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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                     ______________________________________

                                   FORM 10-K/A

(Mark One)
|X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                     For the fiscal year ended July 31, 2001

                                       or

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                        For the transition period from         to

                        Commission File Number 000-26399

                         eOn Communications Corporation
             (Exact name of registrant as specified in its charter)

                  DELAWARE                         62-1482176
          (State of incorporation)      (I.R.S. Employer Identification No.)

             4105 Royal Drive NW, Suite 100, Kennesaw, Georgia 30144
                    (Address of principal executive offices)

                                 (770) 423-2200
                               (Telephone number)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, $0.001 par value per share
                              (Title of each class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [_]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The aggregate market value of the shares of common stock held by
non-affiliates of the registrant was approximately $5,053,000 based upon the
closing sale price as reported by the Nasdaq Stock Market on September 28, 2001.
The number of outstanding shares of the registrant's $0.001 par value common
stock was 11,980,297 shares as of that date.

     This form 10-K/A amends the Company's Form 10-K filed on October 29, 2001
to correct the quarterly financial data table for fiscal year 2001.
Specifically, the `loss before discontinued operations and extraordinary item"
was incorrect for the first, second, and third quarters of fiscal 2001.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Certain portions of the registrant's Proxy Statement for the 2001 Annual
Meeting of Shareholders are incorporated by reference in Part III.

================================================================================

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

OVERVIEW

     We design, develop and market next-generation communications servers and
software which integrate and manage voice, email and Internet communications for
customer contact centers and other applications. We also offer a traditional
voice-switching platform for small and medium-sized installations.

     We recognize revenues from our eQueue communications server products upon
completion of installation when they are sold directly to end users due to the
customized nature of each installation. We recognize revenues upon shipment for
products shipped to dealers and for our Millennium products sold to end-users.

     Net revenues in quarters ending January 31 usually decline from the
previous quarter, reflecting seasonal factors that affect some of our customers.
U.S. government customers typically make substantial purchases during the
quarters ending October 31, the last quarter of the government's fiscal year,
and these purchases decline significantly in the following quarter. Customers in
such markets as contact centers, education, and retail also have seasonal buying
patterns and do not purchase substantial amounts of equipment during the
quarters ending January 31.

RESULTS OF OPERATIONS

     The following table presents our operating ratios for fiscal years 2001,
2000, and 1999:

<TABLE>
<CAPTION>
                                                                                Year Ended July 31,
                                                                       -------------------------------------
                                                                         2001          2000          1999
                                                                       ---------     ---------     ---------
<S>                                                                    <C>           <C>           <C>
Net revenues......................................................        100.0%        100.0%        100.0%
Cost of revenues .................................................         45.1%         47.1%         50.4%
Special charges ..................................................          9.8%          0.0%          0.0%
                                                                       --------      --------      --------
Gross margin .....................................................         45.1%         52.9%         49.6%
Operating expenses:
  Selling, general, and administrative ...........................         71.2%         51.4%         35.1%
  Research and development .......................................         21.5%         13.2%          8.6%
  Amortization of goodwill .......................................          2.9%          2.0%          0.7%
  Special charges ................................................         23.4%          0.0%          0.0%
                                                                       --------      --------      --------
Total operating expenses .........................................        119.0%         66.6%         44.4%
                                                                       --------      --------      --------
Income (loss) from operations ....................................        (73.9%)       (13.7%)         5.2%
Interest (income) expense, net ...................................         (3.9%)        (1.8%)         1.6%
Other (income) expense, net ......................................          1.1%          3.3%          0.0%
                                                                       --------      --------      --------
Income (loss) from continuing operations before
     income taxes ................................................        (71.1%)       (15.2%)         3.6%
Income tax expense (benefit) .....................................         (0.2%)        (4.0%)         0.0%
                                                                       --------      --------      --------
Income (loss) before discontinued operations and
     extraordinary item ..........................................        (70.9%)       (11.2%)         3.6%

Income (loss) from discontinued operations, net of tax ...........         (3.2%)         1.7%          4.3%
Extraordinary loss from early extinguishment of debt,
     net of tax ..................................................          0.0%         (0.6%)         0.0%
                                                                       --------      --------      --------
Net income (loss) ................................................        (74.1%)       (10.1%)         7.9%
                                                                       ========      ========      ========
</TABLE>

<PAGE>

The following discussion provides information about the Company's continuing
operations, which excludes the results of Cortelco Systems Puerto Rico, Inc.
(see Footnote 3 - Discontinued Operations/Subsequent Events in the notes to the
consolidated financial statements).

