VANCOUVER, Dec. 18 /PRNewswire-FirstCall/ -- CounterPath Solutions,
Inc. (OTCBB: CTPS), a leading provider of VoIP (Voice over IP) and
Video over IP SIP softphones, today announced the financial and
operating results for its second quarter ended October 31, 2006.
Second quarter highlights: - Revenues for the quarter ended October
31, 2006 of $1,672,793, an increase of 54% over the $1,086,101
recorded for the quarter ended October 31, 2005. - Reduction in
loss to $234,649 ($0.01 per share) for the quarter ended October
31, 2006 from a loss of $258,725 ($0.01 per share) recorded for the
quarter ended October 31, 2005, and a loss of $478,142 ($0.01 per
share) recorded for the last quarter ended July 31, 2006. -
Deployment of AT&T CallVantage Softphone using the CounterPath
softphone application. AT&T Inc. is one of the world's largest
telecommunications holding companies and is the largest in the
United States. For more information visit
http://www.usa.att.com/callvantage/softphone/index.jsp. -
Announcement of mobilkom austria "Fixed-Mobile" convergence trial
launch enabling end users the ability to make voice over internet
calls with a softphone application on their PCs or laptops and also
choose to receive mobile telephone calls on their softphone.
"Overall, we were pleased with the progress made executing our
strategic and operational plan during the quarter though we believe
that current quarter's revenue was impacted by a delay in customer
reporting of deployed endpoints," stated Mark Bruk, chief executive
officer of CounterPath. "We put in place a plan slightly less than
18 months ago to focus on five key areas: First, to focus our
selling and solutioning efforts to tier one service providers,
OEM's and enterprises; we have since announced commercial
agreements and launches with British Telecom, AT&T, Cisco and
mobilkom austria. We will continue to see the monetization of our
efforts through these relationships, though we expect that our
results of operations will vary from quarter to quarter as a result
of long sales and deployment cycles and variations in customer
ordering and reporting patterns. Second, to focus our R&D
efforts on the development and commercialization of innovative
technologies; we have launched new versions of our X-Lite(TM)
(X-Lite 3.0) and eyeBeam(TM) (eyeBeam 1.5) clients, and unveiled a
new look and feel to our latest client, code-named Frontier, which
will be generally available in the first quarter of calendar 2007.
Third, to invest in the CounterPath team; we have more than doubled
the headcount over the last year with a deliberate focus on
recruiting engineering talent while broadening our geographic sales
coverage, and keeping expenses in line evidenced by our reduction
is losses quarter over quarter. Fourth, to build out our
interoperability program, we achieved certification from leading
manufacturers and solution providers such as Nortel, Sylantro and
Intrado. Fifth, to provide thought leadership on standards and
architecture; we contributed to standards organizations such as the
IETF working groups, the implementation of UPDI (universal phone
device interface) from Intel and our E911 solution focus."
Financial Results - Unaudited (All amounts in U.S. dollars and in
accordance with U.S. GAAP unless otherwise specified) For the
quarter ended October 31, 2006, we generated $1,672,793 in revenue
compared to $1,086,101 for the quarter ended October 31, 2005,
representing an increase of $586,692 or 54% from the same period
last year and a 5% decrease from quarter ended July 31, 2006
revenues. Software revenues were $1,276,065 for the quarter ended
October 31, 2006 compared to $731,164 for the quarter ended October
31, 2005, representing an increase of $554,901 or 75% over the same
period last year. For the quarter ended October 31, 2006, service
revenue grew by 12% to $396,728 compared to $354,937 for the
quarter ended October 31, 2005. Over the quarter, the total number
of customers that have deployed our software increased by 23 to
236, as of October 31, 2006. For the six months ended October 31,
2006, we generated $3,433,674 in revenue compared to $1,913,397 for
the six months ended October 31, 2005. This represents an increase
of $1,520,277 or 79% from the same period last year. We generated
$2,685,784 in software revenue for the six months ended October 31,
2006 compared to $1,441,842 for the six months ended October 31,
2005, representing an increase of $1,243,942 or 86% over the same
period last year. For the six months ended October 31, 2006,
service revenue was $747,890 compared to $471,555 for the six
months ended October 31, 2005, an increase of $276,335 or 59%.
Operating expenses for the quarter ended October 31, 2006 were
$1,511,784 compared to $1,159,044 for the quarter ended October 31,
2005, representing an increase of 30% or $352,740. Operating
expenses for the six months ended October 31, 2006 were $3,274,998
compared to $2,186,671 for the six months ended October 31, 2005,
representing and increase of 50% or $1,088,327. Increases in
operating expenses primarily reflect the addition of personnel and
related wages and benefits and include the non-cash fair value of
employee stock-based compensation of $442,718, which we began
expensing this fiscal year. The net loss for the quarter ended
October 31, 2006 was $234,649 ($0.01 per share) compared to
$258,725 ($0.01 per share) recorded for the quarter ended October
31, 2005. For the six months ended October 31, 2006, the net loss
was $712,791 ($0.02 per share) compared to a net loss of $568,529
($0.02 per share) recorded for the six months ended October 31,
2005. As of October 31, 2006, we had $1,085,368 in cash compared to
$1,133,361 as of July 31, 2006 and $2,369,021 at April 30, 2006.
