CounterPath Reports Second Quarter Fiscal 2008 Financial Results

Vancouver, BC, Canada — December 17, 2007 — 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: “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.

Financial tables follow:

Second Quarter 2008 Fiscal Results - Image 1

Second Quarter 2008 Fiscal Results - Image 2

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 https://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 the2 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.