/C O R R E C T I O N -- Fusion/

In the news release, Fusion Reports Third Quarter 2010 Results, issued 15-Nov-2010 by Fusion over PR Newswire, we are advised by the company that the tenth paragraph, second sentence, should read "When comparing the third quarter with the second quarter of 2010, we have achieved an improvement of 14.4% in total revenues, 7.0% in gross margin dollars and 22.0% in adjusted EBITDA" rather than "When comparing the third quarter with the second quarter of 2010, we have achieved an improvement of 15% in total revenues, 7% in gross margin dollars and 28% in adjusted EBITDA" as originally issued inadvertently. The complete, corrected release follows:

Fusion Reports Third Quarter 2010 Results

NEW YORK, Nov. 15, 2010 /PRNewswire-FirstCall/ -- Fusion (OTC Bulletin Board: FSNN) today announced financial results for the quarter ended September 30, 2010.

The Company reported consolidated revenues of $11.1 million for the quarter ended September 30, 2010, a decrease of 5.9% when compared to revenues of $11.8 million for the third quarter of 2009.  Third quarter 2010 revenues for the Carrier Services segment decreased 7.0% when compared to the third quarter of 2009, and third quarter 2010 revenues for the Corporate Services segment increased 44.6% when compared to the third quarter of 2009. This quarter was the eleventh consecutive quarter of consistent revenue growth for the Corporate Services segment.

Consolidated gross margin increased to 9.3% for the third quarter of 2010, compared to 8.3% for the third quarter of 2009. This margin increase resulted from stronger margins in the Carrier Services segment, where the gross margin increased from 7.5% to 8.1%, and from increased business volume in the Corporate Services segment, which achieved a gross margin of 38.0%.  

Selling, general, and administrative costs for the third quarter of 2010 were reduced by $77,000 or 3.4%, when compared to the third quarter of 2009.  This improvement was primarily attributable to the Company's continuing focus on cost-containment.

As a result of the Company's improved gross margin, and reduced SG&A expenses, its adjusted EBITDA loss (earnings before interest, taxes, depreciation, amortization, and specific non-recurring and non-cash adjustments) of ($0.9) million for the third quarter of 2010 was an 18.2% improvement from its third quarter 2009 adjusted EBITDA loss of ($1.1) million. These figures, which are adjusted for discontinued operations, do not reflect the full benefit of the Company's exiting the consumer business.

For the quarter ended September 30, 2010, Fusion reported a net loss applicable to common stockholders of ($1.4) million or ($0.01) per share, a $0.6 million decrease when compared to a net loss applicable to common stockholders of ($2.0) million or ($0.03) per share for the quarter ended September 30, 2009. This 30% decrease in net loss per share compared to the prior year period resulted from continued improvement in the financial results of the Company's continuing operations, the impact of its exit from the consumer business, and an increase in the total number of shares outstanding.

As of September 30, 2010, the Company had current assets of $3.2 million, compared to current assets of $2.9 million as of December 31, 2009, and total assets of $5.5 million, compared to total assets of $5.4 million as of December 31, 2009. These increases were primarily due to increased cash and cash equivalents, as well as increased accounts receivable.

Total stockholders' deficit at September 30, 2010 was ($6.6) million, compared to ($7.3) million as of December 31, 2009.  The change resulted from an increase in the accumulated deficit of $(4.4) million, offset by additional equity investments of $5.0 million. During the third quarter of 2010, Fusion raised approximately $1.2 million in new equity, and successfully converted approximately $0.2 million of existing debt to equity. The Company continues to seek additional equity and debt financing to fund its operations.

Commenting on the results, Matthew Rosen, Chief Executive Officer of Fusion, said, "I am particularly pleased with the continuing quarter over quarter growth in our Corporate Services segment and our significant improvement in overall gross margin. The combination of our ongoing focus on cost containment, improved margin performance and an almost 45% growth in corporate services revenue compared with the same period in 2009, demonstrates our continuing progress in meeting our financial objective of achieving profitability."

Expanding on Mr. Rosen's comments, Don Hutchins, President and Chief Operating Officer, said, "In addition to our strong quarter over quarter growth in corporate services and improvement in adjusted EBITDA, we are proud of the financial improvements we have made since our last quarter.  When comparing the third quarter with the second quarter of 2010, we have achieved an improvement of 14.4% in total revenues, 7.0% in gross margin dollars and 22.0% in adjusted EBITDA."

Use of Non-GAAP Financial Measures:

The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to analyze companies on the basis of operating performance and leverage. The Company also believes that EBITDA provides investors with a measure of the Company's operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions.  Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant nonrecurring transactions, such as impairment losses associated with divested businesses and forgiveness of debt, which vary significantly between periods and are not recurring in nature. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and Adjusted EBITDA are not intended to represent cash flows for the period presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Generally Accepted Accounting Principles (GAAP).  Consistent with the SEC Regulation G, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measure, which can be viewed under the heading "Reconciliation of Net Income (Loss) to Adjusted EBITDA", immediately following the Consolidated Statements of Operations included in this press release.

