Artisoft Filing of Form 10-Q for Quarter Ended September 2004 Delayed; Company is Working to Integrate Revenue Recognition Policies of Recently Acquired Vertical Networks, Inc.

CAMBRIDGE, Mass. -- Artisoft, Inc. (OTC:ASFT.E), a leading provider of server based PBX, IP-PBX and call center products, today announced that it will have continued delays reporting its consolidated financial results and pro forma historical financial results for the Vertical Networks operations it acquired in September.

The Company's inability to file its required reports stems from unanticipated delays in properly integrating the revenue recognition policies of the Company and those of Vertical Networks, Inc., which was acquired on September 28, 2004. The primary factor in the delay in the filings is the time required to complete the necessary review and analysis of several large, inter-related multi-year contracts. This review and analysis is complex because each contract's deliverables may impact revenue recognition for the others. These contracts represent significant revenue to the Company in future quarters and significant revenue for Vertical Networks during prior periods. The Company anticipates that, regardless of the resolution of this issue, results from its first fiscal quarter will be consistent with the guidance previously provided in its press release dated December 2, 2004.

The Company is endeavoring to address these matters, to file its Form 8-K/A and to file its Form 10-Q as soon as practicable; however, the Company is not able at this time to determine a certain date by which it expects to file its Form 10-Q for the fiscal first quarter or its Form 8-K/A reporting financial information related to the acquisition of Vertical Networks.

The Company set a hearing with NASD for January 20, 2005 to explain the reasons for its delay in filing its Form 10-Q for the fiscal second quarter ended September 30, 2004, and its Form 8-K/A reporting the historical and pro forma financial results of the acquired operations. The Company anticipates that its stock will continue to be quoted on the NASD's over the counter bulletin board until the hearing date; although, we cannot assure you that the outcome of the hearing will be favorable to the Company.

About Artisoft

Artisoft, Inc. is a leading provider of server based PBX, IP-PBX and call center products that deliver enhanced communications capabilities to highly distributed large enterprises, medium-size businesses, branch offices, and call centers. Artisoft's innovative products have consistently garnered industry recognition, winning more than 40 awards for technical excellence. The Company distributes its products and services worldwide through select system integration partners, and a dedicated and growing channel of authorized resellers. For more information, please call 800-914-9985 or visit our website at http://www.artisoft.com.

Artisoft and TeleVantage and InstantOffice are registered trademarks of Artisoft, Inc. All other Company and product names mentioned may be trademarks or registered trademarks of the respective companies with which they are associated.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.

Statements regarding our delayed filings, the upcoming hearing regarding our continued listing on the over the counter bulletin board, the integration of the revenue recognition policies of Vertical Networks, Inc. with our own, our anticipated results for our first fiscal quarter, as well as other statements that are not historical facts are "forward-looking statements." These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements. These include, but are not limited to, uncertainties surrounding the upcoming appeal to avoid the de-listing of our stock; risks that our stock will no longer be eligible for quotation on the over the counter bulletin board; uncertainties relating to the time needed by us to complete the Form 10-Q and Form 8-K/A and by our independent auditors to complete their review of the Form 10-Q and Form 8-K/A; uncertainty as to when the Form 10-Q and Form 8-K/A will be filed; volatility in our stock price pending resolution or resulting from the matters discussed above; the volatility of telecommunications industry cycles; our ability to achieve forecasted revenues and maintain and improve gross margins, to reduce operating expenses, and to manage cash flows (and the timing and degree of any such improvements in gross margins, reductions in operating expenses and management of cash flows); failure to integrate in an efficient and timely manner acquired companies; failure to retain and attract key employees; and other factors more fully detailed in the company's annual report on Form 10-K for the year ended June 30, 2004.