May 20, 2005



Room 4561

Norman E. Corn
Chief Executive Officer
Ion Networks, Inc.
120 Corporate Blvd.
South Plainfield, NJ 07080

Re:	Ion Networks, Inc.
	Registration Statement on Form SB-2
	Filed April 22, 2005
	File No. 333-124274

	Form 10-KSB for the fiscal year ended December 31, 2004, as
amended
	Form10-QSB for the fiscal quarter ended March 31, 2005
	File No. 0-13117

Dear Mr. Corn:

	This is to advise you that we have limited our review to the
matters identified below and have the following comments. Where
indicated, we think you should revise your documents in response
to
these comments.  With respect to the comments on the above-
referenced
Form 10-K/A, your response should be provided as soon as possible
and
not later than June 3, 2005.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form SB-2
General
1. Update the financial statements pursuant to Item 310(g) of
Regulation S-B, as needed.
Selling Stockholders, page 31
2. Please note that disclosure regarding all material transactions
with a selling shareholder that took place within the past three
years must be provided to conform to the requirements of Item 507
of
Regulation S-B.  Please revise to include the terms by which
Messrs.
Whitney, Russo and Diexler received the shares subject to resale.
Please also advise as to the nature and value of the services
performed by the consultant.
3. Please identify the natural person(s) with sole or shared
voting
or dispositive power over the shares held by Lipman Capital Group,
Inc.  Refer to interpretation 4S of the Regulation S-K section of
the
March 1999 supplement to the Publicly Available Telephone
Interpretation Manual and interpretation I.60 of the July 1997
Publicly Available Telephone Interpretation Manual which are
publicly
available on our website.
4. It does not appear that any of the selling stockholders are
registered broker-dealers or that they are affiliated with
registered
broker-dealers.  Please confirm.
Plan of Distribution, page 32
5. Please confirm that you and the selling shareholders are aware
of
our position on short sales.  See interpretation A.65 of the July
1997 Publicly Available Corp. Fin Telephone Interpretation Manual.

Signatures, page 65
6. Please revise your signature block to indicate, if true, that
Mr.
Delaney is also signing as controller or principal accounting
officer.  See Instructions for Signatures on Form SB-2.

Legal Opinion
7. Please have counsel supplementally confirm that it is their
understanding that the reference in exhibit 5 to "General
Corporation
Law of the State of Delaware" includes other Delaware statutory
provisions as well as the Delaware Constitution and reported
judicial
decisions interpreting these laws.  See Section VIII(A)(14) of our
Current Issues Outline available on our public website at
www.sec.gov.



Form 10-KSB/A
Management`s Discussion and Analysis or Plan of Operations, page
17
8. Your disclosure on page 17 indicates that revenues increased as
result of an increased number of units sold within the OEM
business
and a general rebound within the telecommunications sector.  Tell
us
which units were sold, how many were sold compared to last year
and
whether or not these units were higher margin units.  Further tell
us
if there was a change in product mix or whether or not there was
an
introduction of any new products.  Finally, it is unclear what
consideration was given to quantifying and discussing these trends
in
your Form 10-KSB/A.
9. We note that your revenues are generated from the sales of both
products and services.  Tell us what consideration you have given
to
disclosing these revenues and related costs separately within the
statement of operations as well as quantifying and discussing them
within MD&A. We refer you to Rule 310(b) of Regulation S-B.
10. We note the amount of your capitalized software balance at
December 31, 2004. From your current disclosure, it is not clear
if
this amortization is included within the cost of sales.  Tell us
where this amortization is classified in your income statement and
how you have considered Question 17 of FASB Staff Interpretation
Guidance on Applying Statement 86.
Controls and Procedures, page 19
11. You disclose that there were no "significant changes" in Ion`s
internal controls over financial reporting that could
"significantly
affect internal controls subsequent to their evaluation."  In this
regard it does not appear that your disclosure is consistent with
the
requirements of Item 308(c) of Regulation S-B and Rule 13a-15(d)
of
the Exchange Act.  Please supplementally confirm whether during
the
quarter ended December 31, 2004 there was "any change" that
materially affected or was reasonably likely to materially affect,
your internal controls over financial reporting.  Additionally,
please confirm that your disclosure in future filings will conform
to
the requirements of Item 308(c) of Regulation S-B and Rule 13a-
15(d).
12. We note that you amended your Form 10-KSB to update disclosure
in
"Certain Related Party Transactions," to file an additional
amendment
and to update the exhibit index.  Please supplementally confirm
that
your management continues to believe that disclosure controls and
procedures were effective as of December 31, 2004 or advise.

