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)

June 19, 2006

TRESTLE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-23000	95-4217605
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

199 Technology, # 105 Irvine, California	92618
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (949) 673-1907

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 June 19, 2006, Trestle Holdings, Inc. (“the Company”) entered into a Third Amendment to Loan and Security Agreement (the “Third Amendment”) with Clarient, Inc., a Delaware corporation (“Clarient”), relating to the Loan and Security Agreement entered into between the Company and Clarient as of February 27, 2006 (the “Loan Agreement”). The Third Amendment replaces the maturity date of the loan made by Clarient to the Company pursuant to the Loan Agreement to the first to occur of (a) an Extraordinary Corporate Transaction, (b) the date of acceleration of the Loan by Clarient following an Event of Default, (c) the Outside Date (as such term is defined in the Asset Purchase Agreement dated as of June 19, 2006, by and among the Company, Trestle Acquisition Corp., Clarient and CLRT Acquisition (the “Asset Purchase Agreement”)) or (d) following termination of the Asset Purchase Agreement under circumstances resulting in any accelerated repayment of the “Bridge Notes” pursuant to Section 10.4 of the Asset Purchase Agreement, the date such accelerated repayment is to be made pursuant to Section 10.4 of the Asset Purchase Agreement.

The foregoing as a summary is qualified in its entirety by reference to the copy of the Third Amendment which is attached to this Form 8-K and is incorporated herein by reference. The Company disclaims any obligation to update any forward-looking information set forth in this Form 8-K.

Item 2.03 - CREATION OF A DIRECT FINANCIAL OBLIGATION.

On June 19, 2006 the Company entered into a Third Amendment with Clarient as described in Item 1.01.

Item 9.01. - FINANCIAL STATEMENTS AND EXHIBITS.

(d)   Exhibits

99.1   Third Amendment

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.

	TRESTLE HOLDINGS, INC.
Date: June 23, 2006	By:	/s/ BARRY HALL
		___________________________ Barry Hall
		Title: Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Third Amendment

EX-99.1

Exhibit 99.1

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Third Amendment”), dated as of June 19, 2006, is made by and among CLARIENT, INC., a Delaware corporation (the “Lender”), TRESTLE HOLDINGS, INC., a Delaware corporation (the “Borrower”) and TRESTLE ACQUISITION CORP., a Delaware corporation (“Guarantor”).

RECITALS

A.Borrower, Lender and Guarantor are parties to that certain Loan and Security Agreement, dated as of February 27, 2006, pursuant to which Borrower borrowed the sum of Two Hundred Fifty Thousand Dollars ($250,000) from Lender and Guarantor guaranteed Borrower’s obligations thereunder, as amended by that certain First Amendment to Loan and Security Agreement dated as of May 26, 2006 and that certain Second Amendment to Loan and Security Agreement dated as of June 10, 2006 (the “Loan Agreement”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

B.The loan issued pursuant to the Loan Agreement is evidenced by that certain Secured Promissory Note dated February 27, 2006 (the “Note”).

C.Pursuant to Section 10.4 of that certain Asset Purchase Agreement by and among Lender, Borrower, Guarantor and Clarient Acquisition, LLC, dated as of even date herewith (the “Asset Purchase Agreement”), Borrower and Lender again desire to extend the term of the Note and to make such other amendments as provided herein.

Now Therefore, in consideration of the mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I.

Amendment

SECTION 1.1.Maturity Date.

Upon the satisfaction of each of the conditions precedent set forth in Article II of this Third Amendment, Section 1.1 of the Loan Agreement shall be amended to replace the definition of “Maturity Date” with the following:

““Maturity Date”means the first to occur of (a) an Extraordinary Corporate Transaction, (b) the date of acceleration of the Loan by Lender following an Event of Default, (c) the Outside Date (as such term is defined in the Asset Purchase Agreement) or (d) following termination of the Asset Purchase Agreement under circumstances resulting in any accelerated repayment of the “Bridge Notes” pursuant to Section 10.4 of the Asset Purchase Agreement, the date such accelerated repayment is to be made pursuant to Section 10.4 of the Asset Purchase Agreement.”

SECTION 1.2.Definitions.

The following new definitions shall appear in Section 1.1 in their appropriate alphabetical positions:

““Asset Purchase Agreement”means that certain Asset Purchase Agreement by and among Lender, Borrower, Guarantor and Clarient Acquisition, LLC, dated as of June 19, 2006.”

““Second Loan and Security Agreement” means that certain Loan and Security Agreement entered into as of June 19, 2006, by and among Lender, Borrower and Guarantors.”

SECTION 1.3.Permitted Liens.

The definition of “Permitted Liens” shall be modified to include the following:

“(m) The Liens created by the Second Loan and Security Agreement”

SECTION 1.4.Limitation on Indebtedness.

Section 7.3 shall be modified to include the following:

“(d) Indebtedness of each Grantor under the Second Loan and Security Agreement.”

ARTICLE II.

Conditions to Effectiveness of Third Amendment

The effectiveness of this Third Amendment is subject to the satisfaction of the following conditions precedent:

SECTION 2.1.Loan Documents.

