Item 2.05 Costs Associated with Exit or Disposal Activities

On July 29, 2008, Lantronix, Inc., a Delaware corporation (the "Company"), announced that it implemented the second phase of its restructuring plan on July 28, 2008.

As part of the second phase of its restructuring plan, Lantronix initiated a workforce reduction of 28 employees from all ranks and across all functional groups. The workforce reduction represents 17% of the Company's total work force. Along with other expense reductions, this measure is expected to reduce net annual cash expenses by approximately $3.1 million. The Company expects to incur an estimated restructuring charge in the range of $400,000 to $500,000 for employee severance and related costs in the first fiscal quarter of 2009, which ends September 30, 2008.

Combined with the first phase of its restructuring plan, Lantronix has reduced its workforce by 38 employees representing 22% of the Company's total work force.

A copy of the press release issued by the Company with respect to this matter is attached hereto as Exhibit 99.1 of this Current Report.

Item 9.01 Financial Statements and Exhibits.

(d)

99.1 Press Release dated July 29, 2008.

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