U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB/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, 2008
|- | ----------------------------------------------------------------------------------------------------------------------------



| ̈ | 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.)

185 Martinvale Lane, San Jose, CA 95119

(Address of principal executive offices)

(408) 694-9500

(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, $0.005 par value per share

(Title of each class)

Check whether the issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act     ̈

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-KSB or any amendment to this Form 10-KSB.    x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

The revenues for the year ended July 31,
2008, the most recent fiscal year, were $6,994,000.

The aggregate market value of the shares of common stock held by non-affiliates of the registrant was
approximately $1,248,170 based upon the closing sale price as reported by the NASDAQ Stock Market on September 30, 2008. The number of outstanding non-affiliate shares of the registrants $0.005 par value common stock was 2,013,177 as of
September 30, 2008.

2,735,508 shares of Common Stock, par value $0.005, were outstanding as of September 30, 2008.

DOCUMENTS INCORPORATED BY REFERENCE

None.









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EXPLANATORY NOTE

We are filing this Amendment No. 1 on Form 10-KSB/A (the Amendment) to our Annual Report on Form 10-KSB for the year ended July 31, 2008 to provide additional information regarding executive
compensation. This revised and expanded information can be found under Part III, Items 9, 10, and 11.

In addition, we are also including a
currently-dated Sarbanes Oxley Act Section 302 and Section 906 certifications of the Chief Executive Officer and Chief Financial Officer that are attached to this Amendment as Exhibits 31.1 and 32.1.

Except as set forth below, this Form 10-KSB/A does not modify, amend or update in any way any other items or disclosure in the Form 10-KSB. This
Form 10-KSB/A continues to speak as of the date of the original Form 10-KSB and other than as specifically reflected in the Form 10-KSB/A does not reflect events occurring after the filing of the original Form 10-KSB.



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PART III



|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 10(a) OF THE EXCHANGE ACT.
|------- | ----------------------------------------------------------------------------------------------------------------

Directors and Executive Officers

The Board of
Directors of the Company currently consists of five directors divided into three classes designated Class I, Class II and Class III. A single class of directors is elected each year at the annual meeting. Subject to transition provisions, each class
of directors serves until the third annual meeting of stockholders after his/her election or until a successor has been elected and duly qualified.

The following table sets forth information about our Directors and Executive Officers:



|                   |  |     |  |                                                   |  |                 |  |               
|------------------ |  | --- |  | ------------------------------------------------- |  | --------------- |  | --------------
|NAME               |  | AGE |  | POSITION                                          |  | DESIGNATEDCLASS |  | TERMEXPIRATION
|David S. Lee       |  | 71  |  | Chairman and Chief Executive Officer and Director |  | CLASS II        |  | 2010          
|                   |  |     |  |                                                  
|Stephen R. Bowling |  | 66  |  | Chief Financial Officer and Director              |  | CLASS III       |  | 2009          
|                   |  |     |  |                                                  
|Robert P. Dilworth |  | 66  |  | Director                                          |  | CLASS II        |  | 2010          
|                   |  |     |  |                                                  
|Frederick W. Gibbs |  | 76  |  | Director                                          |  | CLASS III       |  | 2009          
|                   |  |     |  |                                                  
|W. Frank King      |  | 68  |  | Director                                          |  | CLASS I         |  | 2008          

DAVID S. LEE, became the Chairman of the Board of eOn in 1991 and became President and
Chief Executive Officer in November 2003. Previously Mr. Lee served as Chief Executive Officer from May 2000 through August 2001. Mr. Lee is a director of ESS Technology, Inc., a provider of semiconductor and software solutions for
multimedia applications; iBasis, Inc., a telecommunications company; and Linear Technology Corporation, a semiconductor company. Mr. Lee is also a Regent of the University of California. From 1985 to 1988, Mr. Lee was President and
Chairman of Data Technology Corporation, a computer peripheral company. Prior to 1985, he was Group Executive and Chairman of the Business Information Systems Group of ITT Corporation, a diversified company, and President of ITT Qume, formerly Qume
Corporation, a computer systems peripherals company. In 1973, Mr. Lee co-founded Qume Corporation and was its Executive Vice President until the company was acquired by ITT Corporation in 1978. Mr. Lee received an M.S. from North Dakota
State University and a B.S. and an honorary doctorate from Montana State University.

STEPHEN R. BOWLING, became a director of eOn
in 1993 and Chief Financial Officer in November 2003. From 1994 to 1997, he was the President of eOn and, from 1994 to 1998, he was the Chief Executive Officer of eOn. In 1993, Mr. Bowling became a director of Cortelco Systems Holding
Corporation. He was the President and Chief Executive Officer of Cortelco Systems Holding Corporation from 1993 to April 2004. He was the President and Chief Executive Officer of eManage.com, an internet web site service company in 1999 and 2000.
eManage.com filed for Chapter 11 bankruptcy in November 2000. Mr. Bowling received an M.B.A. from Stanford University and a B.A. from Williams College.

ROBERT P. DILWORTH, became a director of eOn in 1998. He served on the board of Metricom, Inc., a wireless data communications company, and was its President from 1987 to 1997, its Chief Executive Officer from
1987 to 1998, and its Chairman from 1997 to 2000. He is a director for Amber Systems, a wireless site provider and Amphbus, Inc., a semiconductor design company. Mr. Dilworth is currently Chairman and CEO of GraphOn Corporation, a computer
software company. Mr. Dilworth received a B.S. from Los Angeles State University.