Lender must have received this Third Amendment duly executed by Borrower and Guarantor.

SECTION 2.2.No Injunction.

No law or regulation shall prohibit, and no order, judgment or decree of any Governmental Authority shall enjoin, prohibit or restrain, and no litigation shall be pending which in the good faith judgment of Lender would enjoin, prohibit or restrain the making of the Loan or the consummation of the transactions contemplated by this Third Amendment.

SECTION 2.3.No Default or Extraordinary Corporate Transaction.

No event shall have occurred and be continuing that constitutes an Event of Default or a Default or an Extraordinary Corporate Transaction.

SECTION 2.4.Accuracy of Representations and Warranties.

Each of the representations and warranties of Borrower in the Loan Documents and Article III of this Third Amendment shall be true and correct as of the Effective Date as though made on such Effective Date.

ARTICLE III.

Representations and Warranties.

Borrower and Guarantor hereby represent and warrant to Lender as follows:

SECTION 3.1.Representations and Warranties in Loan and Security Agreement.

Each representation and warranty set forth in Article V of the Loan Agreement is hereby restated and affirmed as true and correct as of the date hereof, except to the extent previously fulfilled in accordance with the terms of the Loan Agreement or to the extent relating specifically to the date of the Loan Agreement.

SECTION 3.2.Power and Authority.

Borrower and Guarantor have the power and authority (i) to carry on their business and affairs as now being conducted and as proposed to be conducted, (ii) to execute, deliver and perform each of their obligations arising from this Third Amendment, and (iii) to take all action necessary to consummate the transactions contemplated under this Third Amendment.

SECTION 3.3.Due Authorization.

The execution, delivery and performance by Borrower and Guarantor of this Third Amendment has been duly authorized by all necessary action on the part of Borrower and Guarantor. Such execution, delivery and performance do not require the approval of any shareholders, and do not contravene any organizational document governing Borrower or Guarantor. The execution, delivery and performance by Borrower and Guarantor of this Third Amendment and the Loan Agreement as amended hereby do not contravene any law, rule or regulation or any indenture, lease or written agreement binding on or affecting it and do not result in or require the creation of any Lien (other than pursuant to Section 4 of the Loan Agreement) upon any of Borrower or Guarantor’s property.

SECTION 3.4.Binding and Enforceable.

This Third Amendment and the Loan Agreement as amended hereby are each legal, valid and binding obligations of Borrower and Guarantor enforceable against each of themin accordance with their respective terms, subject to laws generally affecting the enforcement of creditors’ rights.

SECTION 3.5.No Conflict.

The execution, delivery and performance by Borrower and Guarantor of each of this Third Amendment and the Loan Agreement as amended hereby do not and will not conflict with, result in a breach of, or constitute (with or without notice or the lapse of time or both) a default under, any law, rule or regulation or any instrument, lease, indenture, agreement or other contractual obligation issued by Borroweror Guarantor or enforceable against either of them or their property.

ARTICLE IV.

Miscellaneous

SECTION 4.1.Effect; Ratification.

The amendment set forth herein is effective solely for the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to (i) be a consent to any amendment, waiver or modification of any other term or condition of the Loan Agreement or of any other Loan Document, or (ii) prejudice any right or rights that Lender may now have or may have in the future under or in connection with the Loan Agreement or any other Loan Document. Each reference in the Loan Agreement to “this Agreement”, “herein”, “hereof” and words of like import and each reference in the other Loan Documents to the Loan Agreement shall mean the Loan Agreement as amended hereby and any and all amendments, restatements, modifications and/or supplements thereto hereafter in effect, and no specific reference to this Third Amendment shall be required in any communication or notice regarding the Loan Agreement or any of the Loan Documents. This Third Amendment shall be construed in connection with and as part of the Loan Agreement and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Agreement and each other Loan Document, except as herein amended or waived, are hereby ratified and confirmed and shall remain in full force and effect and a default by Borrower in the performance of any covenants and conditions contained in this Third Amendment shall constitute an Event of Default under the Loan Agreement.

SECTION 4.2.Effectiveness.

This Third Amendment shall immediately become effective as of the date first written above upon (i) the receipt by Lender of duly executed counterparts of this Third Amendment from Borrower and Guarantor, and (ii) the satisfaction of each condition precedent contained in Article II hereof.

SECTION 4.3.Severability.

Any provision contained in this Third Amendment that is held to be inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions of this amendment in that jurisdiction or the operation, enforceability or validity of that provision in any other jurisdiction.

SECTION 4.4.Governing Law.

THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.

SECTION 4.5.Execution in Counterparts.

This Third Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

SECTION 4.6.Loan Documents.

This Third Amendment shall constitute a Loan Document.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Loan and Security Agreement to be duly executed as of the date first above written.

Lender:	CLARIENT, INC.
		By: ________________________________ Name:________________________________ Title:________________________________
Borrower:	TRESTLE HOLDINGS, INC.
		By: ________________________________ Name:________________________________ Title:________________________________
Guarantor:	TRESTLE ACQUISITION CORP.
		By: ________________________________ Name:________________________________ Title:________________________________