Acceris Communications Reports Fiscal Year 2004 Results.

PITTSBURGH -- Acceris Communications Inc. (OTCBB:ACRS) today reported its financial results for the year ended December 31, 2004.

For the year ended December 31, 2004, the Company's total operating revenue was $113.1 million compared to $135.9 million in 2003. The Company had a loss from continuing operations of $22.9 million compared to a loss from continuing operations of $32.0 million for the year ended December 31, 2004. The Company recorded a net loss of $22.8 million for the year ended December 31, 2004 versus a net loss of $31.4 million for the year ended December 31, 2003. The net loss per common share was $1.18 in 2004 versus a net loss per common share of $4.48 in 2003.

Highlights of 2004:

- The Company reduced its loss from continuing operations in 2004 compared to 2003 through integration initiatives. The Company's operations during 2004 were negatively impacted by the decision, in mid 2004, to halt geographic expansion of its local dial tone offering as a direct result of regulatory uncertainty in the domestic markets. In 2005, the Company suspended efforts to acquire new local dial tone customers, but will continue to service its existing local customers. The Company may re-enter the market when it can enter into acceptable wholesale agreements.

- Acceris' ongoing operating losses were funded in 2004 by Counsel Corporation under its Keep Well agreement, from the proceeds on the sale of shares held in Buyers United Inc. and from the issuance of a $5 million convertible three-year term note. Acceris will require additional funding in 2005 to continue to execute on its business plan. Counsel's Keep Well with Acceris expires on June 30, 2005 and is not expected to be extended beyond its current maturity.

- Significant structural changes continue to occur in both the International and US telecommunications markets. Based on the extent and the pace of these changes, coupled with financial constraints, Acceris has concluded that it should consider opportunities to merge or dispose of its telecommunications operations.

- Acceris Communications Technologies was granted a patent by the State Intellectual Property Office of the People's Republic of China for its proprietary technology that enables Voice over Internet Protocol ("VoIP") communications. Acceris' international patent portfolio and pending applications are founded on what Acceris believes to be seminal patents in VoIP (US Patent no. 6243373 and US Patent no. 6438124).

- Using its patented technology and platform, Acceris launched an enhanced services product that includes features such as find-me/follow-me, on-the-fly conferencing, unified voicemail and message distribution. Acceris plans to expand its offerings and utilize its patented technology to offer a competitive VoIP solution to the marketplace.

- Acceris Communications Technologies initiated litigation to protect its VoIP patent rights while, at the same time, pursuing a licensing program for its intellectual property.

- Acceris became involved in shareholder litigation in 2004, the details of which are disclosed in the Form 10K filed with the Securities and Exchange Commission. The Company believes that these claims are without merit and intends to continue to vigorously defend these actions.

"Acceris' traditional long distance telephone business requires greater scale to effectively compete. Given the significant changes that are occurring in the industry, a merger or disposal of our telecommunications business is a logical step. As well, Acceris must focus its resources on deriving value from its significant investment in VoIP technology. Acceris owns an international portfolio of VoIP patents, has a history of providing VoIP networks and services, and has built and developed its internal VoIP expertise. By doing so, we will be in a better position to generate shareholder value." said Kelly Murumets, President of Acceris Communications.

Please see the Company's Annual Report on Form 10-K for the year ended December 31, 2004 filed with the SEC for further information.

About Acceris

Acceris is a broad based communications company serving residential, small and medium-sized business and large enterprise customers in the United States. A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services. Acceris offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing and commercial agent programs. Acceris also offers a proven network convergence solution for voice and data in Voice over Internet Protocol ("VoIP") communications technology and holds two foundational patents in the VoIP space. For further information, please visit Acceris' website at www.acceris.com.

Forward-Looking Statements

This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended, that are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may," "will," "anticipate," "believe," "estimate," "expect," "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted in our securities and other regulatory filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation and do not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements.

ACCERIS COMMUNICATIONS INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands of dollars, except share     December 31,  December 31,
 and per share amounts)                           2004          2003
--------------------------------------     ------------  ------------

                               ASSETS

Current assets:
 Cash and cash equivalents                       $ 458       $ 2,033
 Accounts receivable, less allowance
  for doubtful accounts of $2,163 and
  $1,764 at December 31, 2004 and 2003,
  respectively                                  13,079        18,018
 Investment in preferred and common stock            -         2,058
 Other current assets                            1,473         2,202
                                           ------------  ------------
  Total current assets                          15,010        24,311
Furniture, fixtures, equipment and
 software, net                                   4,152         8,483
Other assets:
 Intangible assets, net                          1,404         3,297
 Goodwill                                        1,120         1,120
 Investment in preferred stock                   1,100         1,100
 Other assets                                    1,223           743
                                           ------------  ------------

