8-K

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): April 2, 2007

Familymeds Group, Inc.

(Exact name of registrant as specified in its charter)

STATE OF NEVADA	1-15445	34-1755390
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

312 Farmington Avenue

Farmington, CT 06032-1968

(Address of principal executive offices)

Registrant’s telephone number, including area code: (860) 676-1222

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 or Disposition of Assets.

As previously disclosed, on February 14, 2007, Familymeds Group, Inc., a Nevada corporation (the “Company”), together with its subsidiaries, Familymeds, Inc. and Arrow Prescription Leasing Corp. (together with the Company, the “Sellers”) entered into a definitive Asset Purchase Agreement (the “Agreement”), with Walgreen Co., and Walgreen Eastern Co., Inc. (together, the “Buyers”). Under the terms of the Agreement, the Sellers are to sell to the Buyers a majority of the Company’s pharmacy assets (the “Assets”) for total estimated consideration of approximately $60 million in cash and assumption of certain real estate leases, subject to adjustment based on closing physical inventory counts. Up to $3,000,000 of the cash proceeds will be placed in escrow for up to one year to satisfy post-closing indemnification obligations of the Sellers, if any.

On March 30, 2007, the Company announced that its shareholders had voted to approve the sale of the Assets to Sellers. The shareholders also voted to approve and adopt a plan of complete liquidation and dissolution of the Company and the transactions contemplated thereby pursuant to which the Company will be dissolved and liquidated.

As previously disclosed, the sale to the Buyers will be completed on a staggered basis. On April 4, 2007, the Company received a portion of the purchase price and began the process of selling its pharmacy assets to Buyers pursuant to the Agreement. The closing of the sale of all of the assets to Buyers is expected to be completed by the end the second quarter of 2007.

Other than the Agreement, there is no material relationship between the Sellers, on the one hand, and the Buyers, on the other hand.

A copy of the press release is attached hereto as Exhibit 99.1.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On April 2, 2007, Rakesh K. Sharma resigned as a director to the company. Dr. Sharma had served as a director and a member of the compensation committee of the board of directors since November 12, 2004. On March 21, 2007, the Compensation Committee met to consider the Company’s severance obligations to certain of its Directors and Officers and determined that it was necessary and appropriate to amend or modify each of those obligations in order to retain critical persons and assure that the sale to the Buyers and the plan of complete liquidation and dissolution are executed in a fashion calculated to maximize return to the Company’s shareholders. The Compensation Committee unanimously recommended to the board of directors a resolution adopting its recommendations and resolving that the obligations of the Company and (as applicable) its subsidiary Familymeds, Inc. as to each of Jugal K. Taneja, Edgardo A. Mercadante, James E. Searson, James A. Bologa, Allison D. Kiene, and James S. Beaumariage, shall be accelerated and payable as of the Walgreen closing date or such other date as agreed by and between the Company and the affected individual on such terms as the Chief Executive Officer or the Chairman of the Compensation Committee deems appropriate. Following his execution of these resolutions on April 2, 2007, Dr. Sharma resigned from the board of directors claiming that his resignation stemmed from his difference of opinion on the compensation matters to maximize shareholder value. A copy of Dr. Sharma’s letter pursuant to which he resigned is attached hereto as Exhibit 99.2.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release dated April 5, 2007

99.2 Letter dated April 2, 2007

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

FAMILYMEDS GROUP, INC.

By: /s/Edgardo A. Mercadante

Edgardo A. Mercadante, Chief Executive

Officer, President and Chairman of the

Board

Dated: April 5, 2007

EXHIBIT INDEX

Exhibit
Number	Exhibit Description
99.1	Press Release dated April 5, 2007
99.2	Letter dated April 2, 2007

EX-99.1

FOR IMMEDIATE RELEASE:

FAMILYMEDS COMMENCES SALE OF PHARMACY ASSETS TO WALGREEN CO.

FARMINGTON, CT, April 5, 2007 -- Familymeds Group, Inc. (OTCBB: FMRX), a specialty pharmacy and medical specialty product provider, today announced that it began selling its pharmacy assets to Walgreen Co. and Walgreen Eastern Co., pursuant to the asset purchase agreement dated February 14, 2007. Familymeds’ shareholders approved the asset sale to Walgreens at its special shareholder meeting held last week at the Company’s Farmington offices.