FREDERICK W. GIBBS, became a director of eOn
in 2002. In 1988, Mr. Gibbs founded Mulberry Hill Enterprises, a consulting firm specializing in telecommunications and electronics, business acquisition analysis, and international business. Previously, Mr. Gibbs served in various
management and consultant roles for



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International Telephone and Telegraph Corporation (ITT) over a 23 year period, including Executive Vice President of ITT and Senior Group Executive of
Telecommunications and Electronics, a division of ITT Corporation. Mr. Gibbs also served on the boards of CMC Industries and ACT Manufacturing. Currently, Mr. Gibbs is a practicing attorney. Mr. Gibbs earned a B.A. from Alfred
University and a J.D. from Rutgers University.

W. FRANK KING, became a director of eOn in 1998. Mr. King is also a director of
iBasis, Inc., a telecommunications company; Aleri Inc., a software company; and NMS Communications, a telecommunications company. Dr. King earned a Ph.D. from Princeton University, an M.S. from Stanford University and a B.S. from the University
of Florida.

Board of Directors and Committee Meetings

During fiscal year 2008, 6 meetings of the Board of Directors were held. Each of the directors during the term of their tenure attended or participated in at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held by all committees of the Board of Directors on which such director served during the year. The Board of Directors does have an Audit Committee, a Compensation
Committee and a Corporate Governance and Nominating Committee, the members of which are appointed by the Board of Directors. The Board of Directors established an Independent Committee of the Board of Directors to evaluate the potential acquisition
of Cortelco Systems Holding Corp. The Independent Committee met 5 times during fiscal year 2008. The Board of Directors has determined that directors Dilworth, King and Gibbs are independent directors as defined in Rule 4200 of the
Marketplace Rules of the National Association of Security Dealers, Inc. Independent directors are free of any relationship that, in the opinion of the Board, may interfere with such members individual exercise of independent judgment in
evaluating transactions contemplated by the Company. These three directors are the members of the Audit Committee, Compensation Committee and the Corporate Governance and Nominating Committee, as discussed below.

Audit Committee

The Audit Committee consists of
Robert P. Dilworth, W. Frank King, and Frederick W. Gibbs. The Audit Committee makes recommendations to the Board regarding the selection of independent auditors, reviews the scope and results of the audit engagement, approves the fees for the
auditors, reviews and evaluates eOns internal control functions, and reviews all potential conflict of interest situations. See Item 12. Certain Relationships and Related Party Transactions. The Audit Committee has adopted a
written charter in accordance with Section 3(a) (58) (A) of the Securities Exchange Act of 1934. The Board of Directors has determined that Mr. Dilworth is an audit committee financial expert as defined in
Item 401(h) of Regulation S-K. The Audit Committee met 3 times during fiscal year 2008.

Compensation Committee

The Compensation Committee consists of Robert P. Dilworth, W. Frank King, and Frederick W. Gibbs. The Compensation Committee reviews, determines, and
establishes the salaries, bonuses and other compensation of the Companys executive officers and administers the Companys Equity Incentive Plans in which executive officers and other key employees participate. The Compensation Committee
met 2 times during fiscal year 2008.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee (the CGN Committee) consists of Robert P. Dilworth, W. Frank King, and Frederick W. Gibbs.
The CGN Committee has the responsibility for matters relating to the organization and membership of the board of directors and for issues relating to the companies corporate governance. The Corporate Governance and Nominating Committee did not meet
during fiscal year 2008.



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The CGN Committee does not have a separate charter. The Board of Directors will consider all potential
candidates for nomination by the Board of Directors for election as directors who are recommended by the Companys stockholders, directors, officers and employees. All director recommendations must be made in accordance with the provisions of
Section 5(b) of our bylaws. All director recommendations should be sent to the CGN Committee, c/o Corporate Secretary. The CGN Committee will screen all potential director candidates in the same manner, regardless of the source of the
recommendation. The CGN Committees review typically will be based on the written materials provided with respect to a potential director candidate. The CGN Committee will evaluate and determine whether a potential candidate meets our minimum
qualifications and specific qualities and skills for directors and whether requesting additional information or an interview is appropriate.

The Board of Directors has adopted the following series of minimum qualifications and specific qualities and skills for our directors, which will serve as the basis upon which potential director candidates are evaluated by the CGN
Committee:



| |  |  | Directors should possess the highest personal and professional ethics, integrity and values.
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Directors should have expertise and experience at policy-making levels in areas that are relevant to our business.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | Directors should have, or demonstrate an ability and willingness to acquire in short order, a clear understanding of the fundamental aspects of our business.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Directors should be committed to representing the long-term interests of our stockholders.
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Directors should be willing to devote sufficient time to carry out their duties and responsibilities effectively and should be committed to serving on the Board of
Directors for an extended period of time.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Directors should offer their resignation in the event of any significant change in their personal circumstances, including a change in their principal job
responsibilities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Compensation of Directors

Salaried officers of the Company or its subsidiaries do not receive additional compensation for serving as members of the Board of Directors. No additional compensation is paid if a full-time officer serves on any
committee of the Board of Directors.

