VANCOUVER, March 14 /PRNewswire-FirstCall/ -- CounterPath
Corporation (OTCBB: COPA), a leading provider of desktop and mobile
VoIP software products and solutions, today announced financial and
operating results for the third quarter ended January 31, 2008.
Recent financial and operating highlights include: - Record
quarterly revenues of $2.6 million for the third quarter of fiscal
2008 compared to $1.0 million for the third quarter of fiscal 2007
and $2.4 million for the second quarter of fiscal 2008. -
Acquisition of FirstHand Technologies Inc., an innovator in
extending enterprise telephony features to smartphones and
dual-mode handheld devices over WiFi and cellular networks.
FirstHand's products are backed by eleven patents either pending or
granted. The acquisition allows CounterPath to combine its suite of
softphone and server applications with Fixed Mobile Convergence
(FMC) solutions from FirstHand to deliver an integrated
communications experience and empower workforces to go mobile. -
Acquisition of BridgePort Networks, Inc., a leading innovator in
Fixed Mobile Convergence (FMC) solutions for service providers.
BridgePort's products, which include the NomadicONE(TM) Network
Convergence Gateway (NCG) and NomadicONE IMS Convergence Server
(ICS), are backed by eighteen patents either pending or granted.
The addition of carrier-class FMC solutions to its VoIP softphone
and enterprise offerings immediately broadens the Company's market
reach. "The third quarter was a strategic one for CounterPath. Two
acquisitions were completed in the quarter to position the Company
as a serious player in the move worldwide to Fixed Mobile
Convergence (FMC) services, while at the same time, we maintained
our overall revenue growth," said Greg Pelling, Chief Executive
Officer of CounterPath. "There is an increasing demand for
innovative FMC solutions providing seamless connectivity between
fixed and wireless telecommunications networks. Our extensive
client base of world-class service providers and technology vendors
require these solutions to deliver high-value services to small and
medium enterprises and consumers. In other words, we can now
provide a complete end to end solution with our softphone
applications running on a personal computer and optimized to work
in conjunction with a mobile phone, enabling end users to easily
switch between the two devices. We are the only source for SIP
softphone solutions which combine voice, text messaging,
multimedia, video and presence-based consumer and enterprise
applications for virtually any network - fixed or mobile. These
acquisitions enable us to leverage our extensive customer base and
support our growth plans for fiscal 2009," concluded Pelling.
Financial Results - (Unaudited) (All amounts in U.S. dollars and in
accordance with accounting principles generally accepted in the
United States ("GAAP") unless otherwise specified. Consolidated
financial results include the financial results of NewHeights
Software Corporation from August 2, 2007 but do not include
financial results for FirstHand Technologies Inc. and BridgePort
Networks, Inc. both of which were acquired after the end of third
quarter of fiscal 2008.) For the third quarter of fiscal 2008,
revenue was $2.6 million compared to $1.0 million for the third
quarter of fiscal 2007. Software revenue for the quarter was $1.7
million compared to $653,332 for the same period last year. Service
revenue for the quarter was $935,934 compared to $354,250 for the
third quarter of fiscal 2007. Operating expenses for the third
quarter of fiscal 2008 were $4.9 million compared to $2.0 million
for the third quarter of fiscal 2007. The increase in operating
expenses was primarily due to the addition of cash and non-cash
operating expenses related to the acquisition of NewHeights and
employee growth in the Company. Operating expenses include a
non-cash charge of $303,931 from amortization of intangible assets
acquired from NewHeights and a non-cash $298,704 stock-based
compensation expense. Sales and marketing expenses were $1.0
million for the third quarter of fiscal 2008 compared to $409,856
for the same period last year. For the current quarter, research