The asset purchase agreement is for the sale of up to 53 Familymeds locations, operating under the Familymeds and Arrow Pharmacy and Nutrition Center brands to Walgreens. In consideration, Walgreens will pay approximately $60 million for pharmacy assets, customer accounts receivable and inventories for these locations, subject to adjustment based on closing physical inventory counts. The majority of the locations sold will remain open and continue to operate in place; the remainder will have files and business transferred to a nearby Walgreens location. The Company expects to complete the sale to Walgreens during the second quarter of 2007.

Ed Mercadante, Chairman & CEO of Familymeds commented, “Our management team and Walgreens are working together to ensure the smoothest transition possible for our customers without any interruption in service.” Mr. Mercadante further commented, “It has been a pleasure working with Walgreens executives during this process. Walgreens has offered positions to, and welcomed, most of our store associates, ensuring not only a familiar presence to our customers, but also avoiding disruption to our staff during this sale.”

Familymeds also announced today that it has completed several smaller asset deals for certain pharmacy locations, and is continuing in its discussions with other national and regional pharmacy operators to pursue additional opportunities in the coming weeks. The overall plan includes distribution of the proceeds of the Walgreens sale and such other sales to its shareholders following repayment of debt, satisfaction of certain liabilities and associated Company costs.

About Familymeds Group, Inc.

Familymeds Group, Inc. is a pharmacy and medical specialty product provider formed by the merger on November 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc. Familymeds works closely with doctors, patients, managed care providers, medical centers and employers to improve patient outcomes while delivering low cost and effective healthcare solutions. Familymeds now operates 68 locations, including 7 franchised locations, in 13 states under the Familymeds Pharmacy and Arrow Pharmacy & Nutrition Center brand names; most of the locations in New England area operate under the Arrow Pharmacy brand. The Company also operates Worksite Pharmacy(SM), which provides solutions for major employer groups. The Company also operates Familymeds Medical Specialty a specialty pharmaceutical distribution business directly to physicians and other healthcare providers. The overall Familymeds business platform is designed to provide pharmaceutical services for the treatment of acute and complex health diseases including chronic medical conditions such as cancer, diabetes and pain management. More information can be found at http://www.familymedsgroup.com. The Company's online product offering can be found at http://www.familymeds.com.

About Walgreen Company

Walgreen Co. (NYSE, NASDAQ: WAG) is the nation's largest drugstore chain with fiscal 2006 sales of $47.4 billion. The company operates 5,675 stores in 48 states and Puerto Rico, including 76 Happy Harry’s drugstores in Delaware and surrounding states. Walgreens also provides additional services to pharmacy patients and prescription drug and medical plans through Walgreens Health Services, its managed care division, which includes Walgreens Health Initiatives Inc. (a pharmacy benefits manager), Walgreens Mail Service Inc., Walgreens Home Care Inc. and Walgreens Specialty Pharmacy.

Safe Harbor Provisions

Certain oral statements made by management from time to time and certain statements contained in press releases and periodic reports issued by Familymeds Group, Inc., including those contained herein, that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are statements regarding the intent, belief or current expectations, estimates or projections of the Company, its directors or its officers about the Company and the industry in which it operates. Although Familymeds Group, Inc. believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will occur. When used in this report, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and similar expressions are generally intended to identify forward-looking statements. Important factors that could cause the actual results to differ materially from those in the forward-looking statements include, among other items, management's ability to successfully implement additional asset sale, liquidation and dissolution plans, the ability of Familymeds Group, Inc. to comply with its obligations under agreements governing indebtedness or obtain waivers from lenders in the event of non-compliance, the continued availability of liquidity and capital resources required to complete these transactions, particularly in the event that such transactions require more time than management anticipates, and other factors. Familymeds Group, Inc. disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Cindy Berenson, Familymeds Group, Inc.

860.676.1222 x138; berenson@familymeds.com

SOURCE Familymeds Group, Inc.

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EX-99.2