NET REVENUES

     Our overall net revenues decreased 32.1% to $20.2 million in fiscal 2001
from $29.7 million in fiscal 2000. The decrease was primarily due to the large
amount of sales in fiscal 2000 that were driven by Year 2000 upgrades and demand
weakness in fiscal 2001. Fiscal 2000 net revenues represented a 9.3% increase
from $27.2 million in fiscal 1999. The increase in 2000 was primarily due to the
addition of the eQueue Multimedia Contact Center product line and additional
Millennium sales volume driven by Year 2000 upgrades.

COST OF REVENUES AND GROSS PROFIT

     Cost of revenues consists primarily of purchases from our contract
manufacturers and other suppliers and costs incurred for final assembly of our
systems. Gross profit decreased 42.1% to $9.1 million for the year ended July
31, 2001 from $15.7 million in fiscal 2000. The decrease was due primarily to
special charges related to our restructuring initiatives (see Special Charges
section below) as well as decreased revenues for both our eQueue and Millennium
products. Fiscal 2000 represented an increase in gross profit of 16.5% from
$13.5 million in fiscal 1999. The increase in gross profit in 2000 was primarily
due to the addition of the higher margin eQueue product line.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE

     Selling, general and administrative expenses were $14.4 million in fiscal
2001, a decrease of 5.9% from $15.3 million in fiscal 2000. Fiscal 2000
represented a 60.1% increase from $9.5 million in fiscal 1999. The decrease in
fiscal 2001 resulted from a decrease in personnel and fixed costs from the
implementation of our restructuring plan (see the Special Charges section
below). The increase in fiscal 2000 was primarily due to the addition of the
eQueue product line, increased marketing expenses, and the hiring of additional
sales and customer service personnel.

RESEARCH AND DEVELOPMENT EXPENSE

     Research and development expenses consist primarily of personnel and
related expenses for our engineering staff. The majority of our research and
development efforts are currently concentrated on enhancements for our eQueue
product line . Research and development expenses increased 10.9% to $4.3 million
in the year ended July 31, 2001 from $3.9 million in fiscal 2000. Fiscal 2000
represented a 67.7% increase from $2.3 million in fiscal 1999. The increases in
both years were primarily due to the hiring of additional engineers and
expansion of facilities dedicated to our R&D efforts.

AMORTIZATION OF GOODWILL

     We recorded $11.7 million of goodwill related to the acquisition of BCS in
April 1999, and are amortizing this amount over a 20-year period. It is
anticipated that goodwill amortization will cease with the adoption of Statement
of Financial Accounting Standard No. 142 - Goodwill and Other Intangible Assets
in fiscal 2002.

SPECIAL CHARGES

     To reduce costs and improve productivity, the Company adopted a
restructuring plan in fiscal 2001. Major components of the plan included
corporate management changes; the relocation and concentration of management and
strategic functions at the Company's headquarters in Atlanta, Georgia; site
closures; outsourcing initiatives for the assembly, repair, and manufacturing of
our products; and workforce reductions of approximately 40%. See Footnote 4 -
Special Charges in the notes to the consolidated financial statements.