and development expenses were $1.5 million and general and
administrative expenses were $1.6 million, compared to $647,664 and
$581,446, respectively, for the same period last year. The net loss
for the third quarter of fiscal 2008 was $2.2 million, or $(0.02)
per share, compared to a net loss of $1.3 million, or $(0.04) per
share recorded for the third quarter of fiscal 2007. The Company
closed the quarter with $3.1 million in cash, compared to $1.7
million at the end of the fiscal year on April 30, 2007. At the end
of the third fiscal quarter of 2008, the Company's working capital
was $4.3 million, compared to $1.9 million at the end of the fiscal
year on April 30, 2007. About CounterPath CounterPath Corporation
is a leading provider of innovative desktop and mobile VoIP
software products and solutions. The Company's product suite
includes SIP-based softphones, server applications and Fixed Mobile
Convergence (FMC) solutions that enable service providers,
enterprises and Original Equipment Manufacturers (OEM) to
cost-effectively integrate voice, video, presence and Instant
Messaging (IM) applications into their VoIP offerings and extend
functionality across both fixed and mobile networks. CounterPath's
customers include some of the world's largest telecommunications
service providers and network equipment providers including
AT&T, Verizon, BT (British Telecommunications PLC), Deutsche
Telekom, Cisco Systems, Mitel and Nortel. Visit
http://www.counterpath.com/. Forward-Looking Statements This news
release contains "forward-looking statements". Statements in this
news release, which are not purely historical, are forward-looking
statements and include any statements regarding beliefs, plans,
expectations or intentions regarding the future. It is important to
note that actual outcomes and the Company's actual results could
differ materially from those in such forward-looking statements.
Actual results could differ from those projected in any
forward-looking statements due to numerous factors. Such factors
include, among others: (1) the failure to successfully integrate
the businesses of CounterPath, FirstHand Technologies Inc.
("FirstHand") and BridgePort Networks, Inc. ("BridgePort") (2) the
failure to develop new and innovative products using the Company's
and FirstHand's and BridgePort's technologies, (3) the Company's
ability to remain competitive as other parties develop and release
competitive products, (4) the Company's ability to retain the
employees necessary to continue research and development of current
and new products, (5) the success by the Company of the sales of
its current and new products, (6) the impact of competitive
products on the sales of the Company's products, (7) the impact of
technology changes on the Company's products and on the VoIP
industry, (8) the compatibility of the Company's products with new
computer operating systems, (9) the rate of adoption by service
providers and the general public of VoIP as a replacement for
regular and cellular phone service, (10) general economic
conditions as they affect CounterPath and its prospective
customers, (11) the ability of the Company to control costs
operating, general administrative and other expenses, and (12)
insufficient investor interest in the Company's securities which
may impact on the Company's ability to raise additional financing
as required. Readers should also refer to the risk disclosures
outlined in the Company's quarterly reports on Form 10-QSB, annual
reports on Form 10-KSB and the Company's other disclosure documents
filed from time-to-time with the Securities and Exchange
Commission. (TABLES TO FOLLOW) COUNTERPATH CORPORATION (Formerly
CounterPath Solutions, Inc.) INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS (Stated in U.S. Dollars) January 31, April 30, 2008 2007
------------ ------------ (Unaudited) Assets Current assets: Cash $
3,079,584 $ 1,680,220 Accounts receivable (net of allowance for
doubtful accounts of $197,922 and $56,817 respectively) 3,932,699
1,924,899 Prepaid expenses and deposits 546,613 129,534
------------ ------------ Total current assets 7,558,896 3,734,653
