Contact:  Jim  Kerrigan
          Lantronix
          (949)  453-7115
          jimk@lantronix.com


                   LANTRONIX SETTLES U.S. SOFTWARE LITIGATION

     COMPANY CONTINUES PROGRESS IN RESOLVING OLD DISPUTES; WILL ISSUE STOCK

Irvine,  Calif.  (September  4,  2003)  -  Lantronix, Inc. (Nasdaq: LTRX), today
announced  that  the  company  has  reached  a  settlement of the securities and
employment claims brought by the founders of United States Software Corporation,
a  company  Lantronix  acquired  in  December  2000.

"We  are  pleased  to  have eliminated another old dispute from our plate, as we
continue  to  reposition  Lantronix for the future," said Marc Nussbaum, CEO and
President of Lantronix.  "I am especially pleased that we were able to use stock
to  resolve  the  matter and avoid a substantial cash settlement. We continue to
carefully  manage the company's cash while investing for long-term profitability
and  growth."

Under  terms of the settlement, Lantronix will release approximately $400,000 in
cash  and  49,038 shares of Lantronix stock already set aside in an escrow.  The
release  of  the cash and shares  from escrow does not reduce the company's cash
balance,  as the escrow was established and the cash and shares set aside at the
time  of the U.S. Software Acquisition in December 2000.  In addition, Lantronix
will  issue  additional  shares  of  common  stock  with  an  aggregate value of
approximately  $1.5  million  upon  receipt  of  court  approval  or,  in  the
alternative,  upon  registration  of  the newly issued shares, in exchange for a
complete  release  of  all  claims.  The  settlement  is  subject  to  certain
conditions,  which  may  be  waived  by  Lantronix.

The  company expects to take a one-time charge in connection with the settlement
arrangement  of  approximately  $1.5 million in its financial statements for the
fiscal  quarter  and year ended June 30, 2003, which the company expects to file
with  the Securities and Exchange Commission on Form 10-K on or before September
30,  2003.


ABOUT  LANTRONIX,  INC.

     Lantronix,  Inc.  (NASDAQ:  LTRX)  is  a  provider of hardware and software
solutions  ranging  from  systems  that  allow  users to remotely manage network
infrastructure  equipment  to  technologies  that  network-enable  devices  and
appliances.  Lantronix  was  established in 1989, and its worldwide headquarters
are  in  Irvine, Calif.  For more information, visit the company on the Internet
at  www.lantronix.com.

Lantronix  is  a  registered  trademark  of  Lantronix,  Inc.

                                     #  #  #

This  news  release  contains  forward-looking statements that involve risks and
uncertainties.  Actual  results  and  outcomes  may differ materially from those
discussed or anticipated. Factors that might affect actual outcomes include, but
are  not  limited to Lantronix' ability to cost-effectively resolve the lawsuits
and  the  SEC  investigation  that  are still pending. The company undertakes no
obligation  to  update  these  forward-looking  statements.  For a more detailed
discussion  of  these  and  associated  risks,  see  the  Company's  most recent
documents  filed  with  the  Securities  and  Exchange  Commission.