8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)      August 23, 2012 (August 20, 2012)

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-32421	58-2342021
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

420 Lexington Avenue, Suite 1718 New York, NY	10170
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (212) 201-2400

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ]           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02          Results of Operations and Financial Condition.

Item 7.01          Regulation FD Disclosure.

On August 20, 2012, Fusion Telecommunications International, Inc., (the "Company"), issued a press release entitled “Fusion Reports Second Quarter 2012 Results”, pertaining to its financial results for the fiscal quarter ended June 30, 2012.

The press release attached as Exhibit 99.1 to this report is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01           Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release issued by Fusion Telecommunications International Inc., dated August 20, 2012, entitled “Fusion Reports Second Quarter 2012 Results.”

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.

	Fusion Telecommunications International, Inc.
	By: /s/ Gordon Hutchins, Jr.
	Gordon Hutchins, Jr.
August 23, 2012	as President, Chief Operating Officer and Acting Chief Financial Officer

3

INDEX TO EXHIBITS

99.1 Press Release issued by Fusion Telecommunications International Inc., dated August 20, 2012, entitled “Fusion Reports Second Quarter 2012 Results.”

4

EX-99.1

Exhibit 99.1

FUSION	Philip Turits
CONTACT:	212-201-2407
	pturits@fusiontel.com

Fusion Reports Second Quarter 2012 Results

NEW YORK, August  20, 2012 - Fusion Telecommunications International, Inc. (OTCQB: FSNN) has announced financial results for the second quarter ended June 30, 2012.

Fusion reported consolidated revenues of $10.2 million for the quarter ended June 30, 2012; a decrease of 4.0% when compared to revenues of $10.6 million for the quarter ended June 30, 2011. The decrease over the prior year was attributable to a 4.5% decrease in revenues in the Carrier Services segment, as the increase in the volume of traffic terminated over the Company’s network was more than offset by a lower average rate per minute.  Fusion also reported revenues of $0.6 million in the Corporate Services segment for the quarter ended June 30, 2012, an increase of 5.5%.

Consolidated gross margin increased to 10.9% for the second quarter of 2012 as compared to 7.8% for the second quarter of 2011.  The increase in consolidated gross margin for the quarter was primarily due to stronger gross margins in the Carrier Services segment, where the gross profit contribution increased by 32.5% over the quarter ended June 30, 2011, due to improved real-time monitoring of its route optimization practices.

Selling, general and administrative expenses (“SG&A”) increased by 12.5% in the second quarter of 2012 compared to the same period of a year ago.  The increase is largely due to professional fees associated with the NBS transaction and higher stock based compensation expense.    

Fusion reported a net loss of $1.2 million for the quarter ended June 30, 2012, which is essentially unchanged from the quarter ended June 30, 2011.  For the second quarter of 2012 and 2011, the net loss applicable to common stockholders was $1.3 million, or $0.01 per share.

For the quarter ended June 30, 2012, adjusted EBITDA loss (earnings from continuing operations before interest, taxes, depreciation, amortization, and specific non-recurring and non-cash adjustments) decreased $0.1 million, or 12.3%, to $0.9 million, compared to $1.0 million for the quarter ended June 30, 2011.

As of June 30, 2012 and December 31, 2011, the Company had current assets of $2.8 million. Current liabilities as of June 30, 2012 were $15.4 million compared to $14.8 million at December 31, 2011.  Stockholders' deficit at June 30, 2012 and December 31, 2011 was $11.2 million and $10.6 million, respectively.

Commenting on the second quarter results, Matthew Rosen, Chief Executive Officer of Fusion, said, “In addition to our improved margin and EBITDA performance, the company also made significant progress toward the acquisition of NBS, a $26.5 million corporate voice, data and cloud solutions business. We believe this important acquisition will complement our own organic growth, deliver a strong foundation on which to build revenue and earnings, and achieve our profitability objectives.  Additionally, the company further advanced the development of its vertical cloud services market strategy, with initial focus on the burgeoning healthcare industry.”

Expanding on Mr. Rosen’s comments, Don Hutchins, President and Chief Operating Officer of Fusion, said, “The NBS acquisition will expand our back-office infrastructure with strong operating, customer support and distribution management systems to accelerate the pace of revenue and margin growth.  We further expect to benefit from anticipated synergies resulting from the integration of the two companies, as well as the opportunity to cross-sell and up-sell customers based on our expanded product and service portfolio.” 

Use of Non-GAAP Financial Measurements:

The Company believes that EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to evaluate 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 non-recurring transactions, if any, such as impairment losses and professional fees associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as stock-based compensation.  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”).  In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading "Reconciliation of Net Loss to EBITDA and Adjusted EBITDA", immediately following the Consolidated Balance Sheets included in this press release.