Note 2 Summary of Significant Accounting Policies

   Revenue Recognition, page 44
13. We note that 50% of your accounts receivable balance is
related
to Avaya.  Tell us your standard payment terms and whether or not
you
have granted extensions to those payment terms.  Are the payment
terms granted to Avaya different from your standard payment terms?
If you have granted extended payment terms or terms that differ
from
your standard terms, tell us how you determined that these fees
are
fixed and determinable and revenue recognition is appropriate.
Also
tell us if you are experiencing collectibility problems and how
much
of the December 31, 2004 accounts receivable balance has been
collected to date during fiscal 2005.
14. Regarding your revenue recognition accounting policy, confirm
to
us supplementally that you sell individually packaged and complete
hardware units and that you do not sell products under multi-
element
arrangements as each individual unit sold is complete and not
dependent upon any software or component sold by the company.
Also,
confirm that the maintenance contracts sold do not impact the
pricing
of any other products.

   Foreign Currency Translation, page 45
15. You indicate that you ceased international operations in 2003
and
that foreign currency translation or transaction adjustments were
not
material.  However, we note in your footnote 12 that approximately
20% of your revenues came from outside the United States.  Tell us
what impact the foreign currency translation and transaction
adjustments had on your operations with regards to your
international
customers.  To the extent these adjustments were material, MD&A
should address the impact on operations.

Note 3 Restructuring, Asset Impairments and Other Credits, page 46
16. During 2003 and 2004 we note that you presented credits in
your
restructuring line item on your income statement.  With regards to
these activities, tell us the following:
* The amount and nature of the initial restructuring and other
charges taken including the individual periods these charges were
recorded;
* Address how each of the initially recorded amounts were
determined;
* Address in detail the subsequent events and circumstances
surrounding each individual reversal of these charges;
* Tell us what consideration was given to discussing these
reversals
and changes in estimate in MD&A.
* Address whether or not the Company anticipates additional
reversals
in subsequent periods and the possible reasons for any potential
reversals;
* Tell us the amount of the remaining restructuring balance at
December 31, 2004, if any, and where these amounts are reflected
in
the balance sheet.

Form 10-QSB
17. We note that you have recently filed your Form 10-QSB for the
fiscal quarter ended March 31, 2005.  Please note that we will
convey
any additional comments we may have on such filing under separate
cover.

* * * * *

      As appropriate, please amend your filings in response to
these
comments.  You may wish to provide us with marked copies of the
amendments to expedite our review.  Please furnish a cover letter
with your amendments that keys your responses to our comments and
provides any requested supplemental information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendments and
responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;

* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

	We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

	We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement.  Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration.  Please provide this
request
at least two business days in advance of the requested effective
date.

	You may contact Melissa Rocha, staff accountant, at (202)
551-
3854 or Marc Thomas, senior staff accountant at (202) 551-3452 if
you
have questions regarding comments on the financial statements and
related matters.  Please call Adam Halper at (202) 551-3482 or
Sara
Kalin at (202) 551-3454 with any other questions.  If you need
further assistance, you may contact me at (202) 551-3730.

      Sincerely,


      Barbara C. Jacobs
      Assistant Director


cc:	Via Facsimile
      James Alterbaum
      Moses & Singer LLP
      1301 Avenue of the Americas
            New York, New York 10019
	Phone: (212) 554-7800
      Fax: (917) 206-4394
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Ion Networks, Inc.
May 20, 2005
Page 1