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):
December
27, 2005
Porta
Systems Corp.
(Exact
name of registrant as specified in its charter)
Commission
File Number: 1-8191
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Delaware
(State
or other jurisdiction of
incorporation
or organization)
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11-2203988
(IRS
Employer Identification No.)
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6851
Jericho Turnpike, Syosset, New York
(Address
of principal executive offices)
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11791
(Zip
Code)
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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
December 27, 2005, 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 January 31, 2006. The agreement provides for payments to SHF
IX
of $25,000 on December 27, 2005, which has been made, as a credit against
expenses, and payments of $112,500 on each of December 30, 2005, which has
been
made, and January 31, 2006 on account of the Company’s senior debt. As part of
the extension, SHF IX agreed to continue the current deferral of interest on
senior debt. SHF IX is the successor to the Company’s former senior lender,
Wells Fargo Foothill, Inc.
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
contemplates that the Company will meet certain milestones that are directed
at
effecting such a restructure.
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 SHF IX. 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.
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.
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Porta Systems Corp. |
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Date:
January 5, 2006
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By:
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/s/ Edward B. Kornfeld
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Edward B. Kornfeld
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President,
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Chief Operating Officer and
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Chief Financial Officer
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