Forward Looking Statements:

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 1996. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as “may”, “expect”, “anticipate”, “intend”, “estimate” or “continue” or the negative thereof or other variations thereof or comparable terminology. The reader is cautioned that all forward-looking statements are speculative, and there are certain risks and uncertainties that could cause actual events or results to differ from those referred to in such forward-looking statements. This disclosure highlights some of the important risks regarding the Company’s business. The primary risk of the Company is its ability to raise new and continued capital to execute its comprehensive business strategy. There may be additional risks associated with the integration of businesses following an acquisition, concentration of revenue from one source, competitors with broader product lines and greater resources, emergence into new markets, the termination of any of the Company’s significant contracts or partnerships, the Company’s inability to maintain working capital requirements to fund future operations or the Company’s inability to attract and retain highly qualified management, technical and sales personnel,  and the other factors identified by us from time to time in the Company’s filings with the Securities and Exchange Commission, which are available through http://www.sec.gov.  However, the risks included should not be assumed to be the only things that could affect future performance. We may, among other things, also be subject to service disruptions, delays in collections, or facilities closures caused by potential or actual acts of terrorism or government security concerns.

Fusion Telecommunications International, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues	$	10,219,436		$	10,643,036		$	21,754,140		$	20,847,316
Cost of revenues		8,963,789			9,655,765			19,008,549			18,801,395
Gross profit		1,255,647			987,271			2,745,591			2,045,921
Operating expenses:
Depreciation and amortization		93,954			148,530			192,177			317,068
Selling general and administrative expenses		2,256,676			2,005,991			4,301,493			4,166,744
Advertising and marketing		1,709			819			8,033			5,382
Total operating expenses		2,352,339			2,155,340			4,501,703			4,489,194
Operating loss		(1,096,692	)		(1,168,069	)		(1,756,112	)		(2,443,273	)
Other (expenses) income:
Interest expense, net of interest income		(46,534	)		(55,725	)		(103,616	)		(104,012	)
Other		(91,394	)		21,134			(160,843	)		109,829
Total other (expenses) income		(137,928	)		(34,591	)		(264,459	)		5,817
Loss from continuing operations		(1,234,620	)		(1,202,660	)		(2,020,571	)		(2,437,456	)
Discontinued operations:
Income from discontinued operations		-			152			-			8,364
Net loss	$	(1,234,620	)	$	(1,202,508	)	$	(2,020,571	)	$	(2,429,092	)
Preferred stock dividends in arrears		(100,349	)		(122,816	)		(200,698	)		(266,717	)
Net loss applicable to
common stockholders:	$	(1,334,969	)	$	(1,325,324	)	$	(2,221,269	)	$	(2,695,809	)
Basic and diluted loss per common share:
Loss from continuing operations	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Loss from discontinued operations		-			0.00			-			0.00
Loss per common share	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average common
shares outstanding:
Basic and diluted		165,875,657			139,666,939			162,932,029			136,151,459

Fusion Telecommunications International, Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30, 2012			December 31,  2011
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	798,167		$	3,047
Accounts receivable, net of allowance		1,499,313			2,400,427
Prepaid expenses and other current assets		529,970			388,343
Total current assets		2,827,450			2,791,817
Property and equipment, net		781,927			831,402
Other assets:
Security deposits		437,141			437,141
Restricted cash		302,681			299,536
Intangible assets, net		107,474			165,578
Other assets		32,901			31,494
Total other assets		880,197			933,749
TOTAL ASSETS	$	4,489,574		$	4,556,968
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Promissory notes payable - non-related parties	$	468,966		$	292,039
Promissory notes payable - related parties		4,898,364			4,922,364
Accounts payable and accrued expenses		9,164,031			9,448,981
Escrow payable		775,000			-
Current liabilities from discontinued operations		96,345			97,835
Total current liabilities		15,402,706			14,761,219
Long-term liabilities:
Other long-term liabilities		327,732			380,243
Total long-term liabilities		327,732			380,243
Commitments and contingencies
Stockholders' deficit:
Preferred stock		50			50
Common stock		1,664,322			1,537,113
Capital in excess of par value		138,562,459			137,325,467
Accumulated deficit		(151,467,695	)		(149,447,124	)
Total stockholders' deficit		(11,240,864	)		(10,584,494	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	4,489,574		$	4,556,968

Fusion Telecommunications International, Inc. and Subsidiaries

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net loss	$	(1,234,620	)	$	(1,202,508	)	$	(2,020,571	)	$	(2,429,092	)
Income from discontinued operations		-			(152	)		-			(8,364	)
Interest expense and other financing costs,
net of interest income		140,195			55,725			272,430			104,012
Depreciation and amortization		93,954			148,530			192,177			317,068
EBITDA		(1,000,471	)		(998,405	)		(1,555,964	)		(2,016,376	)
Acquisition transaction expenses		70,956			-			87,262			-
Non-cash adjustment to tax accruals		-			-			(98,141	)		-
Stock-based compensation expense		62,186			9,706			69,182			33,387
Adjusted EBITDA	$	(867,329	)	$	(988,699	)	$	(1,497,661	)	$	(1,982,989	)