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CounterPath Reports Third Quarter Fiscal 2011 Financial Results

Company Reports Record Revenues

Vancouver, BC, Canada — March 10, 2011 — CounterPath Corporation (“CounterPath” or the “Company”) (OTCBB: CPAH; TSX-V: CCV), an award-winning provider of desktop and mobile VoIP software products and solutions, today announced the financial and operating results for its third quarter of fiscal year 2011. CounterPath’s fiscal year runs May 1 to April 30.

Financial and operating highlights for the third quarter ended January 31, 2011, include: “Our sales continued to be strong this quarter, reflecting increasing demand for our desktop and mobile VoIP softphone products,” said CounterPath President and CEO Donovan Jones. “With three consecutive quarters of revenue growth and careful management of our costs, our margin growth has resulted in a significantly improved bottom line year over year.”

“We’re seeing the momentum behind mobile operating systems and platforms pick up speed, driven by the success of Apple and Google Android devices; according to Frost & Sullivan, mobile VoIP revenue will reach approximately $30 billion by 2015, up from $606 million in 2008,” Jones added. “With the recent introduction of our mobile VoIP applications, CounterPath is positioned well to take advantage of this rapidly growing market.”

The Company also announced the resignations of two members of its Board of Directors, Mark Bruk, a former CEO of CounterPath, and Greg Pelling, also a former CEO of CounterPath. Both resignations are part of a Board transition plan. The Company intends to announce its nominations to the Board of Directors prior to the next annual meeting of shareholders. The Company would like to thank Mr. Bruk and Mr. Pelling for their considerable time and effort, and wishes them well in their future endeavors.

Financial Results

(All amounts in U.S. dollars and in accordance with accounting principles generally accepted in the United States (“GAAP”) unless otherwise specified.)

Revenue was $3.0 million for the quarter ended January 31, 2011 compared to $1.4 million for the same quarter last year. Software revenue for the quarter ended January 31, 2011 was $1.5 million compared to $1.0 million for the same quarter last year. Service revenue for the quarter ended January 31, 2011 was $1.5 million compared to $0.3 million for same quarter last year.

Operating expenses for the quarter ended January 31, 2011 were $3.7 million compared to $3.1 million for the same quarter last year.

Operating expenses for the current quarter included a non-cash expense of $0.2 million for amortization of intangible assets and a non-cash stock-based compensation expense of $0.1 million.

Sales and marketing expenses were $0.8 million for the quarter ended January 31, 2011 compared to $0.6 million for same quarter last year. For the quarter ended January 31, 2011, research and development expenses were $1.2 million and general and administrative expenses were $1.0 million, compared to $0.8 million and $0.9 million, respectively, for the same quarter last year.

The net loss for the quarter ended January 31, 2011 was $0.5 million, or a loss of $0.01 per share, compared to a net loss of $1.7 million, or a loss of $0.06 per share, for the quarter ended January 31, 2010.

At January 31, 2011, the Company had $1.7 million in cash, compared to $1.6 million at April 30, 2010. At January 31, 2011, the Company’s working capital was $1.4 million, compared to $1.2 million at April 30, 2010.

Subsequent to the quarter, on March 10, 2011, the Company granted 44,052 deferred share units, including 22,026 to an officer of the Company pursuant to its deferred share unit plan. Each deferred share unit provides the holder thereof the right to exchange the unit, once vested, into one share of common stock of the Company under the terms and conditions of the plan. The deferred share units vest as to 1/3 of the deferred share units on the first, second and third anniversary of the date of the grant, at which time the deferred share units are fully vested.

About CounterPath
CounterPath Corporation is an award-winning 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), mobilkom Austria, Avaya, Cisco Systems, Metaswitch Networks and Mitel.

For more information please 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 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.

Reconciliation to GAAP

GAAP Sheet

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) the initiation of a product build-out for a Tier One service provider encompassing desktop, web and mobile softphones that is expected to launch later this year; and (2) with the recent introduction of our mobile VoIP applications, CounterPath is positioned well to take advantage of this rapidly growing market.

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 1114
dkarp@counterpath.com

(TABLES TO FOLLOW)

Balance Sheet

Statement Sheet