Annual cash payments of $15,000 are paid to each non-employee serving as a member of the Board of
Directors. Directors are also entitled to reimbursement of expenses incurred to attend meetings. Non-employees serving as members of the Board of Directors are eligible to receive stock option grants under the eOn Communications Corporation 1999
Equity Incentive Plan (the 1999 Plan), which was adopted by the Board of Directors and approved by a majority of stockholders in April 1999. As of September 30, 2008, there were three non-employee directors eligible to participate
in the 1999 Plan: Robert P. Dilworth, W. Frank King, and Frederick W. Gibbs. During fiscal year 2008, there were no options to purchase common stock issued to non-employee directors. The following table sets forth a summary of compensation we paid
to our non-employee directors for fiscal year 2008.



|                   |  |                           |        |              |   |       |  |  |        
|------------------ |  | ------------------------- | ------ | ------------ | - | ----- |  |  | -------
|Name               |  | Fees EarnedOr Paid inCash |        | OptionAwards |   | Total
|Robert P. Dilworth |  | $                         | 15,000 |              | $ |      |  |  | $15,000
|Frederick W. Gibbs |  |                           | 15,000 |              |   |      |  |  | 15,000 
|W. Frank King      |  |                           | 15,000 |              |   |      |  |  | 15,000 

In order to recruit and retain qualified directors, the Boards intent is to make annual
grants of stock options to each director. Exercise prices will be equal to the fair market value on the date of grant. Each stock option will



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become exercisable one year following the date of grant and expire ten years from the date of grant. Options granted under the 1999 Plan to directors may be
exercised only if the holder has been in continuous service on the Board of Directors at all times since the date of the grant of the option.

Stockholder Communications

Stockholders may communicate with the Board of Directors or any individual director regarding
any matter relating to the Company that is within the responsibilities of the Board of Directors. Stockholders, when acting solely in such capacity, should send their communications to the Board of Directors or an individual director c/o Corporate
Secretary, 185 Martinvale Lane, San Jose, California 95119. The Corporate Secretary will discuss with the chairman of the Board or the individual director whether the subject matter of a stockholder communication is within the responsibilities of
the Board of Directors. The Corporate Secretary will forward a stockholder communication to the Chairman of the Board or individual director if such person determines that the communication meets this standard.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that the Companys directors and executive officers and the beneficial owners of more than 10% of the outstanding shares of the Companys common stock
(the Reporting Persons) file initial reports of, and subsequent reports of changes in, beneficial ownership of the common stock with the Securities and Exchange Commission (the SEC). The Reporting Persons are required to
furnish the Company with copies of all Section 16(a) reports filed with the SEC. Based solely on the Companys review of the copies of such reports and written representations from certain Reporting Persons furnished to the Company, the
Company believes that the Reporting Persons complied with all applicable Section 16(a) filing requirements during fiscal 2008.

The
Company has adopted a Code of Ethics that applies to all employees. We intend to satisfy the disclosure requirement under Item 9 of Form 10-KSB regarding an amendment to, or waiver from, a provision of this code of ethics by posting such
information on our investor relations websiteinvestor.eoncc.com.



|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

The following table sets
forth certain information concerning compensation earned for the fiscal years ended July 31, 2008, 2007, and 2006, by the Companys Chief Executive Officer, and by executive officers who earned more than $100,000 in salary and bonus during
fiscal 2008 (the named executive officers).



|                                        |  |            |  |        |         |       |   |                  |  |                           |        |  |                   |       |  |  |   |        
|--------------------------------------- |  | ---------- |  | ------ | ------- | ----- | - | ---------------- |  | ------------------------- | ------ |  | ----------------- | ----- |  |  | - | -------
|Name and Principal Position             |  | FiscalYear |  | Salary |         | Bonus |   | OptionAwards (1) |  | All OtherCompensation (2) |        |  | TotalCompensation
|David S. Lee (3)                        |  | 2008       |  | $      | 157,500 |       | $ |                 |  | $                         |       |  | $                 |      |  |  | $ | 157,500
|President; Chief Executive Officer      |  | 2007       |  |        | 95,192  |       |   |                 |  |                           |       |  |                   | 9,140 |  |  |   | 104,332
|                                        |  | 2006       |  |        |        |       |   | 10,000           |  |                           | 60,402 |  |                   |      |  |  |   | 70,402 
|                                        |  |            |  |        |         |      
|Stephen R. Bowling (4)                  |  | 2008       |  |        | 213,431 |       |   |                 |  |                           |       |  |                   | 2,944 |  |  |   | 216,375
|Chief Financial Officer                 |  | 2007       |  |        | 225,000 |       |   |                 |  |                           |       |  |                   | 4,125 |  |  |   | 229,125
|                                        |  | 2006       |  |        | 225,000 |       |   | 10,000           |  |                           | 60,402 |  |                   | 3,386 |  |  |   | 298,788
|                                        |  |            |  |        |         |      
|Mitch C. Gilstrap (5)                   |  | 2008       |  |        | 91,903  |       |   |                 |  |                           |       |  |                   | 1,719 |  |  |   | 93,622 
|Vice President; Chief Operating Officer |  | 2007       |  |        | 135,000 |       |   |                 |  |                           |       |  |                   | 2,153 |  |  |   | 137,153
|                                        |  | 2006       |  |        | 135,000 |       |   | 28,305           |  |                           |       |  |                   | 2,165 |  |  |   | 165,470
|                                        |  |            |  |        |         |      
|Vijay Sharma (6)                        |  | 2008       |  |        | 196,923 |       |   |                 |  |                           |       |  |                   | 2,419 |  |  |   | 199,342
|Chief Technology Officer                |  | 2007       |  |        | 200,000 |       |   |                 |  |                           |       |  |                   | 2,029 |  |  |   | 202,029
|                                        |  | 2006       |  |        | 104,000 |       |   | 50,000           |  |                           |       |  |                   | 1,819 |  |  |   | 155,819



