VANCOUVER, Dec. 17 /PRNewswire-FirstCall/ -- CounterPath
Corporation (OTCBB: COPA), a leading provider of multimedia VoIP
softphones and SIP applications, today announced financial and
operating results for the second quarter ended October 31, 2007.
Recent financial and operating highlights include: - Revenue for
the second quarter of fiscal 2008 of $2.4 million compared to $1.7
million for the second quarter of fiscal 2007 and $1.2 million for
the first quarter of fiscal 2008. - Closing of an SDK (Software
Development Kit) license upgrade with Verizon Business to enable
voice, messaging and presence management in Verizon's Integrated
Communications Package. Verizon Business' future plans for the
solution include integration into the company's portfolio of
advanced audio, net and video conferencing services and contact
center services, with intent to expand internationally. - Launching
of phase one of a multi-phase project with a tier one OEM (Original
Equipment Manufacturer) to bundle CMC Enterprise, CounterPath's
enterprise-focused client, with a SIP (Session Initiation Protocol)
communications server. The new product offering, supporting
stand-alone softphone functionality as well as integration with
Microsoft Outlook(R) and Lotus Notes(R), will serve SMB (Small and
Medium Business) customers seeking a comprehensive and robust
end-to-end VoIP solution. - With Laszlo Systems, co-developed a
prototype of the CMC WebPhone, a SIP softphone delivered via an
RIA-based (Rich Internet Application) interface. Its successful
integration with Laszlo's Webtop, The Web 2.0 Desktop(TM),
demonstrates how our software, united with other web-based
applications within a web interface, results in a seamless
communications experience for customers. - Receipt of the GTB
(Global Telecoms Business) Group Innovations Award for "Most
Innovative Technology in Mobile VoIP", in partnership with mobilkom
austria, for the A1 over IP project. The solution enables users to
make VoIP calls with a softphone application on their PCs or
laptops and also choose to receive mobile telephone calls on their
softphone. "The integration of CounterPath and NewHeights is going
extremely well, having just completed our first quarter on a
consolidated basis," said Greg Pelling, Chief Executive Officer of
CounterPath. "I am pleased that we are diversifying our revenue
base with tier one telecom customers like Verizon. We expect to
launch new products for the Enterprise and SMB segments of the
market which will continue to provide opportunities for revenue
growth. Our focus on providing high value solutions to our
customers and the continued successful execution of our operating
plan will allow us to move closer to our profitability objectives
and maintain our position as a leader in the SIP endpoint
applications space," 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) For the second quarter of fiscal 2008, revenue
was $2.4 million compared to $1.7 million for the second quarter of
fiscal 2007. Software revenue for this quarter was $2.0 million
compared to $1.3 million for the same period last year. Service
revenue for this quarter was $402,578 compared to $396,728 for the
comparable quarter in fiscal 2007. Consolidated revenue this
quarter included $1.0 million from the acquisition of NewHeights
Software Corporation which closed on August 2, 2007. Operating
expenses for the second quarter of fiscal 2008 were $5.5 million
compared to $1.9 million for the second 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. Operating expenses include a non-cash expense of
$295,231 from amortization of intangible assets acquired from
NewHeights, a non-cash expense of $706,536 for stock-based
compensation, and $182,107 in restructuring charges related to the
post-acquisition consolidation of administrative, sales, marketing,
research and development departments. Sales and marketing expenses
increased to $1.1 million for the second fiscal quarter of 2008
compared to $436,329 for the same period last year. For this
quarter, research and development expenses were $1.6 million and
general and administrative expenses were $1.8 million, compared to
$539,910 and $543,613, respectively, for the same period last year.
Interest expenses were $547,945 during the quarter, which included
a non-recurring, non-cash expense of $540,200 which resulted from
the exchange of our convertible debentures into common shares on
the close of the NewHeights transaction. The net loss for the
second quarter of fiscal 2008 was $3.5 million, or $(0.04) per
share, compared to a net loss of $234,649, or $(0.01) per share
recorded for the second quarter of fiscal 2007. The Company closed
the quarter with $3.2 million in cash, compared to $1.7 million at
the end of the fiscal year on April 30, 2007. At the end of the
second fiscal quarter, the Company's working capital was $4.4
million, compared to $1.9 million at the end of the fiscal year on
April 30, 2007. About CounterPath Since 2003, CounterPath
Corporation (formerly CounterPath Solutions, Inc.) has been
creating value for its clients with the development of innovative
multimedia VoIP (Voice over Internet Protocol) softphones and SIP
(Session Initiation Protocol) applications. CounterPath has a
flexible, user friendly and feature-rich product suite, which
enables its clients to cost-effectively integrate or bundle voice,
video, presence and IM applications into their VoIP solutions. The
Company's clients include some of the world's largest
telecommunications service providers and network equipment
providers including AT&T, BT (British Telecommunications PLC),
Alcatel-Lucent and Cisco Systems. Additional information about
CounterPath and its products and services is available at
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 and NewHeights, (2) the failure to
develop and launch new and innovative products using the Company's
and NewHeights' 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 become profitable, 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.