  Total assets                                $ 24,009      $ 39,054
                                           ------------  ------------
                                           ------------  ------------

     LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
 Revolving credit facility                     $ 4,725      $ 12,127
 Accounts payable and accrued liabilities       27,309        29,113
 Unearned revenue                                  959         5,678
 Current portion of notes payable                1,928         1,254
 Current portion of obligations under
  capital leases                                 1,441         2,715
                                           ------------  ------------
  Total current liabilities                     36,362        50,887
Notes payable, less current portion              3,597           772
Obligations under capital leases, less
 current portion                                     -         1,631
Notes payable to a related party                46,015        28,717
                                           ------------  ------------
  Total liabilities                             85,974        82,007
                                           ------------  ------------

Stockholders' deficit:
 Preferred stock, $10.00 par value,
  authorized 10,000,000 shares, issued and
  outstanding 618 and 619 Class N shares
  at December 31, 2004 and 2003,
  resepectively; liquidation preference of
  $618 and $619 at December 31,2004 and
  2003, respectively                                 6             6
 Common stock, $0.01 par value, authorized
  300,000,000 shares, issued and outstanding
  19,237,135 and 19,262,095 at December 31,
  2004 and 2003, respectively                      192           192
 Additional paid-in capital                    186,671       182,879
 Accumulated deficit                          (248,834)     (226,030)
                                           ------------  ------------
  Total stockholders' deficit                  (61,965)      (42,953)
                                           ------------  ------------
  Total liabilities and stockholders'
   deficit                                    $ 24,009      $ 39,054
                                           ------------  ------------
                                           ------------  ------------

The notes contained in our Annual Report on Form 10-K are an integral
part of these condensed consolidated financial statements



                 ACCERIS COMMUNICATIONS INC AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     for the Three and Twelve Months Ended December 31, 2004 and 2003

                          Three Months Ended     Twelve Months Ended
                                 December 31,            December 31,
(In thousands of dollars, -------------------------------------------
 except per share amounts)   2004       2003        2004        2003
------------------------- --------  ---------    ---------  ---------
                       (unaudited)(unaudited)
Revenues:
 Telecommunications
  services               $ 24,063   $ 32,401   $ 112,595   $ 133,765
 Technology licensing
  and development              --         65         540       2,164
                         --------   --------   ---------   ----------
  Total revenues           24,063     32,466     113,135     135,929
                         --------   --------   ---------   ----------
Operating costs and
 expenses:
 Telecommunications
  network expense
  (exclusive of
  depreciation expense
  on telecommunications
  network assets of
  $1,195 and $820 for
  the three months ended
  December 31, 2004 and
  2003, respectively, and
  $5,056 and $3,918 for
  the twelve months ended
  December 31, 2004 and
  2003, respectively,
  included in
  depreciation and
  amortization below)     12,606      18,866      60,067      86,006
 Selling, general and
  administrative          11,601      14,441      54,430      57,264
 Provision for doubtful
  accounts                 1,321       1,666       5,229       5,438
 Research and development    217          --         442          --
 Depreciation and
  amortization             2,099       1,548       6,976       7,125
                         --------   --------   ---------   ----------
  Total operating costs
   and expenses           27,844      36,521     127,144     155,833
                         --------   --------   ---------   ----------
Operating loss            (3,781)     (4,055)    (14,009)    (19,904)
                         --------   --------   ---------   ----------
Other income (expense):
 Interest expense         (2,768)     (3,562)    (11,349)    (13,269)

 Interest and other
  income                      57       1,160       2,471       1,216
                         --------   --------   ---------   ----------
  Total other income
   (expense)              (2,711)     (2,402)     (8,878)    (12,053)
                         --------   --------   ---------   ----------
Loss from continuing
 operations               (6,492)     (6,457)    (22,887)    (31,957)

Gain from discontinued
 operations (net of
 $0 tax)                      --         222         104         529
                         --------   --------   ---------   ----------
   Net loss             $ (6,492)   $ (6,235)  $ (22,783)  $ (31,428)
                         --------   --------   ---------   ----------
                         --------   --------   ---------   ----------

Basic and diluted
 weighted average shares
 outstanding              19,237      10,504      19,256       7,011

Net loss per common
 share - basic and
 diluted:
 Loss from continuing
  operations             $ (0.34)    $ (0.60)    $ (1.19)    $ (4.56)
 Gain from discontinued
  operations                  --        0.01        0.01        0.08
                         --------   --------   ---------   ----------
  Net loss per common
   share                 $ (0.34)    $ (0.59)    $ (1.18)    $ (4.48)
                         --------   --------   ---------   ----------
                         --------   --------   ---------   ----------

The notes contained in our Annual Report on Form 10-K are an integral
part of these condensed consolidated financial statements

Acceris Communications Inc. (OTC Bulletin Board:ACRS) (TSX:CXS)