Item 8.01 Other Events

On October 26, 2009, there was a development in the legal proceeding involving Xfone 018 Ltd. ("Xfone 018"), a 69% owned Israel based subsidiary of Xfone, Inc. (the "Company") and Omer Fleisig.

Background

As previously disclosed, on December 16, 2008, Omer Fleisig filed a request to approve a claim as a class action (the "Class Action Request") against Xfone 018, and Israel 10 - Shidury Haruts Hahadash Ltd., an entity unrelated to the Company ("Israel 10"), in the District Court in Petach Tikva, Israel (the "Israeli Court"). Fleisig attempted to participate in a television call-in game show, which was produced by Israel 10, using Xfone 018's international telecom services. The claim alleged that although Fleisig's two attempts to participate in the show were unsuccessful because he received a busy signal when trying to call in, he was billed by Xfone 018 for both attempts. Fleisig sought damages for the billed attempts. He was billed 10 NIS (approximately $2.70) for the calls. The Class Action Request stated total damages of NIS 24,750,000 (approximately $ 6,689,189) which reflects Fleisig's estimation of damages caused to all participants in the game show which (pursuant to the Class Action Request) allegedly received a busy signal while trying to call in to the game during a certain period defined in the Class Action Request.

Recent Development

On October 28, 2009, Xfone 018 was informed that on October 26, 2009, the Israeli Court approved Mr. Fleisig's request to withdraw both his personal claim against Xfone 018 and the Class Action Request. Mr. Fleisig's personal claim was dismissed with prejudice, and the Class Action Request was dismissed without prejudice. The Israeli Court did not award any fees or expenses to either party.