COUNTERPATH CORPORATION (Formerly CounterPath Solutions, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS (Stated in U.S. Dollars)
October 31, April 30, 2007 2007 ------------ ------------
(Unaudited) Assets Current assets: Cash $ 3,223,986 $ 1,680,220
Accounts receivable (net of allowance for doubtful accounts of
$158,208 and $56,817 respectively) 4,144,253 1,924,899 Prepaid
expenses and deposits 236,237 129,534 ------------ ------------
Total current assets 7,604,476 3,734,653 Deposits 108,199 74,613
Equipment 481,432 276,599 Intangible assets (net of accumulated
amortization of $295,231) 6,106,408 - Investment tax credits
recoverable 218,794 - Goodwill 7,025,444 - Other assets 40,013
25,716 ------------ ------------ Total Assets $21,584,766 $
4,111,581 ------------ ------------ ------------ ------------
Liabilities and Stockholders' Equity (Capital Deficit) Current
liabilities: Accounts payable and accrued liabilities $ 2,520,573 $
1,314,083 Due to related parties 21,522 25,417 Unearned revenue
513,838 408,188 Customer deposits 91,522 5,615 Warranty payable
64,858 83,769 ------------ ------------ Total current liabilities
3,212,313 1,837,072 Convertible debentures - 3,369,230 Unrecognized
tax benefit 317,369 - ------------ ------------ Total liabilities
3,529,682 5,206,302 Stockholders' equity (capital deficit): Common
stock, $0.001 par value Authorized: 415,384,500 Issued and
outstanding: October 31, 2007 - 90,846,669; April 30, 2007 -
37,940,983 90,847 37,941 Additional paid-in capital 26,983,260
4,820,069 Accumulated deficit (10,626,738) (5,872,151) Accumulated
other comprehensive income (loss) - currency translation adjustment
1,607,715 (80,580) ------------ ------------ Total stockholders'
equity (capital deficit) 18,055,084 (1,094,721) ------------
------------ Liabilities and Stockholders' Equity $21,584,766 $
4,111,581 ------------ ------------ ------------ ------------
COUNTERPATH CORPORATION (Formerly CounterPath Solutions, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS (Stated in U.S. Dollars) (Unaudited) Three Months Ended Six
Months Ended October 31, October 31, -------------------------
------------------------- 2007 2006 2007 2006 ------------
------------ ------------ ------------ Revenue: Software $
2,042,133 $ 1,276,065 $ 2,811,141 $ 2,685,784 Service 402,578
396,728 860,361 747,890 ------------ ------------ ------------
------------ Total revenue 2,444,711 1,672,793 3,671,502 3,433,674
Operating expenses: Cost of sales (includes amortization of
intangibles of $295,231) 701,371 353,364 1,062,529 798,212 Sales
and marketing 1,112,119 436,329 1,567,002 754,937 Research and
development 1,633,445 539,910 2,399,912 1,294,844 General and
administrative 1,831,642 543,613 2,556,168 1,233,285 Restructuring
cost 182,107 - 182,107 - ------------ ------------ ------------
------------ Total operating expenses 5,460,684 1,873,216 7,767,718
4,081,278 ------------ ------------ ------------ ------------ Loss
from operations (3,015,973) (200,423) (4,096,216) (647,604)
Interest and other income (expense), net Interest income 33,554
8,567 49,078 20,602 Interest expense (547,975) (42,793) (688,552)
(85,789) Foreign exchange gain 53,516 - 53,516 - ------------
------------ ------------ ------------ Net loss for the period
$(3,476,878) $ (234,649) $(4,682,174) $ (712,791) ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ Other comprehensive income: Foreign
currency translation adjustments 1,694,235 9,985 1,688,295 9,231
------------ ------------ ------------ ------------ Comprehensive
loss $(1,782,643) $ (224,664) $(2,993,879) $ (703,560) ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ Net loss per share: Basic and diluted $
(0.04) $ (0.01) $ (0.07) $ (0.02) ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ Weighted average common shares outstanding: 89,502,235
37,940,983 63,721,609 37,933,711 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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