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|(1) | The amount in the Options Awards column represents the grant date fair value of the awards issued during the fiscal year. During fiscal year 2008, there were no options issued to
the Named Executive Officers as compensation.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The amounts in All Other Compensation column are more fully described in the table under All Other CompensationSupplemental.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(3) | On January 1, 2007, the Company began paying an annual salary of $165,000. On June 16, 2008, Mr. Lees salary was reduced to $100,000.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(4) | On April 1, 2005, the Company increased annual compensation from $140,000 to $225,000. On June 16, 2008, Mr. Bowlings salary was reduced to
$125,000.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Mr. Gilstrap served as Vice President and Chief Operating Officer until April 1, 2008.
|--- | --------------------------------------------------------------------------------------

|(6) | Appointed Chief Technology Officer of the Company on October 23, 2006 and served until March 31, 2008.
|--- | ------------------------------------------------------------------------------------------------------

All Other CompensationSupplemental

The table
below sets forth other compensation information during fiscal year 2008 for our Named Executive Officers.



|                            |  |                                         |  |                   |       |  |                             |     |  |  |   |      
|--------------------------- |  | --------------------------------------- |  | ----------------- | ----- |  | --------------------------- | --- |  |  | - | -----
|Name and Principal Position |  | 401K                                    |  | InsurancePremiums |       |  | Total All OtherCompensation
|Stephen R. Bowling          |  | Chief Financial Officer                 |  | $                 | 2,000 |  | $                           | 944 |  |  | $ | 2,944
|                            |  |                                         |  |                  
|Mitch C. Gilstrap           |  | Vice President; Chief Operating Officer |  |                   | 923   |  |                             | 796 |  |  |   | 1,719
|                            |  |                                         |  |                  
|Vijay Sharma                |  | Chief Technology Officer                |  |                   | 1,908 |  |                             | 511 |  |  |   | 2,419

General Philosophy

We compensate our executives through a mix of base salary, performance incentive bonuses, long-term equity incentives, and employee benefits and perks designed to:



| |  |  | Attract and retain high caliber executives and motivate them to achieve superior performance for the benefit of our stockholders;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Motivate our executives to achieve our key strategic and financial performance measures; and
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Enhance the incentives for executives to increase our stock price and maximize stockholder value.
| | - |  | -------------------------------------------------------------------------------------------------

A portion of executive officers compensation potential on an annual basis is at risk based on our performance. If our performance does not meet the
criteria established by the Compensation Committee, incentive compensation will be adjusted accordingly. The Compensation Committee of the Board of Directors oversees our general programs of compensation and benefits for all employees and determines
the compensation of our executive officers and directors. Our compensation setting process consists of establishing a base salary, a targeted, performance incentive bonus, and long-term equity compensation for each executive. We design the
performance incentive bonus compensation to reward executives as a group linking this compensation to revenue and earnings growth targets as well as certain other corporate objectives. Other employees are rewarded with performance incentive bonus
compensation for achieving specific operational goals within areas under their control, although company-wide performance is also a factor.

The total cash compensation (i.e., base salary plus performance incentive bonus) paid to our executive officers is intended to be competitive with the total cash compensation paid to executive officers in similar positions at
companies engaged primarily in the communications industry with revenues similar to ours, as well as comparable to other companies with performance similar to ours. The Compensation Committee reviews the



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targeted total compensation (i.e., the aggregate level of compensation that we will pay if performance goals are fully met) to ensure the total
compensation is aligned with our goals of comparability and incentivizing performance. We also provide our executives with a variety of other benefits that we make available generally to all salaried employees.

The Role of the Compensation Committee

The
Compensation Committee has the primary authority to determine our compensation philosophy and to establish compensation for our executive officers. In determining the appropriate level of compensation and the total compensation package, the
Compensation Committee reviews a variety of sources to determine and set compensation.

The Compensation Committee reviews the performance
and compensation for our executive officers annually. Our CEO assists the Compensation Committee by providing annual recommendations regarding the compensation of all other executives. Each named executive officer and other senior executive
management team members, in turn, participates in annual performance reviews with the CEO to provide input about their contributions to our success for the period being assessed. The performance of our CEO and executive management team as a group is
reviewed annually by the Compensation Committee.

