Services
Corporation, an affiliate of Textron Financial Corporation ("Systran"),  whereby
Systran will provide a line of credit to the Company  through  advances  against
certain trade receivable invoices due to the Company (the "Systran Line").

      The Systran Line is secured by the Company's  accounts  receivable and all
other assets.  Generally,  subject to a maximum  principal  amount of $3,500,000
which can be borrowed under the Systran Line, the amount available for borrowing
is equal to 85% of the Company's  eligible accounts  receivable  invoices less a
dilution reserve and any required fixed dollar reserves.  The dilution and fixed
dollar  reserve  have  been  initially  set  at 7% and  $100,000,  respectively.
Advances  under the Systran Line bear  interest at a variable  rate equal to the
prime  rate plus 1.5% per annum  (9.5% on June 23,  2006).  The  Company  paid a
one-time  closing fee of $35,000 and is also  obligated to pay a $1,500  monthly
service fee.

      The initial  term of the Systran  Line ends on June 23, 2009 and may renew
automatically for consecutive  twelve-month  terms unless terminated sooner. The
Systran Line may be accelerated in the event of certain defaults by the Company.
In such an event,  interest  on the  Company's  borrowings  would  accrue at the
greater of twelve  percent per annum or the variable rate of prime plus 1.5% and
the Company would be liable for an early termination  premium ranging from 1% to
3% of the maximum principal amount available under the Systran Line.

      On June 23, 2006,  Systran  advanced  $2,379,262 under the Systran Line of
which $1,839,086 was used to pay in full and terminate the Company's obligations
under  its line of  credit  with  Textron  Financial  Corporation  which  was to
terminate on June 27, 2006.


                                       1
<PAGE>

Item 9.01 Financial Statements and Exhibits

10.30       Receivables Purchase Agreement,  together with Addendum,  dated June
            23,  2006  between  Galaxy   Nutritional  Foods,  Inc.  and  Systran
            Financial Services Corporation (filed herewith).

99.1        Press Release  regarding  Systran  issued by the Company on June 29,
            2006 (filed herewith).

                                       2
<PAGE>

                                   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 29, 2006                    Galaxy Nutritional Foods, Inc.


                                        By: /s/ Salvatore J. Furnari
                                            ------------------------------------
                                            Salvatore J. Furnari
                                            Chief Financial Officer


                                       3
{"company-data": {"conformed-name": "GALAXY NUTRITIONAL FOODS INC", "cik": "0000819527", "assigned-sic": "2020", "irs-number": "251391475", "state-of-incorporation": "DE", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-15345", "film-number": "06933887"}, "business-address": {"street1": "2441 VISCOUNT ROW", "city": "ORLANDO", "state": "FL", "zip": "32809", "phone": "4078555500"}, "mail-address": {"street1": "2441 VISCOUNT ROW", "city": "ORLANDO", "state": "FL", "zip": "32809"}, "former-company": [{"former-conformed-name": "GALAXY FOODS CO", "date-changed": "19920703"}, {"former-conformed-name": "GALAXY CHEESE CO", "date-changed": "19920302"}]}
--------------------------------------------------------------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                         ------------------------------

                                    FORM 8-K

                         ------------------------------

                                 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 23, 2006

                         GALAXY NUTRITIONAL FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                       1-15345               25-1391475
--------------------------------  ------------------------   -------------------
        (State or other           (Commission File Number)     (IRS Employer
juristidiction of incorporation)                             Identification No.)

                                2441 Viscount Row
                             Orlando, Florida 32809
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (407) 855-5500
               ---------------------------------------------------
              (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 on 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 1.01 Entry into a Material Definitive Agreement.

      The  information  set forth  under Item 2.03 of this Report on Form 8-K is
incorporated herein by reference.

Item 2.03 Creation of a Direct  Financial  Obligation or an Obligation  under an
          Off-Balance Sheet Arrangement of a Registrant.

      On June 23, 2006, Galaxy  Nutritional  Foods, Inc. (the "Company") entered
into  a  Receivables   Purchase   Agreement  with  Systran  Financial   Services
Corporation, an affiliate of Textron Financial Corporation ("Systran"),  whereby
Systran will provide a line of credit to the Company  through  advances  against
certain trade receivable invoices due to the Company (the "Systran Line").

      The Systran Line is secured by the Company's  accounts  receivable and all
other assets.  Generally,  subject to a maximum  principal  amount of $3,500,000
which can be borrowed under the Systran Line, the amount available for borrowing
is equal to 85% of the Company's  eligible accounts  receivable  invoices less a
dilution reserve and any required fixed dollar reserves.  The dilution and fixed
dollar  reserve  have  been  initially  set  at 7% and  $100,000,  respectively.
Advances  under the Systran Line bear  interest at a variable  rate equal to the
prime  rate plus 1.5% per annum  (9.5% on June 23,  2006).  The  Company  paid a
one-time  closing fee of $35,000 and is also  obligated to pay a $1,500  monthly
service fee.

      The initial  term of the Systran  Line ends on June 23, 2009 and may renew
automatically for consecutive  twelve-month  terms unless terminated sooner. The
Systran Line may be accelerated in the event of certain defaults by the Company.
In such an event,  interest  on the  Company's  borrowings  would  accrue at the
greater of twelve  percent per annum or the variable rate of prime plus 1.5% and
the Company would be liable for an early termination  premium ranging from 1% to
3% of the maximum principal amount available under the Systran Line.

      On June 23, 2006,  Systran  advanced  $2,379,262 under the Systran Line of
which $1,839,086 was used to pay in full and terminate the Company's obligations
under  its line of  credit  with  Textron  Financial  Corporation  which  was to
terminate on June 27, 2006.

                                       1
Item 9.01 Financial Statements and Exhibits

10.30       Receivables Purchase Agreement,  together with Addendum,  dated June
            23,  2006  between  Galaxy   Nutritional  Foods,  Inc.  and  Systran
            Financial Services Corporation (filed herewith).

99.1        Press Release  regarding  Systran  issued by the Company on June 29,
            2006 (filed herewith).

                                       2
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 29, 2006                    Galaxy Nutritional Foods, Inc.

                                        By: /s/ Salvatore J. Furnari
                                            ------------------------------------
                                            Salvatore J. Furnari
                                            Chief Financial Officer

                                       3