<PAGE>

     The following table provides detail about the special charges recorded
during fiscal year 2001and the associated liabilities at July 31, 2001:

<TABLE>
<CAPTION>
                                                                                 July 31, 2001
                              Charges     Expenditures    Other Adjustments    Liability Balance
                            -----------   -------------   ------------------  -------------------
<S>                         <C>           <C>             <C>                 <C>
Inventory charges             $  1,985       $      -         $  (1,985) (1)          $         -
Termination benefits          $  1,222       $   (597)        $       -               $       625
Excess facilities cost           1,968           (363)                -                     1,605
Asset impairments                1,248              -            (1,248) (2)                    -
Relocation costs                   276           (234)                -                        42
                             ---------    -----------     ------------------        -------------
     Total                    $  6,699       $ (1,194)        $  (3,233)              $     2,272
                            ==========    ===========     ==================        =============
</TABLE>

(1) Represents write-down of inventory to net realizable value.
(2) Represents write-off of assets.

     Net workforce reductions under the plan will reduce our employee expense.
The reduction in employee expense began in the second quarter and continued
through the fourth quarter of fiscal 2001. The annual depreciation expense
associated with the impaired assets will not have a significant impact on future
results. The reduction in rent and facility costs from the consolidation of
sites is expected to reduce our expenses by over $0.5 million annually. The
decrease in costs as a result of the restructuring activities outlined above
will primarily impact selling, general and administrative expense, and to a
lesser extent research and development expense. The remaining cash outlays of
$2,272 related to the above restructuring activities are expected to be
completed by the end of fiscal 2002 and will be funded from current cash and
marketable securities.

INTEREST INCOME AND EXPENSE

     We had no interest expense in fiscal 2001. Interest expense decreased 50.8%
to $0.2 million in fiscal 2000 from $0.4 million in fiscal 1999. The decrease in
both years was primarily due to the retirement of all outstanding debt in
February 2000 in connection with our initial public offering.

     Interest income in fiscal 2001 of $0.78 million was relatively unchanged
from $0.76 million in fiscal 2000. We had no interest income in fiscal 1999. The
slight increase in fiscal 2001 was due to the investment of surplus funds for a
full year versus 6 months in the previous year, offset by lower marketable
securities balances and interest rates. The increase in fiscal 2000 was
primarily due to the investment of funds from our initial public offering in
interest-bearing securities.

OTHER INCOME AND EXPENSE, NET

     Other expense was $0.2 million in fiscal 2001, compared to $1.0 million in
fiscal 2000 and $0.02 million in fiscal 1999. Other expense in fiscal 2000
resulted primarily from the recognition of a loss on marketable securities of
$0.8 million from an investment in equity securities of a publicly traded
company.

INCOME TAX EXPENSE (BENEFIT)

     Income tax expense (benefit) was $(0.05) million, $(1.2) million, and
$(0.01) million in fiscal 2001, 2000, and 1999, respectively. The income tax
benefit for fiscal 2001 and 2000 was affected by the carryback of operating
losses to previous periods. Fiscal 1999 income tax benefit was affected by the
utilization of consolidated operating loss carryforwards from previous periods.
See Footnote 13 - Income Taxes of the notes to the consolidated financial
statements.

EXTRAORDINARY LOSS

     We used a portion of the net proceeds from our initial public offering to
repay $6.4 million of outstanding debt in February 2000. In connection with the
repayment of debt, the Company paid pre-payment penalties and wrote off

<PAGE>

deferred financing costs totaling $0.3 million. In fiscal 2000, the Company
recognized an extraordinary loss from the early extinguishment of debt of $0.2
million, net of an income tax benefit of $0.1 million.

LIQUIDITY AND CAPITAL RESOURCES

     Prior to our initial public offering, we funded our operations primarily
through cash generated from operations, periodic borrowings under former
revolving credit facilities, a $3.0 million subordinated convertible note
financing and acquisition financing provided by Alcatel in connection with the
purchase of our business from Alcatel in 1990. In February 2000, we received
$32.8 million, net of underwriting fees, commissions, and offering costs, upon
the issuance of 3,180,000 shares of common stock in our initial public offering.
The net proceeds from the offering were used to retire $2.8 million of
outstanding principal and interest on 8% subordinated notes due in 2002 and $3.6
million of outstanding indebtedness under a revolving credit facility and for
working capital and general corporate purposes. See Footnote 5 - The Offering of
the notes to consolidated financial statements.