Total Compensation

The total compensation package offered to each executive officer is comprised of four elements, listed below with objectives for each, and described in more detail in the following sections:



|                                  |  |                                                      
|--------------------------------- |  | -----------------------------------------------------
|Element                           |  | Objective                                            
|Base salary                       |  | Attract and retain, reward individual performance    
|Performance incentive bonus       |  | Achievement of financial objectives                  
|Long-term equity incentive awards |  | Align long-term compensation with stockholder results
|Employee benefits and perks       |  | Provide competitive benefits                         

Typically, the Compensation Committee engages in peer compensation of our executives and similar
companies, taking into consideration the companys size, industry, and geographic locality, as well as the comparable executives level of responsibility, and years of experience. Due to restructuring, the Committee believed that a
reduction was appropriate and did not conduct a peer comparison in fiscal year 2008. The financial position of the Company is a major factor in the determination of executive compensation.

The overall result of this review provides a base point for the analysis of the Compensation Committee. We look at a number of other factors, including
the total compensation, the median, mean, minimum, and maximum for each executive officer position. We strongly believe in retaining the best talent among our executive management team. Goals of the compensation program are to align compensation
with business performance and the interest of stockholders, and enable the Company to attract, motivate, and retain management that can contribute to the Companys long-term success. In the case of our CEO, we also considered our performance
since he was employed, and the anticipated level of difficulty of replacing him with someone of comparable experience and skill.

Base Salaries

We want to provide our executives with a level of assured cash compensation in the form of base salary to compensate them for the services
they provide and their level of professional experience and knowledge. The Compensation Committee considers the input of the CEO with respect to the base salaries of our other executive officers. The Compensation Committee reviews senior management
compensation at least annually. In establishing base salaries, we seek relevant compensation information including (1) the scope of the position;



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(2) the responsibilities; (3) the experience and length of service with our Company, the industry, and the community; (4) efforts and
performance; (5) team building skills; (6) the observance of our ethics and compliance programs; (7) the salaries paid by competitive companies to officers in similar positions; and (8) the base salaries paid to our other
executive officers. Increases in base salary from year to year are based upon the performance of the executive officers as well as market positioning considerations, as assessed by the CEO and reviewed and approved by the Compensation Committee. The
Compensation Committee assesses these factors with respect to the CEO. The Compensation Committee recommends the compensation of the CEO for approval by the independent directors of the Board of Directors. The base salaries of our named executive
officers are set forth below.



|                   |  |                                      |        
|------------------ |  | ------------------------------------ | -------
|Name               |  | Annual Base Salaryas ofJuly 31, 2008
|David S. Lee       |  | $                                    | 100,000
|Stephen R. Bowling |  |                                      | 125,000

These salaries reflect levels that the Compensation Committee concluded were appropriate based
upon its general experience and review of comparables. The base salary reduction of Mr. Lee and Mr. Bowling in fiscal year 2008 was in conjunction with a restructuring of the Company accompanied by a reduction in personnel.

Performance Incentive Bonus

We implemented an
Executive Incentive Plan (the Bonus Plan) for all of our officers, including executive officers, in 2006. The Bonus Plan, which is administered by the Compensation Committee, provides that each year the Compensation Committee will establish a method
for determining the total amount of performance incentive bonuses available to be paid to all officers under the Bonus Plan (bonus pool). The bonus pool is established based upon specific measures of our financial performance, which may include
sales, operating income, pre-tax income, net income, and earnings per share. The Compensation Committee, in its sole and absolute discretion, may determine the amount of each officers actual performance incentive bonus portion of bonus pool
earned under the Bonus Plan. For fiscal years 2007 and 2008, no bonus was earned due to the financial performance of the Company.

Equity Compensation

We may grant long-term, equity-based incentive awards to our executive officers under our 1999 and 2001 Equity Incentive Plans, as
amended and restated (the Equity Incentive Plans). Under the Equity Incentive Plans, which are administered by the Compensation Committee, we may grant awards in the form of incentive stock options, nonqualified stock options, stock appreciation
rights, restricted stock, phantom stock units, performance share units, and stock bonuses. Based on an assessment of competitive factors, we determine an award that is suitable for providing an adequate incentive for the performance and retention of
each executive officer.

Our prevailing practice has been to award stock options in order to closely align the interests of the executive
officers with those of our stockholders. To encourage retention, the stock options may be granted with a vesting period of one or more years. We have taken the position that stock options should be granted with an exercise price that is equal to the
fair market value of the common stock on the grant date, which is calculated as the average of the highest and lowest reported sale prices on the trading day immediately prior to the grant date. The actual value of stock option compensation,
therefore, depends on the market value of the common stock increasing after the grant date.

Guidelines for the number of equity incentive
awards granted to each executive officer are determined using a procedure approved by the Compensation Committee based upon several factors, including the executive officers level of responsibility, salary, performance, and the value of the
stock at the time of grant. We



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determine the fair market value based upon the ending price of the stock on the day prior to the grant date. With the exception of promotions and new hires,
we generally make these awards at the first meeting of the Compensation Committee each year following the availability of the financial results for the prior year. This timing was selected because it enabled us to consider our prior year performance
and the potential recipients and our expectations for the current year. The awards also are made as early as practicable in the year in order to optimize the time-period for the incentives associated with the awards. The Compensation
Committees schedule is determined several months in advance, and the proximity of any awards to earnings announcements or other market events is coincidental. No awards were granted in fiscal year 2008 due to the Companys financial
performance and the absence of newly hired employees.

