CounterPath Reports First Quarter Fiscal 2011 Financial Results

Vancouver, BC, Canada — September 14, 2010 — CounterPath Corporation (“CounterPath” or the “Company”) (OTCBB: CPAH; TSX-V: CCV), a leading provider of desktop and mobile VoIP software products and solutions, today announced financial and operating results for the first quarter of fiscal year 2011.

Financial and operating highlights for the first quarter ended July 31, 2010 include: "We are pleased with the progress made this quarter highlighted by improving revenue, new product introductions and strong customer traction," stated Donovan Jones, President and CEO, CounterPath. "Our revenue grew 8% over the same quarter last year buoyed by strong desktop softphone sales through our OEM channels. We've expanded our revenue opportunities with new product launches such as Bria for the iPhone and Bria for the Linux operating system and expect to announce further product offerings in the near future. Our efforts to leverage our internal sales team with external distribution channels is starting to provide significant revenues as enterprises seek to leverage the Internet to save money on communications costs while improving their productivity with our solutions," continued Jones.

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.)

For the quarter ended July 31, 2010, revenue was $2.2 million compared to $2.1 million for the quarter ended July 31, 2009. Software revenue for the quarter ended July 31, 2010 was $1.8 million compared to $1.1 million for the same quarter last year. Service revenue for the quarter ended July 31, 2010 was $0.4 million compared to $0.9 million for same quarter last year.

Operating expenses for the quarter ended July 31, 2010 were $3.7 million compared to $2.9 million for the same quarter last year. Inclusive in operating expenses of $3.7 million were non-cash expenses of $0.5 million, including $0.2 million from amortization of intangible assets acquired from NewHeights Software Corp., FirstHand Technologies Inc. and BridgePort Networks, Inc. and a non-cash $0.3 million stock-based compensation expense.

Sales and marketing expenses were $0.9 million for the quarter ended July 31, 2010 compared to $0.8 million for same quarter last year due to increased personnel costs. For the quarter ended July 31, 2010, research and development expenses were $1.1 million compared to $0.8 million in the same quarter last year due to $0.3 million onetime gain that resulted from the settlement of a research contract with a third party that benefited the quarter ended July 31, 2009. General and administrative expenses were $1.0 million, compared to $0.6 million for the same quarter last year.

The net loss for the quarter ended July 31, 2010 was $1.4 million, or a loss of $0.04 per share, compared to a net loss of $1.2 million, or a loss of $0.04 per share for the quarter ended July 31, 2009.

At July 31, 2010, the Company had $1.2 million in cash, compared to $1.6 million at April 30, 2010. At July 31, 2010, the Company’s working capital was $0.6 million, compared to $0.8 million at April 30, 2010.

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 www.counterpath.com.

Non-GAAP Financial Measures

This news release contains "non-GAAP financial measures". The non-GAAP financial measures in this news release consist of non-GAAP operating expenses and non-GAAP operating losses, which exclude non-cash stock-based compensation, amortization and impairment of intangible asset charges relative to operating expenses and operating losses calculated in accordance with GAAP. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. CounterPath utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. CounterPath believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of CounterPath’s core operating results and trends.

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 as the following: (1) We’ve expanded our revenue opportunities with new product launches such as Bria for the iPhone and Bria for the Linux operating system and expect to announce further product offerings in the near 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 develop new and innovative products using the Company’s technologies, (2) the Company’s ability to remain competitive as other parties develop and release competitive products, (3) the Company’s ability to retain the employees necessary to continue research and development of current and new products, (4) the success by the Company of the sales of its current and new products, (5) the impact of technology changes on the Company’s products and on the VoIP industry, (6) the compatibility of the Company’s products with new computer operating systems, (7) the rate of adoption by service providers and the general public of VoIP as a replacement for regular and cellular phone service, (8) general economic conditions as they affect CounterPath and its current and prospective customers, including a continued downturn in general economic conditions internationally, (9) the ability of the Company to control costs operating, general administrative and other expenses, and (10) 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-Q, annual reports on Form 10-K and the Company’s other disclosure documents filed from time-to-time with the Securities and Exchange Commission at www.sec.gov and the Company’s interim and annual filings and other disclosure documents filed from time-to-time on SEDAR at www.sedar.com.

Disclaimer: Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact

David Karp
Chief Financial Officer
CounterPath Corporation
+1.604.320.3344 ext 1110
ir@counterpath.com

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