SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549-1004
______________________
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):
May
10, 2006
Porta
Systems Corp.
(Exact
name of registrant as specified in its charter)
Commission
File Number: 1-8191
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
11-2203988
(IRS
Employer Identification No.)
|
| |
|
|
6851
Jericho Turnpike, Syosset, New York
(Address
of principal executive offices)
|
11791
(Zip
Code)
|
516-364-9300
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
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:
[
]
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))
Item
1.01 Entry
into a Material Definitive Agreement
On
May
10, 2006, the Company entered into an agreement with SHF IX, LLC, which amended
its Amended and Restated Loan and Security Agreement, dated as of
November 28, 1994, as amended, to extend the maturity of the Company’s
senior debt to September 30, 2006, subject to the Company’s attaining certain
milestones discussed in the following paragraph. The agreement provides for
monthly payments of $112,500 on account of the senior debt. The extension also
provides for the Company to pay the legal expenses of the senior lender’s
counsel. As part of the extension, the senior debt holder agreed to continue
the
current deferral of interest on senior debt.
As
a
condition to the extension, the Company agreed to continue to take steps to
effect a restructure of the senior debt in a manner which results in the payment
of a significant portion of the senior debt and the issuance of secured debt
and
equity for the balance of the senior debt on specified terms. The agreement
requires that the Company meet certain milestones that are directed at effecting
such a restructure, and the extension of the maturity is conditioned upon the
Company meeting the milestones. If the Company does not meet the milestones,
the
holder of the senior debt has the right to accelerate the maturity
date.
Any
such
restructure will require the Company to obtain financing from a new investor.
As
previously announced, the Company has retained an investment banker and is
actively seeking such an investor, although the Company cannot give any
assurance that it will be able to obtain an investor on terms that are
acceptable to the holder of the senior debt. In the event that the Company
is
successful in negotiating an agreement with an investor, it is likely that
the
Company will be required to issue a significant number of shares of common
stock
or convertible securities which would result in very significant dilution to
the
Company’s present stockholders. However, the Company cannot give any assurance
that any such restructure will be consummated outside of a bankruptcy
reorganization.
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.
Porta
Systems Corp.
Date:
May
16, 2006 By:
/s/Edward
B. Kornfeld
Edward
B.
Kornfeld
Chief Executive Officer
Chief Financial Officer