Each grant allows the officer to acquire shares of common stock at the market price
on the grant date over a specified period of time, up to 10 years. Option awards will provide a return to the executive officer only if the market price of the shares appreciates over the term of the award.

Other Elements of Compensation and Perks

In order to
attract and retain employees while paying market levels of compensation, we provide our executives and other employees the following benefits and perks.

Medical Insurance.  We provide to each executive officer and the executive officers spouse and children such health, dental and vision insurance coverage as we may from time to time make
available to our other employees. We pay a portion of the premiums for this insurance for all employees.

Life and Disability
Insurance.  We provide to each executive officer such disability and/or life insurance as we, in our sole discretion, may from time to time make available to our other executive employees of the same level of employment.

Defined Contribution Plan.  We offer the Section 401(k) Savings/Retirement Plan (the 401(k) Plan), a tax-qualified retirement plan,
to our eligible employees. Under the provisions of the plan, all participants may contribute up to 60% of their compensation, subject to limitations established by the Internal Revenue Service. We may contribute a matching contribution of not less
that 50% of the employee contributions up to 6% of the employees compensation. We may also provide special discretionary contributions equal to a percentage of an employees annual compensation and/or an amount determined by management.

Stock Purchase Plan.Our 1999 Employee Stock Purchase Plan (ESPP), which qualifies under Section 423 of the
Internal Revenue Code, permits participants to purchase our common stock on favorable terms. ESPP participants are granted a purchase right to acquire shares of common stock at a price that is 85% of the stock price on either the first day of the
plan period or the stock price on the last day of the plan period, whichever is lower. The purchase dates occur on the last business day of August and February of each year. To pay for the shares, each participant may authorize periodic payroll
deductions from their cash compensation, subject to certain limitations imposed by the Internal Revenue Code. All payroll deductions collected from the participant in a period are automatically applied to the purchase of common stock on that
periods purchase date provided the participant remains an eligible employee and has not withdrawn from the ESPP prior to that date.

Other.  We make available certain other perks or fringe benefits to executive officers and other employees, such as tuition reimbursement, travel insurance, professional society dues and food and recreational fees
incidental to official company functions, including board meetings.



8



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Severance Benefits

We believe that companies should provide reasonable severance benefits to employees. With respect to named executive officers, these severance benefits should reflect the fact that it may be difficult for them to find
comparable employment within a short period of time. In the event of the termination of our named executive officers employment, the post-employment pay and benefits, if any, to be received by the executive officer will vary according to the
basis for their termination.

Effective July 1, 2006, we entered into a severance agreement with Vijay Sharma, former Chief Technology
Officer. Under the agreement, in exchange for certain releases and covenants by Mr. Sharma, we agreed to provide him with severance consisting of (a) his base salary with respect to a period of 12 months after his termination at his
base salary on the termination date (such payments would be reduced or eliminated if Mr. Sharma becomes employed by another company prior to the end of the 12 months period), (b) the base salary equivalent of his earned and unused
vacation, (c) paid continuation coverage under our group medical, dental and vision insurance plans for a period of 12 months after his termination, (d) professional outplacement services, and (e) legal costs for review of the
agreement. Payments of approximately $62,000 have been paid to Mr. Sharma subsequent to his termination on March 31, 2008 thru July 31, 2008 under this agreement.

Compensation of Chief Executive Officers

Prior to January 2007, our CEO elected not to receive a
base salary, on January 1, 2007, we began paying him a base salary of $165,000. On June 16, 2008, the base salary of the CEO and CFO was reduced to $100,000 and $125,000, respectively, in conjunction with a Company restructure and
reduction in personnel.

Board Process

The Compensation Committee of the Board of Directors approves all compensation and awards to executive officers. The Compensation Committee reviews the performance and compensation of the CEO. For the remaining executive officers, the CEO
makes recommendations to the Compensation Committee that are subject to their review and approval. With respect to equity compensation awarded to others, the Compensation Committee grants restricted stock, generally based upon the recommendation of
the CEO, and has delegated option and restricted stock granting authority to the CEO for employees who are not officers.

Stock Option Grants In Fiscal
Year 2008

During fiscal year 2008, no options to purchase shares of the Companys common stock were issued to directors or
executive officers of the Company.

Aggregated Option Exercises in Fiscal 2008 and Fiscal Year-End Option Values

The table below sets forth information regarding the outstanding equity awards held by our named executive officers as of July 31, 2008. Options
generally vest at either a rate of (1) 12.5% six months after the grant date and equal monthly installments thereafter over a 42 month period, or (2) 25% one year after the grant date and equal monthly installments thereafter over a three
year period. These options have a term of 10 years.



|                   |  |                          |             |               |               |                                                    |             |                                          |               |   |   |  |   |  
|------------------ |  | ------------------------ | ----------- | ------------- | ------------- | -------------------------------------------------- | ----------- | ---------------------------------------- | ------------- | - | - |  | - | -
|Name               |  | SharesAcquiredOnExercise |             | ValueRealized |               | Number of Securities UnderlyingUnexercised Options |             | Value of Unexercised In-The-MoneyOptions
|                   |  |                          | Exercisable |               | Unexercisable |                                                    | Exercisable |                                          | Unexercisable
|David S. Lee       |  |                         |             |              |               | 33,333                                             |             |                                         |               | $ |  |  | $ | 
|Stephen R. Bowling |  |                         |             |              |               | 20,499                                             |             |                                         |               | $ |  |  | $ | 



