CounterPath Reports First Quarter Fiscal 2014 Financial Results

Vancouver, BC, Canada — September 12, 2013 —

CounterPath Corporation (“CounterPath” or the “Company”) (NASDAQ: CPAH) (TSX: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for its first quarter ended July 31, 2013 of fiscal 2014.


First Quarter Financial Highlights

“The first quarter is typically a seasonally slower sales period for CounterPath. In this case, the year-over-year comparison is exacerbated by what was an exceptionally strong first quarter last year,” stated Donovan Jones, President and Chief Executive Officer. “We recently made additions to our sales team in Europe and North America that will enhance our direct to enterprise and service provider efforts, while our recent agreements with companies like TeleDynamics and World Telecom Group (WTG) will provide access to an enormous value-added reseller network for the Enterprise market. These efforts, combined with a strong new business pipeline, product differentiation, solid balance sheet and an expanding unified communications market, position CounterPath well for growth.”


Recent Business Highlights


Financial Outlook

For fiscal 2014, CounterPath expects an increase in revenue over the prior year based on rising market demand, new customer wins and follow-on sales from current customers, many of which are at the early stages of their deployment timelines. The Company expects to increase its sales and marketing resources to support sales growth in all of its key markets. Historically, CounterPath has experienced quarter-to-quarter fluctuations in revenue based largely on seasonality and the timing of larger customer deployments.


Conference Call Information

CounterPath will host an investor conference call and live webcast today at 11:00 a.m. ET to discuss its financial results for the first quarter ended July 31, 2013. To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. A question and answer session for analysts and institutional investors will follow management's presentation.

A live audio webcast of the conference call will be available at www.cnw.ca. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived for 30 days.

A taped rebroadcast will be available to listeners until 12 a.m. ET on September 19, 2013. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 44810695, followed by the number sign.


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, outlook, expectations or intentions regarding the future such as the following: (1) For fiscal 2014, CounterPath expects an increase in revenue over the prior year, based on rising market demand, new customer wins and follow-on sales from current customers, many of which are at the early stages of their deployment timelines; and (2) The Company expects to increase its sales and marketing resources to support sales growth in all of its key 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) general economic conditions as they affect CounterPath and its current and prospective customers, including a continued downturn in general economic conditions internationally, (2) the variability in CounterPath’s sales from reporting period to reporting period due to extended sales cycles as a result of selling CounterPath’s products through channel partners or the length of time of deployment of CounterPath’s products by its customers, (3) the Company’s ability to manage its operating expenses, which may adversely affect its financial condition, (4) a decline in the Company’s stock price or insufficient investor interest in the Company’s securities which may impact on the Company’s ability to raise additional financing as required, (5) the Company’s ability to remain competitive as other better financed competitors develop and release competitive products, (6) the impact of intellectual property litigation that could materially and adversely affect CounterPath’s business, (7) the success by the Company of the sales of its current and new products, (8) the impact of technology changes on the Company’s products and industry, (9) the failure to develop new and innovative products using the Company’s technologies, and (10) the potential dilution to shareholders or overhang on the Company’s share price of its outstanding stock options and warrants. Readers should also refer to the risk disclosures outlined in the Company’s quarterly reports on Form 10-Q or Form 10-Q/A, or in the annual reports on Form 10-K or Form 10-K/A, 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 atwww.sedar.com.


About CounterPath

CounterPath's SIP-based VoIP softphones are changing the face of telecommunications. An industry and user favorite, Bria softphones for desktop and mobile devices, together with the company's server applications and Fixed Mobile Convergence (FMC) solutions, enable service providers, OEMs and enterprises large and small around the globe to offer a seamless and unified communications experience across both fixed and mobile networks. Standards-based, cost-effective and reliable, CounterPath's award-winning solutions power the voice and video calling, messaging, and presence offerings of customers such as Alcatel-Lucent, AT&T, Verizon, BT, Mobilkom Austria, Rogers, Avaya, BroadSoft, Cisco Systems, GENBAND, Metaswitch Networks, Mitel, NTT and NEC.

For more information please visit www.counterpath.com.

Contacts:

David Karp
Chief Financial Officer, CounterPath
dkarp@counterpath.com
(604) 628-9364

Michael Moore
TMX Equicom
mmoore@tmxequicom.com
(619) 467-7067


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(TABLES TO FOLLOW)

Balance Sheet

Statement Sheet


Non-GAAP Financial Measures

This news release contains “non-GAAP financial measures”. The non-GAAP financial measures in this news release may include non-GAAP gross margin and non-GAAP income (loss) from operations which exclude non-cash stock-based compensation and amortization of intangible asset charges relative to gross profit and income (loss) from operations calculated in accordance with GAAP. The non-GAAP financial measures may also include non-GAAP net income (loss) which excludes non-cash stock-based compensation, amortization of intangible assets and fair value adjustment on derivative instruments charges relative to income (loss) 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.



GAAP Sheet