     Net cash provided by (used in) operating activities was ($2.5) million,
($8.0) million, and $2.9 million for fiscal 2001, 2000, and 1999, respectively.
The improvement in fiscal 2001 from fiscal 2000 was due primarily to increased
collections of receivables and reductions in inventory levels, offset by higher
net loss. The decrease in fiscal 2000 from fiscal 1999 was due primarily to
lower net income, an increase in inventories, and the reduction in income taxes
payable and increase in income taxes receivable.

     Net cash provided by (used in) investing activities was $5.7 million,
($17.9) million, and $2.4 million for fiscal 2001, 2000, and 1999, respectively.
Cash provided by investing activities in the current year consisted primarily of
sales of short-term available-for-sale securities. Cash used in investing
activities in fiscal 2000 was due primarily to the investment of funds from our
initial public offering in available for sale debt securities, while cash
provided by investing activities in fiscal 1999 resulted primarily from cash
acquired in the acquisition of BCS.

     Net cash provided by (used in) financing activities was ($1.0) million,
$29.0 million, and ($3.5) million for fiscal 2001, 2000, and 1999, respectively.
Cash used in financing activities in fiscal 2001 was primarily due to
repurchases of our common stock. Cash provided by financing activities in fiscal
2000 consisted primarily of the proceeds from our initial public offering,
offset by the early retirement of our outstanding long-term debt and amounts
borrowed under our former revolving credit facilities. Cash used in financing
activities in fiscal 1999 was primarily due to expenditures associated with our
initial public offering and the issuance of a note receivable from our former
parent.

     We believe that our available funds and anticipated cash flows from
operations will satisfy our projected working capital and capital expenditure
requirements at least through fiscal 2002. To the extent that we grow more
rapidly than expected in the future, we may need additional cash to finance our
operating and investing activities.

ADDITIONAL RISK FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS

     The following risk factors and other information contained in this report
should be carefully considered. The risks and uncertainties described below are
not the only ones we face. Additional risks and uncertainties that are not
currently known to us or that we currently deem immaterial also may impair our
business operations. If any of the following risks actually occurs, our
business, financial condition, and operating results could be materially
adversely affected.

     In addition to the other information included in this report, the following
factors should be considered in evaluating our business and future prospects.

Our restructuring plan may not be successful.

     In the second quarter of fiscal year 2001, the Company adopted a
restructuring plan which involved both a reduction in the Company's workforce
and the relocation and concentration of management and certain strategic
functions. The majority of the restructuring actions were completed by July 31,
2001. No assurance can be given that the restructuring will prove to be
successful, that future operating results will improve, or that the completion
of the restructuring will not disrupt the Company's operations. Further, there
can be no assurance that additional reorganization of the Company's operations
will not be required in the future.

<PAGE>

Fluctuations in our quarterly operating results could cause our stock price to
decline.

    Future operating results are likely to fluctuate significantly from quarter
to quarter. Factors that could affect our quarterly operating results include:

 .     delays or difficulties in introducing new products;
 .     increasing expenses without commensurate revenue increases;
 .     variations in the mix of products sold;
 .     variations in the timing or size of orders from our customers;
 .     declining market for traditional private branch exchange (PBX) equipment;
 .     delayed deliveries from suppliers; and
 .     price decreases and other actions by our competitors.

    Our quarterly operating results are also likely to fluctuate due to
seasonal factors. Some of our vertical markets, such as the U.S. government,
educational and retail buyers, follow seasonal buying patterns and do not make
substantial purchases during the quarters ending January 31. Thus, revenues in
the quarters ending January 31 are often lower than in the previous quarters.
Because of these and other factors, our operating results may not meet
expectations in some future quarters, which could cause our stock price to
decline.

We may not successfully introduce new products that are planned for the near
future which could harm our business and financial condition.

