Company Delivers Record Annual Revenues and 24% Growth VANCOUVER,
July 30 /PRNewswire-FirstCall/ -- CounterPath Solutions, Inc.
(OTCBB: CTPS), a leading provider of VoIP (Voice over IP) and Video
over IP SIP softphones, today announced its financial and operating
results for its fiscal year ended April 30, 2007. Recent financial
and operating highlights include: - Record annual revenues for the
year ended April 30, 2007 of $5.7 million, an increase of 24% from
$4.6 million in revenues recorded for the year ended April 30,
2006. - Revenues for the fourth quarter ended April 30, 2007 were
$1.3 million, compared to $1.0 million for the third quarter ended
January 31, 2007 and $1.5 million recorded for the fourth quarter
ended April 30, 2006. - New customers: AT&T Inc., British
Telecom plc, mobilkom austria, and Primus Telecommunications; and
new partnerships with Bridgeport Networks, Inc., BroadSoft, Inc.,
Convergence, Hana Micron Inc., Huawei Technologies Co., Ltd., Intel
Corp., Intrado Inc., Microsoft Corp., Oberthur Card Systems, Oracle
Corp., Teleappliant. - Awarded 2006 Product of the Year for
CounterPath's eyeBeam(TM) 1.5 softphone by INTERNET TELEPHONY
magazine (a Technology Marketing Corporation (TMC) publication). -
Named among Canada's 20 Best Small and Medium Employers following a
2006 survey conducted by Queen's School of Business and Queen's
Centre for Business Venturing in association with Hewitt
Associates. - Announced the launch of Bria(TM) 2.0, CounterPath's
latest softphone client application, supporting a number of new
usability and customization features and enabling service providers
and equipment manufacturers to present a highly flexible,
user-friendly VoIP solution for consumer markets. - Announced that
CounterPath has entered into an agreement to acquire NewHeights
Software Corporation, a provider of next generation communications
software, for $21.6 million which includes an investment from
Wesley Clover, a private equity firm headed by Sir Terence H.
Matthews. The acquisition and investment will allow CounterPath to
combine its existing softphone solutions with NewHeights'
enterprise softphone and IP application server products, enabling
CounterPath to provide best in class voice and multimedia
collaboration services to a wider range of customers within the IP
communications market. "Our team continues to deliver exceptional
results as evidenced by both our new product announcements and our
growing customer and partner list," said Mark Bruk, Chief Executive
Officer of CounterPath. "In fiscal 2008, we will maintain our focus
on selling to tier-one carriers and infrastructure manufacturers,
both by our direct sales force and via our partner channel. As we
integrate our teams and products following our NewHeights Software
acquisition, we will add the enterprise market to our focus and we
expect that our increased product and service offerings will not
only deliver additional revenues from our existing customers, but
we will also attract an ever increasing mix of new customers and
partners. We will leverage our renewed capital investment and
strategic investment partners to continue to deliver on our mission
to be the dominant endpoint for fixed, mobile and fixed mobile
convergence providers." Financial Results (All amounts in U.S.
dollars and in accordance with U.S. GAAP unless otherwise
specified. Financial results do not include financial results of
NewHeights Software Corp.) For the year ended April 30, 2007,
revenues were $5.7 million compared to $4.6 million for the year
ended April 30, 2006, representing an increase of 24%. Software
revenues were $4.1 million for the year ended April 30, 2006
compared to $3.5 million in the prior year, representing an
increase of 15%. For the year ended April 30, 2007, service
revenues were $1.6 million compared to $1.1 million for the year
ending April 30, 2006, a 52% increase. Operating expenses for the
year ended April 30, 2007 were $6.9 million compared to $5.3
million for the year ended April 30, 2006, representing an increase
of 30%. Increases in operating expenses primarily reflect the
addition of personnel and related wages and benefits and include
the non-cash fair value of employee stock-based compensation of
$880,109, the majority of which CounterPath began expensing this
fiscal year. Sales and marketing expenses increased from $802,502
last year to $1.7 million in the 2007 fiscal year, reflecting
additional sales and marketing personnel added during the year to
assist in selling CounterPath products and services. Research and
development expenses grew to $2.7 million in fiscal 2007 from $2.5
million in the previous year, while general and administrative
expenses grew to $2.5 million from $2.0 million for the same
respective periods. For the year ended April 30, 2007, CounterPath
incurred interest expense of $326,278, offset by interest income of
$55,083, compared to interest expense of $64,139 offset by interest
income of $19,590 for the comparable period last year. For the year
ended April 30, 2007, CounterPath booked a non-cash expense of
$289,252 to record the loss on the extinguishment of our
convertible debenture which was re-financed during the fiscal year.
The net loss for the year ended April 30, 2007 was $3.4 million, or
$(0.09) per share, compared to a net loss of $1.5 million, or
$(0.04) per share, recorded for the previous year. As of April 30,
2007, CounterPath had $1.7 million in cash compared to $2.4 million
at April 30, 2006. The company's working capital was $1.9 million
as of April 30, 2007 compared to $2.0 million at April 30, 2006.