Deposits 403,615 74,613 Equipment 388,437 276,599 Intangible assets
(net of accumulated amortization of $599,162 and $nil) 5,533,770 -
Investment tax credits recoverable 233,582 - Goodwill 6,727,744 -
Other assets 129,494 25,716 ------------ ------------ Total Assets
$20,975,538 $ 4,111,581 ------------ ------------ ------------
------------ Liabilities and Stockholders' Equity (Capital Deficit)
Current liabilities: Accounts payable and accrued liabilities $
2,496,182 $ 1,314,083 Due to related parties 20,853 25,417 Unearned
revenue 658,189 408,188 Customer deposits 23,351 5,615 Warranty
payable 105,404 83,769 ------------ ------------ Total current
liabilities 3,303,979 1,837,072 Convertible debentures - 3,369,230
Unrecognized tax benefit 332,157 - ------------ ------------ Total
liabilities 3,636,136 5,206,302 Stockholders' equity (capital
deficit): Preferred stock, $0.001 par value Authorized: 100,000,000
Issued and outstanding: January 31, 2008 - 1; April 30, 2007 - Nil
- - Common stock, $0.001 par value Authorized: 415,384,500 Issued
and outstanding: January 31, 2008 - 95,108,887; April 30, 2007 -
37,940,983 95,109 37,941 Additional paid-in capital 28,982,590
4,820,069 Accumulated deficit (12,823,439) (5,872,151) Accumulated
other comprehensive income (loss) - currency translation adjustment
1,085,142 (80,580) ------------ ------------ Total stockholders'
equity (capital deficit) 17,339,402 (1,094,721) ------------
------------ Liabilities and Stockholders' Equity $20,975,538 $
4,111,581 ------------ ------------ ------------ ------------
COUNTERPATH CORPORATION (Formerly CounterPath Solutions, Inc.)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (Stated in U.S. Dollars) (Unaudited) Three
Months Ended Nine Months Ended January 31, January 31,
--------------------------- --------------------------- 2008 2007
2008 2007 ------------- ------------- ------------- -------------
Revenue: Software $ 1,698,829 $ 653,332 $ 4,509,969 $ 3,339,116
Service 935,934 354,250 1,796,295 1,102,140 -------------
------------- ------------- ------------- Total revenue 2,634,763
1,007,582 6,306,264 4,441,256 Operating expenses: Cost of sales
(includes amortization of intangibles of $303,931 and $599,162)
771,178 337,009 1,833,707 1,135,221 Sales and marketing 1,016,758
409,856 2,583,761 1,164,793 Research and development 1,545,630
647,664 3,945,543 1,942,508 General and administrative 1,589,055
581,446 4,145,223 1,806,663 Restructuring cost - - 182,107 -
------------- ------------- ------------- ------------- Total
operating expenses 4,922,621 1,975,975 12,690,341 6,049,185
------------- ------------- ------------- ------------- Loss from
operations (2,287,858) (968,393) (6,384,077) (1,607,929) Interest
and other income (expense), net Interest income 87,707 17,485
136,786 38,087 Interest expense (1,258) (394,969) (689,810)
(480,758) Loss on sale of assets - (1,169) - (9,237) Foreign
exchange gain 4,709 - 58,226 - ------------- -------------
------------- ------------- Net loss for the period $(2,196,700)
$(1,347,046) $(6,878,875) $(2,059,837) ------------- -------------
------------- ------------- ------------- -------------
------------- ------------- Other comprehensive income: Foreign
currency translation adjustments (522,573) (31,462) 1,165,722
(22,231) ------------- ------------- ------------- -------------
Comprehensive loss $(2,719,273) $(1,378,508) $(5,713,153)
$(2,082,068) ------------- ------------- -------------
------------- ------------- ------------- -------------
------------- Net loss per share: Basic and diluted $ (0.02) $
(0.04) $ (0.09) $ (0.06) ------------- ------------- -------------
------------- ------------- ------------- -------------
------------- Weighted average common shares outstanding:
94,939,745 37,940,983 74,127,654 37,936,135 CONTACT: Investor
Contact: Gina DeBoutez, The Blueshirt Group, (415) 489-2184, ;
Media Contact: Sarah Stover, Grey Vancouver, (604) 484-3274,
DATASOURCE: CounterPath Corporation CONTACT: Investor Contact: Gina
DeBoutez, The Blueshirt Group, (415) 489-2184, ; Media Contact:
Sarah Stover, Grey Vancouver, (604) 484-3274,
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