    We plan to introduce new products in the near future to serve the evolving
contact center and e-commerce markets. These new products must achieve market
acceptance, maintain technological competitiveness and meet increasing customer
requirements. New products may require long development and testing periods.
Significant delays in the development, release, installation or implementation
of new products could harm our business and financial condition.

Our communications servers and software face intense competition from many
companies that have targeted our markets.

    The competitive arena for our products is changing very rapidly and we face
intense competition in our markets. Well-established companies and many emerging
companies are scrambling to develop products to improve customer service in
e-commerce. While the industry remains fragmented, it is rapidly moving toward
consolidation, driven by both emerging companies' desires to expand product
offerings and resources and established companies' attempts to acquire new
technology and reach new market segments. A number of emerging companies have
completed initial public offerings, while many more remain private. More
established competitors, as well as those emerging companies that have completed
initial public offerings, currently have greater resources and market presence
than we do. Additionally, a number of our current and potential competitors have
recently been acquired by larger companies who seek to enter our markets.

We expect competition to intensify as competitors develop new products,
competitors gain additional financial resources from public offerings, new
competitors enter the market, and companies with complementary products enter
into strategic alliances.

    Our current and potential competitors can be grouped into the following
categories:

 .    contact center vendors, such as Avaya, Nortel Networks, Aspect
     Communications, and Rockwell;
 .    data communication equipment suppliers, such as Cisco Systems,
     3COM, and Sun Microsystems;
 .    email management and web center software
     suppliers, such as eGain, Kana Communications, Live Person, eShare and
     WebLine Communications (acquired by Cisco);
 .    and
 .    voice communications equipment suppliers, such as Nortel Networks, Avaya,
     Mitel, NEC, Toshiba, Panasonic, and Siemens.

<PAGE>

     Many of our current and potential competitors have significantly greater
financial, technical, marketing, customer service and other resources, greater
name and brand recognition and a larger installed customer base than we do.
Therefore, our competitors may be able to respond to new or emerging
technologies and changes faster than we can. They may also be able to devote
greater resources to the development, promotion and sale of their products.

     Actions by our competitors could result in price reductions, reduced
margins and loss of market share, any of which would damage our business. We
cannot assure you that we will be able to compete successfully against these
competitors.

If we cannot expand our indirect sales channel to sell our eQueue products, our
ability to generate revenue would be harmed.

     We sell our eQueue communications servers both directly and indirectly
through dealers and value added resellers that have experience in data as well
as voice communications. We may not be able to expand this new indirect sales
channel. In addition, new distribution partners may devote fewer resources to
marketing and supporting our products than to our competitors' products and
could discontinue selling our products at any time in favor of our competitors'
products or for any other reason.

The lengthy sales cycles of some of our products and the difficulty in
predicting the timing of our sales may cause fluctuations in our quarterly
operating results.

     The uncertainty of our sales cycle makes the timing of sales difficult to
predict and may cause fluctuations in our quarterly operating results. Our sales
cycles generally vary from four to twelve months for our eQueue products and
from one to six months for our Millennium voice switching platform. The purchase
of our products may involve a significant commitment of our customers' time,
personnel, financial, and other resources. We generally recognize revenues on
the date of shipment for Millennium and eQueue systems shipped to dealers and
upon completion of installation for our eQueue systems sold directly to end
users. Also, it is difficult to predict the timing of indirect sales because we
have little control over the selling activities of our dealers and value added
resellers.

     We incur substantial sales and marketing expenses and spend significant
management time before customers place orders with us, if at all. Revenues from
a specific customer may not be recognized in the quarter in which we incur
related sales and marketing expense, which may cause us to miss our revenues or
earnings expectations.

Our products must respond to rapidly changing market needs and integrate with
changing protocols to remain competitive.

     The markets for our products are characterized by rapid technological
change, frequent new product introductions, uncertain product life cycles and
changing customer requirements. If we are not able to rapidly and efficiently
develop new products and improve existing products to meet the changing needs of
our customers and to adopt changing communications standards, our business,
operating results and financial condition would be harmed.