Financial tables follow: COUNTERPATH SOLUTIONS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (Stated in U.S. dollars) April 30,
April 30, 2007 2006 (Restated) -------------- -------------- Assets
Current assets: Cash $ 1,680,220 $ 2,369,021 Accounts receivable
(net of allowance for doubtful accounts of $56,817 and $17,281
respectively) 1,924,899 477,814 Prepaid expenses and deposits
129,534 104,927 -------------- -------------- Total current assets
3,734,653 2,951,762 Deposits 74,613 - Equipment 276,599 300,077
Other assets 25,716 8,165 -------------- -------------- Total
Assets $ 4,111,581 $ 3,260,004 -------------- --------------
-------------- -------------- Liabilities and Stockholders' Equity
(Capital Deficit) Current liabilities: Accounts payable and accrued
liabilities $ 1,314,083 $ 754,589 Due to related parties 25,417
34,929 Unearned revenue 408,188 115,214 Customer deposits 5,615 138
Warranty payable 83,769 71,011 -------------- -------------- Total
current liabilities 1,837,072 975,881 Convertible debentures
3,369,230 1,887,582 -------------- -------------- Total liabilities
5,206,302 2,863,463 -------------- -------------- Stockholders'
equity (capital deficit): Common stock, $0.001 par value
Authorized: 415,384,500 Issued and outstanding: April 30, 2007 -
37,940,983; April 30, 2006 - 37,915,462 37,941 37,915 Additional
paid-in capital 4,820,069 2,940,405 Accumulated deficit (5,872,151)
(2,507,500) Accumulated other comprehensive loss - currency
translation adjustment (80,580) (74,279) --------------
-------------- Total stockholders' equity (capital deficit)
(1,094,721) 396,541 -------------- -------------- Liabilities and
Stockholders' Equity (Capital Deficit) $ 4,111,581 $ 3,260,004
-------------- -------------- -------------- --------------
COUNTERPATH SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Stated in U.S. dollars) Year Ended April 30, 2007 2006
(Restated) -------------- -------------- Revenue: Software $
4,099,369 $ 3,549,997 Service 1,625,572 1,069,182 --------------
-------------- Total revenue 5,724,941 4,619,179 --------------
-------------- Cost of revenue: Software 910,376 403,896 Service
684,195 315,848 -------------- -------------- Total cost of revenue
1,594,571 719,744 -------------- -------------- Gross profit
4,130,370 3,899,435 -------------- -------------- Operating
expenses: Sales and marketing 1,682,685 802,502 Research and
development 2,727,914 2,528,804 General and administrative
2,514,766 1,994,243 -------------- -------------- Total operating
expenses 6,925,365 5,325,549 -------------- -------------- Loss
from operations (2,794,995) (1,426,114) Interest and other income
(expense), net Interest income 55,083 19,590 Interest expense
(326,278) (64,139) Loss on extinguishment of convertible debenture
(289,252) - Loss on sale of assets (9,209) (901) --------------
-------------- Net loss $ (3,364,651) $ (1,471,564) --------------
-------------- -------------- -------------- Net loss per share:
Basic and diluted $ (0.09) $ (0.04) -------------- --------------
-------------- -------------- Weighted average common shares
outstanding: 37,937,317 37,915,462 The Company's Annual Report on
Form 10-KSB for the year ended April 30, 2007 is available for
viewing at http://www.sec.gov/. About CounterPath CounterPath
Solutions, Inc. is a developer of award-winning, carrier-grade VoIP
and Video over IP SIP softphones for telecom and Internet telephony
service providers, cable operators, IP-PBX manufacturers and
infrastructure manufacturers. CounterPath's SIP softphones and
softphone SDKs (Software Development Kits), which provide VoIP,
Video over IP, IM (Instant Messaging) and presence functionality
and can be preconfigured to our customer's VoIP service, are
predominantly licensed on a per seat or per subscriber basis,
either co-branded or private labeled. CounterPath's technology is
deployed by over 250 customers in more than 50 countries.
Additional information about CounterPath and CounterPath's products
and services is available at http://www.counterpath.com/.
Forward-Looking Statements This news release contains
"forward-looking statements". Statements in this press release,
which are not purely historical, are forward-looking statements and
include any statements regarding beliefs, plans, expectations or
intentions regarding the future. Such forward-looking statements
include, among others, the expectation and/or claim, as applicable,
that CounterPath will complete the acquisition of NewHeights
Software Corporation. It is important to note that actual outcomes
and CounterPath'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 complete the acquisition of NewHeights, (2) the failure
to successfully integrate the businesses of CounterPath and
NewHeights after completion of the acquisition, (3) the failure to
develop new and innovative products using CounterPath's and
NewHeights' technologies, (4) CounterPath's ability to remain
competitive as other parties develop and release competitive
products, (5) CounterPath's ability to retain the employees
necessary to continue research and development of current and new
products, (6) the success by CounterPath of the sales of its
current and new products, (7) the impact of competitive products on
the sales of CounterPath's products, (8) the impact of technology
changes on CounterPath's products and on the VoIP industry, (9) the
compatibility of CounterPath's products with new computer operating
systems, (10) the rate of adoption by service providers and the
general public of VoIP as a replacement for regular and cellular
phone service, (11) general economic conditions as they affect
CounterPath and its prospective customers, (12) the ability of
CounterPath to control costs operating, general administrative and
other expenses, and (13) insufficient investor interest in
CounterPath's securities which may impact on CounterPath's ability
to raise additional financing as required. Readers should also
refer to the risk disclosures outlined in CounterPath's quarterly
reports on Form 10-QSB, annual reports on Form 10-KSB and
CounterPath's other disclosure documents filed from time-to-time
with the Securities and Exchange Commission. CONTACT: Investor
Contact: Scott Wilson, The Blueshirt Group, (415) 489-2188, ; Media
Contact: Sarah Stover, Grey Vancouver, (604) 484-3274, DATASOURCE:
CounterPath Solutions, Inc. CONTACT: Investor Contact: Scott
Wilson, The Blueshirt Group, (415) 489-2188, ; Media Contact: Sarah
Stover, Grey Vancouver, (604) 484-3274,
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