Galaxy Nutritional Foods Company (AMEX: GXY), a leading producer of delicious and nutritious health-promoting dairy and dairy related alternatives for the retail, foodservice and industrial markets, today announced that it has completed the placement of 72,646 shares of convertible preferred stock with BH Capital and Excalibur Capital, Canadian-based investment funds, pursuant to Regulation D of the Securities Act of 1933. Proceeds to the Company from the transaction, totaling $3.1 million, will provide growth capital for inventory, as well as sales and marketing efforts focused on the end consumer.