     Key features of our products include integration with standard protocols,
computer telephony integration and automatic call distribution applications and
protocols, operating systems and databases. If our products cannot be integrated
with third-party technologies or if they do not respond to changing market
needs, we could be required to redesign our products. Redesigning any of our
products may require significant resources and could harm our business,
operating results and financial condition.

If we are not able to grow or sustain our Millennium voice switching platform
revenues, our business, operating results and financial condition could be
harmed.

     We may not be able to grow or sustain our Millennium revenues because the
traditional private branch exchange (PBX) market, which accounts for a
substantial portion of our Millennium revenues, is declining. One reason for the
decline of the traditional PBX market is the emergence of voice switching
platforms based on standard PCs. If we are not able to grow or sustain our
Millennium voice switching platform revenues, our business, operating results
and financial condition could be harmed.

<PAGE>

     In addition, a significant portion of Millennium revenues are derived from
dealers and value added resellers who have no obligation to sell our products.
Therefore, dealers and value added resellers could discontinue selling our
products at any time in favor of our competitors' products or for any other
reason. A reduction or loss of orders from our dealers and value added resellers
could harm our business, operating results and financial condition.

Delayed deliveries of components from our single source suppliers or third-party
manufacturers could reduce our revenues or increase our costs.

     We depend on sole source suppliers for certain components, digital signal
processors and chip sets, and voice processor boards. Interruptions in the
availability of components from our key suppliers could result in delays or
reductions in product shipments, which could damage our customer relationships
and harm our operating results. Finding alternate suppliers or modifying product
designs to use alternative components may cause delays and expenses. Further, a
significant increase in the price of one or more third-party components or
subassemblies could reduce our gross profit.

     We depend upon our primary contract manufacturers ACT Manufacturing, Inc.,
Innovative Circuits, and Clover Electronics. We may not be able to deliver our
products on a timely basis if any of these manufacturers fail to manufacture our
products and deliver them to us on time. In addition, it could be difficult to
engage other manufacturers to build our products. Our business, results of
operations and financial condition could be harmed by any delivery delays.

We may be unable to hire and retain engineering and sales and marketing
personnel necessary to execute our business strategy.

     Competition for highly qualified personnel is intense due to the limited
number of people available with the necessary technical skills, and we may not
be able to attract, assimilate or retain such personnel. If we cannot attract,
hire and retain sufficient qualified personnel, we may not be able to
successfully develop, market and sell new products.

Our business could be harmed if we lose principal members of our management
team.

     We are highly dependent on the continued service of our management team.
The loss of any key member of our management team may substantially disrupt our
business and could harm our business, results of operations and financial
condition. In addition, replacing management personnel could be costly and time
consuming.

We are effectively controlled by our principal stockholders and management,
which may limit your ability to influence stockholder matters.

     As of July 31, 2001, our executive officers, directors and principal
stockholders and their affiliates beneficially owned 4,878,097 shares, or 40% of
the outstanding shares of common stock. Thus, they effectively control us and
direct our affairs, including the election of directors and approval of
significant corporate transactions. This concentration of ownership may have the
effect of delaying, deferring or preventing a change in control of our company
and some transactions may be more difficult or impossible without the support of
these stockholders. The interests of these stockholders may conflict with those
of other stockholders. We also conduct transactions with businesses in which our
principal stockholders maintain interests. We believe that these transactions
have been conducted on an arm's length basis, but we cannot assure you that
these transactions would have the same terms if conducted with unrelated third
parties.

We may not be able to protect our intellectual property, and any intellectual
property litigation could be expensive and time consuming.

     Our business and competitive position could be harmed if we fail to
adequately protect our intellectual property. Although we have filed patent
applications, we are not certain that our patent applications will result in the
issuance of patents, or that any patents issued will provide commercially
significant protection to our technology. In addition, as we grow and gain brand
recognition, our products are more likely to be subjected to infringement
litigation. We

<PAGE>

could incur substantial costs and may have to divert management and technical
resources in order to respond to, defend against, or bring claims related to our
intellectual property rights. In addition, we rely on a combination of patent,
trademark, copyright and trade secret laws and contractual restrictions to
establish and protect our proprietary rights. These statutory and contractual
arrangements may not provide sufficient protection to prevent misappropriation
of our technology or to deter independent third-party development of similar
technologies. Any litigation could result in our expenditure of funds,
management time and resources.