9



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Outstanding Equity Awards

The table below sets forth information regarding the outstanding equity awards held by our Named Executive Officers as of July 31, 2008.



|                   |  |                                                            |  |                                                              |  |                     |        |                      |          
|------------------ |  | ---------------------------------------------------------- |  | ------------------------------------------------------------ |  | ------------------- | ------ | -------------------- | ---------
|Name               |  | Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable |  | Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable |  | OptionExercisePrice |        | OptionExpirationDate
|David S. Lee       |  | 1,000                                                      |  |                                                             |  | $                   | 59.380 |                      | 4/5/2010 
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 5.000  |                      | 5/22/2011
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 3.400  |                      | 5/22/2012
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 5.000  |                      | 5/20/2013
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 9.650  |                      | 7/30/2013
|                   |  | 18,333                                                     |  |                                                             |  | $                   | 16.350 |                      | 2/24/2014
|                   |  | 10,000                                                     |  |                                                             |  | $                   | 7.150  |                      | 6/14/2016
|Stephen R. Bowling |  | 1,000                                                      |  |                                                             |  | $                   | 59.380 |                      | 4/5/2010 
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 5.000  |                      | 5/22/2011
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 3.400  |                      | 5/22/2012
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 5.000  |                      | 5/20/2013
|                   |  | 1,000                                                      |  |                                                             |  | $                   | 9.650  |                      | 7/30/2013
|                   |  | 5,499                                                      |  |                                                              |  | $                   | 16.350 |                      | 2/24/2014
|                   |  | 10,000                                                     |  |                                                             |  | $                   | 7.150  |                      | 6/14/2016



|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|-------- | -----------------------------------------------------------------------------------------------

The following table sets forth information regarding the beneficial ownership of shares of our Common Stock as of September 30, 2008. The table shows
ownership by:



| |  |  | Each person or entity known to us to beneficially own five percent (5%) or more of the shares of our outstanding stock;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | Each of our directors;
| | - |  | ----------------------



| |  |  | Each of our Named Executive Officers;
| | - |  | -------------------------------------



| |  |  | Each nominee for director, if such person is not currently a director or executive officer; and
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | All of our directors, executive officers, and director nominees as a group.
| | - |  | ---------------------------------------------------------------------------

This information is based on information received from or on behalf of the named individuals. The column entitled Options consists of shares
of common stock subject to options exercisable or currently exercisable within 60 days of September 30, 2008, which are deemed to be outstanding for the purpose of computing the percentage ownership of the person holding the options. As of
September 30, 2008, eOn had 2,735,508 shares outstanding.



10



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Unless otherwise indicated, the principal address of each of the stockholders below is: c/o eOn
Communications Corporation, 185 Martinvale Lane, San Jose, California 95119. Except as otherwise indicated in the footnotes to this table, and subject to applicable community property laws, the persons named in the table have sole voting and
investment power with respect to all shares of our Common Stock beneficially owned by them.



|                                                            |  |                                      |  |                                  |     |  |                     |  
|----------------------------------------------------------- |  | ------------------------------------ |  | -------------------------------- | --- |  | ------------------- | -
|Name and Address of Beneficial Owner                        |  | Principal Position                   |  | Number ofSharesBeneficiallyOwned |     |  | Percent ofClass (6) |  
|David S. Lee                                                |  | President and Chairman of the Board  |  | 747,114                          | (1) |  | 26.13               | %
|                                                            |  |                                      | 
|Stephen R. Bowling                                          |  | Chief Financial Officer and Director |  | 27,049                           | (2) |  | *                   |  
|                                                            |  |                                      | 
|Robert P. Dilworth                                          |  | Director                             |  | 24,406                           | (3) |  | *                   |  
|                                                            |  |                                      | 
|Frederick W. Gibbs                                          |  | Director                             |  | 18,000                           | (4) |  | *                   |  
|                                                            |  |                                      | 
|W. Frank King                                               |  | Director                             |  | 30,006                           | (5) |  | *                   |  
|                                                            |  |                                      | 
|All Directors and executive officers as a group (5 persons) |  |                                      |  | 846,575                          |     |  | 29.60               | %



|* | Less than one percent.
|- | ----------------------

|(1) | Consists of 632,586 shares held directly by David S. Lee, 45,998 shares held by the Lee Family Trust, 35,197 shares held by Cortelco Systems Puerto Rico, and 33,333 options
exercisable within 60 days of September 30, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consists of 6,550 shares held directly and 20,499 options exercisable within 60 days of September 30, 2008.
|--- | -----------------------------------------------------------------------------------------------------------

|(3) | Consists of 24,406 options exercisable within 60 days of September 30, 2008.
|--- | ----------------------------------------------------------------------------

|(4) | Consists of 18,000 options exercisable within 60 days of September 30, 2008.
|--- | ----------------------------------------------------------------------------

|(5) | Consists of 2,000 share held directly and 28,006 options exercisable within 60 days of September 30, 2008.
|--- | ----------------------------------------------------------------------------------------------------------

|(6) | The percentage of outstanding shares of common stock beneficially owned by each person is calculated based on the 2,735,508 outstanding shares of common stock as of
September 30, 2008, plus the shares of common stock that the person has the right to acquire as of such date or within 60 days thereafter.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table summarizes the securities authorized for issuance under the Companys equity compensation plans as of July 31, 2008.