Statements in this press release that are not purely historical facts, including statements regarding Fusion's beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, introduction of products in a timely fashion, market acceptance of new products, cost increases, fluctuations in and obsolescence of inventory, price and product competition, availability of labor and materials, development of new third-party products and techniques that render Fusion's products obsolete, delays in obtaining regulatory approvals, potential product recalls, securing necessary funding and litigation. Risk factors, cautionary statements and other conditions which could cause Fusion's actual results to differ from management's current expectations are contained in Fusion's filings with the Securities and Exchange Commission and available through http://www.sec.gov

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FUSION   Philip Turits, Treasurer

CONTACT: 212-201-2407

         pturits@fusiontel.com






FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS



                           Three Months Ended         Nine Months Ended

                           September 30,              September 30,

                           2010         2009          2010         2009

Revenues                   $ 11,149,973 $ 11,853,020  $ 30,465,806 $ 29,505,082

Operating expenses:

 Cost of revenues          10,108,777   10,865,824    27,526,331   27,291,855

 Depreciation and
 amortization              198,106      304,121       637,891      1,020,536

 Loss on Impairment        -            -             -            243,000

 Selling, general and
 administrative expenses   2,202,399    2,279,704     6,594,291    6,992,151

 Advertising and Marketing 15,358       4,006         36,554       14,518

 Total operating expenses  12,524,640   13,453,655    34,795,067   35,562,060

Operating loss             (1,374,667)  (1,600,635)   (4,329,261)  (6,056,978)



Other income (expense)

 Interest income
 (expense), net            (42,521)     (109,445)     (146,585)    (324,617)

 Gain on
 extinguishment/settlement
 of debt                   150,000      -             159,500      -

 Other                     10,161       1,991         18,890       5,485

 Total other income
 (expense)                 117,640      (107,454)     31,805       (319,132)

Loss from continuing
operations                 (1,257,027)  (1,708,089)   (4,297,456)  (6,376,110)



Income (Loss) from
discontinued operations    6,224        (102,900)     (82,132)     (1,467,843)



                           $            $             $            $
Net loss                   (1,250,803)  (1,810,989)   (4,379,588)  (7,843,953)



Loss applicable to Common
Stockholders:

 Loss from continuing      $            $             $            $
 operations                (1,257,027)  (1,708,089)   (4,297,456)  (6,376,110)

 Preferred stock dividends
 in arrears                (147,099)    (161,214)     (436,501)    (478,386)

 Net loss from continuing
 operations applicable to
 Common Stockholders:      (1,404,126)  (1,869,303)   (4,733,957)  (6,854,496)

 Income (Loss) from
 discontinued operations   6,224        (102,900)     (82,132)     (1,467,843)

Net loss applicable to     $            $             $            $
common stockholders        (1,397,902)  (1,972,203)   (4,816,089)  (8,322,339)

Basic and diluted net loss
per common share:

 Loss from continuing
 operations                $ (0.01)     $ (0.03)      $ (0.04)     $ (0.12)

 Loss from discontinued
 operations                0.00         (0.00)        (0.00)       (0.03)

Net loss applicable to
Common Stockholders        $ (0.01)     $ (0.03)      $ (0.04)     $ (0.14)

Weighted average common
shares outstanding:

 Basic and diluted         125,861,331  67,663,257    110,401,741  57,568,953






FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET



                                         September 30, 2010  December 31, 2009

ASSETS

Current assets

 Cash and cash equivalents               $ 257,488           $ 99,019

 Accounts receivable, net of allowance   2,795,624           2,500,319

 Restricted cash, current portion        -                   168,176

 Prepaid expenses and other current
 assets                                  172,687             130,647

 Assets held for sale                    4,554               6,513

 Assets of Discontinued Operations       15,447              32,283

  Total current assets                   3,245,800           2,936,957

Property and equipment, net              1,224,864           1,664,583

Other assets

 Security deposits                       33,106              23,008

 Restricted cash, net of current portion 533,437             248,390

 Intangible assets, net                  438,330             489,294

 Other assets                            54,009              62,119

  Total other assets                     1,058,882           822,811

TOTAL ASSETS                             $ 5,529,546         $ 5,424,351



LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

 Long-term debt, current portion         $ 2,525,470         $ 2,407,187

 Capital and equipment financing lease
 obligations, current portion            8,045               14,831

 Escrow Payable                          155,000             321,418

 Accounts payable and accrued expenses   8,813,220           9,263,872

 Liabilities of discontinued operations  230,274             360,294

  Total current liabilities              11,732,009          12,367,602

Long-term liabilities

 Capital and equipment financing lease
 obligations, net of current portion     -                   2587

 Other long-term liabilities             444,322             336,815

  Total long-term liabilities            444,322             339,402



Stockholders' equity

 Preferred stock, Class A-1, A-2, A-3 &
 A-4                                     73                  80

 Common stock                            1,320,106           925,440

 Capital in excess of par value          135,605,562         130,984,766

 Accumulated deficit                     (143,572,526)       (139,192,939)

  Total stockholders' equity             (6,646,785)         (7,282,653)

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY                                   $ 5,529,546         $ 5,424,351






FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES



RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA





                       Three Months Ended           Nine Months Ended

                       September 30,                September 30,

                       2010          2009           2010          2009



Net Loss               $ (1,250,803) $ (1,810,989)  $ (4,379,588) $ (7,843,953)



Loss from discontinued
operations             (6,224)       102,900        82,132        1,467,843

Loss from continuing
operations             (1,257,027)   (1,708,089)    (4,297,456)   (6,376,110)

Adjustments:

Interest (income)
expense, net           42,521        109,445        146,585       324,617

Depreciation and
amortization           198,106       304,121        637,891       1,020,536

Loss on impairment     -             -              -             243,000

EBITDA                 (1,016,400)   (1,294,523)    (3,512,980)   (4,787,957)

Adjustments:

(Gain)/loss on
disposal of fixed
assets                 -             -              -             -

Communication charges  -             -              -             -

Other taxes            34,505        40,321         110,097       92,746

Non cash compensation  101,897       145,145        238,942       264,912

Adjusted EBITDA        $ (879,998)   $ (1,109,057)  $ (3,163,941) $ (4,430,299)





SOURCE Fusion