Our products may have undetected faults leading to liability claims, which could
harm our business.

     Our products may contain undetected faults or failures. Any failures of our
products could result in significant losses to our customers, particularly in
mission-critical applications. A failure could also result in product returns
and the loss of, or delay in, market acceptance of our products. In addition,
any failure of our products could result in claims against us. Our purchase
agreements with our customers typically contain provisions designed to limit our
exposure to potential product liability claims. However, the limitation of
liability provisions contained in our purchase agreements may not be effective
as a result of federal, state or local laws or ordinances or unfavorable
judicial decisions in the United States or other countries. We maintain
insurance to protect against certain claims associated with the use of our
products, but our insurance coverage may not adequately cover all possible
claims asserted against us. In addition, even claims that ultimately are
unsuccessful could be expensive to defend and consume management time and
resources.

Our charter contains certain anti-takeover provisions that may discourage
take-over attempts and may reduce our stock price.

     Our board of directors has the authority to issue up to 10,000,000 shares
of preferred stock and to determine the preferences, rights and privileges of
those shares without any further vote or action by the stockholders. The rights
of the holders of common stock may be harmed by the rights of the holders of any
preferred stock that may be issued in the future. Certain provisions of our
certificate of incorporation and bylaws may make it more difficult for a third
party to acquire control of us without the consent of our board of directors,
even if such changes were favored by a majority of the stockholders. These
include provisions that provide for a staggered board of directors, prohibit
stockholders from taking action by written consent and restrict the ability of
stockholders to call special meetings.

Future sales of shares may decrease our stock price.

     Sales of substantial amounts of our common stock in the public market after
our initial public offering, including shares issued upon the exercise of
outstanding options, or the perception that such sales could occur, could reduce
the market price of our common stock. These sales also might make it more
difficult for us to raise funds through future offerings of common stock.

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations" and Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
SFAS No. 141 requires that all business combinations be accounted for under the
purchase method only and that certain acquired intangible assets in a business
combination initiated after June 30, 2001 be recognized as assets apart from
goodwill. SFAS No. 142 requires that ratable amortization of goodwill be
replaced with periodic tests of the goodwill's impairment and that intangible
assets other than goodwill should be amortized over their useful lives.
Management has determined that the adoption of SFAS No. 141 will not have a
material impact on our results of operations. Management plans to adopt SFAS No.
142 effective August 1, 2001, and is currently evaluating the impact that
adoption will have on our results of operations. Goodwill amortization for
fiscal year 2001 approximated $586,000.

     In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirment of tangible long-lived
assets and the associated retirement costs. The adoption of SFAS No. 143 is
effective for the Company in the first quarter of fiscal year 2003. The Company
does not expect the adoption of SFAS No. 143 to have a significant impact on the
Company's future results of operations or financial position.

     In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes previous
guidance for financial accounting and reporting for the impairment or disposal
of long-lived assets and for segments of a business to be disposed of. The
adoption of SFAS No. 144 is effective for the Company in the first quarter of
fiscal 2003. The Company is currently assessing the impact of SFAS No. 144 on
its results of operations and financial position.

     In June 1998, the FASB issued SFAS No .133, Accounting for Derivative
Instruments and Hedging Activities. This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
balance sheet measured at fair value. The adoption of SFAS No. 133 on August 1,
2000 did not have a material impact on the Company's results of operations or
financial position.

QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data for the years ended July 31, 2001 and 2000 is
summarized as follows:

<TABLE>
<CAPTION>
2001                                                  First        Second         Third        Fourth
                                                     Quarter       Quarter       Quarter      Quarter(3)
                                                     -------       -------       -------      ---------
                                                                        (In thousands)
<S>                                                  <C>           <C>           <C>          <C>
Net revenues (1).............................        $ 6,312       $ 4,010       $ 4,863      $ 4,999
Gross profit (1).............................          3,420         1,151         2,787        1,730
Income (loss) before discontinued operations
 and extraordinary item (1)..................         (1,198)       (5,308)       (1,230)      (6,582)
Net income (loss)............................         (1,157)       (6,293)       (1,360)      (6,153)

Income (loss) before discontinued operations
 and extraordinary item per common share (1):
   Basic.....................................        $ (0.10)      $ (0.44)      $ (0.10)     $ (0.55)
   Diluted...................................        $ (0.10)      $ (0.44)      $ (0.10)     $ (0.55)
Net income loss per common share:
   Basic.....................................          (0.09)        (0.53)        (0.11)       (0.51)
   Diluted...................................          (0.09)        (0.53)        (0.11)       (0.51)
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
2000                                                       First         Second       Third        Fourth
                                                          Quarter        Quarter     Quarter      Quarter
                                                          -------        -------     -------      -------
                                                                           (In thousands)
<S>                                                       <C>            <C>         <C>          <C>
Net revenues (1)...................................       $   9,891      $   7,275   $   7,032    $   5,507
Gross profit (1)...................................           5,113          3,692       4,133        2,766
Income (loss) before discontinued operations
 and extraordinary item (1)........................             269           (583)     (1,291)      (1,704)
Net income (loss)..................................             335           (373)     (1,571)      (1,390)

Income (loss) before discontinued operations
 and extraordinary item per common share (1):
   Basic (2).......................................       $    0.04      $   (0.08)  $   (0.11)   $   (0.14)
   Diluted (2).....................................       $    0.03      $   (0.08)  $   (0.11)   $   (0.14)
Net income loss per common share:
   Basic (2).......................................            0.04          (0.05)      (0.13)       (0.11)
   Diluted (2).....................................            0.04          (0.05)      (0.13)       (0.11)
</TABLE>

(1)      Represents results from continuing operations; excludes disposition
         of Cortelco Systems Puerto Rico, Inc. (see Footnote 3 of the notes to
         the consolidated financial statements).

(2)      Due to rounding and changes in outstanding shares, the sum of the four
         quarters does not equal the earnings per common share amounts
         calculated for the year.

(3)      The fourth quarter results of operations include special charges of
         $4,500,000 related to a restructuring plan that resulted in the
         write-down of inventory, termination of employees, impairment of
         assets, and accrual of expected costs associated with excess space (see
         Footnote 4 of the notes to the consolidated financial statements.)


<PAGE>

                                        SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

EON COMMUNICATIONS CORPORATION

Date: December 14, 2001                    By /s/ Lanny N. Lambert
                                           ====================================
                                           Lanny N. Lambert, Vice President,
                                           Chief Financial Officer, Secretary
                                           (Principal Financial Officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
         Name                                       Title                                     Date
----------------------------------       -----------------------------------      ------------------------
<S>                                      <C>                                      <C>
/s/ Troy E. Lynch                         President, Chief Executive                     December 14, 2001
=================                         Officer (Principal Executive
Troy E. Lynch                             Officer)
/s/ Lanny N. Lambert                      Vice President, Chief Financial                December 14, 2001
====================                      Officer, Secretary (Principal
Lanny N. Lambert                          Financial Officer)


/s/ Thomas G. Bevan                       Vice President, Chief Marketing                December 14, 2001
===================
Thomas G. Bevan                           Officer

/s/ David S. Lee                          Chairman                                       December 14, 2001
================
David S. Lee

/s/ Stephen R. Bowling                    Director                                       December 14, 2001
======================
Stephen R. Bowling

/s/ Robert P. Dilworth                    Director                                       December 14, 2001
======================
Robert P. Dilworth

/s/ W. Frank King                         Director                                       December 14, 2001
=================
W. Frank King

/s/ Jenny Hsui Theleen                    Director                                       December 14, 2001
======================
Jenny Hsui Theleen
</TABLE>