|                                                            |  |                                                                                       |  |                                                                         |       |                                                                    |        
|----------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- | ----- | ------------------------------------------------------------------ | -------
|                                                            |  | Number ofsecurities to beissued uponexercise ofoutstandingoptions,warrants,
andrights |  | Weighted-average exerciseprice ofoutstandingoptions,warrants, andrights |       | Number ofsecuritiesremainingavailable forfuture issuanceunder plan
|Equity compensation plans approved by security holders:     |  |                                                                                       |  |                                                                         |       |                                                                    |        
|1997 Equity Incentive Plan                                  |  | 15,690                                                                                |  | $                                                                       | 25.77 |                                                                    | 26     
|1999 Equity Incentive Plan                                  |  | 169,593                                                                               |  | $                                                                       | 18.15 |                                                                    | 129,963
|1999 Employee Stock Purchase Plan                           |  | 1,280                                                                                 |  | $                                                                       | 0.98  |                                                                    | 70,930 
|Equity compensation plans not approved by security holders: |  |                                                                                       |  |                                                                         |       |                                                                    |        
|2001 Equity Incentive Plan                                  |  | 24,813                                                                                |  | $                                                                       | 6.12  |                                                                    | 67,999 
|                                                            |  |                                                                                       |  |                                                                         |       |                                                                    |        
|TOTAL                                                       |  | 211,376                                                                               |  | $                                                                       | 17.20 |                                                                    | 268,918
|                                                            |  |                                                                                       |  |                                                                         |       |                                                                    |        

The 2001 Equity Incentive Plan contains provisions similar to the 1999 Equity Incentive Plan, with
the notable exception that grants to officers and directors are prohibited.



11



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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: January 15, 2009 |  |  |  | By |  | /s/    STEPHEN R.
BOWLING
|                       |  |  |  |    |  |                           |  | Stephen R. Bowling, Vice President,
|                       |  |  |  |    |  |                           |  | Chief Financial Officer            
|                       |  |  |  |    |  |                           |  | (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.



|                                             |  |                                                                                 |  |                 
|-------------------------------------------- |  | ------------------------------------------------------------------------------- |  | ----------------
|Name                                         |  | Title                                                                           |  | Date            
|                                             |  |                                                                                
|/S/    DAVID S.
LEE David S. Lee             |  | President, Chief Executive Officer and Chairman (Principal Executive Officer)   |  | January 15, 2009
|                                             |  |                                                                                
|/S/    STEPHEN R.
BOWLING Stephen R. Bowling |  | Vice President, Chief Financial Officer, Director (Principal Financial Officer) |  | January 15, 2009
|                                             |  |                                                                                
|/S/    ROBERT P.
DILWORTH Robert P. Dilworth |  | Director                                                                        |  | January 15, 2009
|                                             |  |                                                                                
|/S/    W. FRANK
KING W. Frank King           |  | Director                                                                        |  | January 15, 2009
|                                             |  |                                                                                
|/S/    FREDERICK W.
GIBBS Frederick W. Gibbs |  | Director                                                                        |  | January 15, 2009



12



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EXHIBIT INDEX

Documents listed below are being filed as exhibits herewith. Exhibits identified by asterisks (*) are being incorporated herein by reference and, pursuant to Rule 12b-32 of the General Rules and Regulations promulgated by the
Commission under the Securities Exchange Act of 1934, reference is made to such documents as previously filed exhibits with the Commission.



|              |  |                                                                                                                               
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                       
|2.1(&)        |  | Plan of Acquisition for Cortelco Shanghai Telecom Equipment Company                                                           
|              | 
|3.1*          |  | Amended and Restated Certificate of Incorporation of eOn as filed with the Secretary of State of Delaware on November 16, 1999
|              | 
|3.2*          |  | Amended and Restated Bylaws of eOn                                                                                            
|              | 
|4.1*          |  | Reference is made to Exhibits 3.1 and 3.2                                                                                     
|              | 
|10.1*         |  | Form of Indemnity Agreement between eOn and its officers and directors                                                        
|              | 
|14(@)         |  | Code of Ethics                                                                                                                
|              | 
|31.1          |  | Rule 13a-14(a)/15d-14(a) Certifications                                                                                       
|              | 
|32.1          |  | Section 1350 Certifications                                                                                                   



|(&) | Incorporated by reference to identically numbered exhibits to the Registrants previously filed Form 8-K dated June 1, 2004
|--- | ---------------------------------------------------------------------------------------------------------------------------

|(*) | Incorporated by reference to the Companys Registration Statement on Form S-1 (No. 333-77021) or amendments thereto, filed with the Securities and Exchange Commission on April
26, 1999
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(@) | Incorporated by reference to identically numbered exhibits to the Registrants previously filed Form 10-Ks or Form 10-Qs
|--- | --------------------------------------------------------------------------------------------------------------------------



13