CounterPath Reports First Quarter Fiscal 2008 Financial Results
Vancouver, BC, Canada — September 14, 2007 —
CounterPath Solutions, Inc. (OTCBB: CTPS), a leading provider of multimedia VoIP softphones and SIP applications, today announced its financial and operating results for its first quarter ended July 31, 2007.
Recent financial and operating highlights include:
- Quarterly revenues for the three months ended July 31, 2007 of $1.2 million compared to $1.3 million for the three months ended April 30, 2007 and $1.8 million for the three months ended July 31, 2006.
- The launch of Bria(TM) 2.0, the latest CounterPath 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.
- The completion of the acquisition of NewHeights Software Corporation as of August 2, 2007. The acquisition, together with an investment from Wesley Clover, a private equity firm headed by Sir Terence H. Matthews, will allow CounterPath to combine its existing softphone solutions with the 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.
“I believe CounterPath is well positioned to increase its business in both the enterprise and carrier markets,” said Greg Pelling, Chief Executive Officer of CounterPath. “We are successfully delivering on our core strategy of focusing on tier one carriers, and have now expanded our value proposition with the acquisition of NewHeights and the addition of its enterprise software and IP application server products to our product line. The steps we are currently taking to advance the company include: an increased focus on revenue growth through the expansion of our sales team and marketing efforts, leveraging product synergies to address enterprise markets, and achieving operational synergies between CounterPath and NewHeights.” Financial Results – (Unaudited) (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 Corporation)
For the quarter ended July 31, 2007, revenues were $1.2 million compared to $1.8 million for the quarter ended July 31, 2006. Software revenues were $769,008 for the quarter ended July 31, 2007 compared to $1.4 million for the quarter ended July 31, 2006. For the quarter ended July 31, 2007, service revenues were $457,783 compared to $351,162 for the comparable quarter ended 2006.
Operating expenses for the quarter ended July 31, 2007 were $1.9 million compared to $1.8 million for quarter ended July 31, 2006. Sales and marketing expenses increased to $454,883 for the quarter ended July 31, 2007 from $318,608 for the comparable period in 2006. Research and development expense was $766,468 for the quarter ended July 31, 2007 compared to $754,934 for the quarter ended July 31, 2006. General and administrative expenses were $724,527 for the quarter ended July 31, 2007 compared to $689,672 for the quarter ended July 31, 2006.
For the quarter ended July 31, 2007, CounterPath incurred interest expense, net of interest income of $125,052, compared to interest expense, net of interest income of $30,961 for the comparable period last year.
The net loss for the quarter ended July 31, 2007 was $1.2 million, or $(0.03) per share, compared to a net loss of $478,142, or $(0.01) per share, recorded for the quarter ended July 31, 2006.
As of July 31, 2007, CounterPath had $1.4 million in cash compared to $1.7 million at April 30, 2007. The company's working capital was $1.0 million as of July 31, 2007 compared to $1.9 million at April 30, 2007.
Subsequent to the quarter end, on August 2, 2007, CounterPath announced that it had acquired all of the shares of NewHeights Software Corporation through the issuance of 38,400,820 shares of common stock and 1,849,180 preferred shares issued from a wholly-owned subsidiary of the Company that are exchangeable into 1,849,180 shares of common stock of the Company. Upon closing, the convertible debenture holders of the Company converted their existing debentures in the amount of $4 million into 10 million shares of common stock. In addition, CounterPath completed a private placement of $1.3 million issuing 3.25 million shares of common stock at $0.40 and entered into subscription agreements to raise an additional $4.2 million through a series of closings over a seven month period ending March 2, 2008.
Financial tables follow:
The Company's Quarterly Report on Form 10-QSB for the three months ended July 31, 2007 is available for viewing at www.sec.gov
. About CounterPath
Since 2003, CounterPath Solutions, Inc. has been creating value for its clients with the development of innovative multimedia VoIP (Voice over Internet Protocol) softphones and SIP 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 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. Such forward-looking statements include, among others, the expectation and/or claim, as applicable, that CounterPath is well positioned to increase business in both the enterprise and carrier markets.
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 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 CounterPath 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 CounterPath 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.