Our working capital was $1,744,149 as of October 31, 2006 compared
to $1,671,169 at July 31, 2006 and $1,975,881 at April 30, 2006.
Subsequent to the quarter, we raised an additional net $2 million
in convertible debentures which will be used to (1) expand the
development and marketing of our core products, (2) develop
additional products, and (3) for general corporate purposes.
Financial tables follow: COUNTERPATH SOLUTIONS, INC. CONDENSED
INTERIM CONSOLIDATED BALANCE SHEETS (Stated in U.S. dollars)
(Unaudited) October 31, April 30, 2006 2006 -------------
------------- ASSETS (Unaudited) Current assets: Cash $ 1,085,368 $
2,369,021 Accounts receivable (net of allowance of $53,915 and
$38,646, respectively) 2,000,826 477,814 Prepaid expenses and
deposits 132,477 104,927 ------------- ------------- Total current
assets 3,218,671 2,951,762 Deposits 73,187 - Equipment (net of
accumulated amortization of $521,921 and $383,975, respectively)
289,881 300,077 Other assets 12,611 8,165 -------------
------------- TOTAL ASSETS $ 3,594,350 $ 3,260,004 -------------
------------- ------------- ------------- LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and
accrued liabilities $ 1,055,845 $ 754,589 Due to related parties
21,731 34,929 Unearned revenue 243,027 115,214 Customer deposits
59,858 138 Warranty payable 94,061 71,011 -------------
------------- Total current liabilities 1,474,522 975,881
Convertible debenture 1,922,175 1,887,582 -------------
------------- Total liabilities 3,396,697 2,863,463 -------------
------------- Stockholders' equity: Common stock, $0.001 par value
Authorized: 415,384,500 Issued and outstanding: October 31, 2006 -
37,940,983; April 30, 2006 - 37,915,462 37,941 37,915 Additional
paid-in capital 3,255,140 2,750,494 Accumulated deficit (3,030,380)
(2,317,589) Accumulated other comprehensive loss - currency
translation adjustment (65,048) (74,279) -------------
------------- Total stockholders' equity 197,653 396,541
------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,594,350 $ 3,260,004 ------------- -------------
------------- ------------- COUNTERPATH SOLUTIONS, INC. CONDENSED
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Stated in U.S.
dollars) (Unaudited) Three Months Ended Six Months Ended October
31, October 31, ------------------------- -------------------------
2006 2005 2006 2005 ------------ ------------ ------------
------------ Revenue: Software $ 1,276,065 $ 731,164 $ 2,685,784 $
1,441,842 Service 396,728 354,937 747,890 471,555 ------------
------------ ------------ ------------ Total revenue 1,672,793
1,086,101 3,433,674 1,913,397 ------------ ------------
------------ ------------ Cost of revenue: Software 204,364 109,546
458,241 178,903 Service 149,000 76,333 339,971 116,831 ------------
------------ ------------ ------------ Total cost of revenue
353,364 185,879 798,212 295,734 ------------ ------------
------------ ------------ Gross profit 1,319,429 900,222 2,635,462
1,617,663 ------------ ------------ ------------ ------------
Operating expenses: Sales and marketing 436,329 277,729 754,937
373,400 Research and development 539,910 518,948 1,294,844
1,050,870 General and administrative 535,545 362,367 1,225,217
762,401 ------------ ------------ ------------ ------------ Total
operating expenses 1,511,784 1,159,044 3,274,998 2,186,671
------------ ------------ ------------ ------------ Loss from
operations (192,355) (258,822) (639,536) (569,008) Interest and
other income (expense), net (42,294) 97 (73,255) 479 ------------
------------ ------------ ------------ Net loss $ (234,649) $
(258,725) $ (712,791) $ (568,529) ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ Net loss per share: Basic and diluted $ (0.01) $
(0.01) $ (0.02) $ (0.02) ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Weighted average common shares outstanding: 37,940,983 37,915,462
37,933,711 37,915,462 The Company's Quarterly Report on Form 10-QSB
for the quarter ended October 31, 2006 is available for viewing at
http://www.sec.gov/. About CounterPath CounterPath Solutions, Inc.,
formerly Xten Networks, Inc., is a developer of award-winning,
carrier-grade VoIP and Video over IP SIP softphones for telecom and
Internet telephony service providers, cable operators, IP-PBX
manufacturers and infrastructure manufacturers. CounterPath's SIP
softphones and softphone SDKs (Software Development Kits), which
provide VoIP, Video over IP, IM (Instant Messaging) and Presence
functionality and can be preconfigured to our customer's VoIP
service, are predominantly licensed on a per seat or per subscriber
basis, either co-branded or private labeled. CounterPath's
technology is deployed by over 235 customers in more than 50
countries. Additional information about CounterPath and
CounterPath's products and services is available at
http://www.counterpath.com/. Safe Harbor Statement under the U. S.
Private Securities Litigation Reform Act of 1995: Statements in
this document regarding managements' future expectations, beliefs,
goals, plans or prospects constitute forward-looking statements
that involve risks and uncertainties, which may cause actual
results to differ materially from the statements made. For this
purpose, any statements that are contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes",
"anticipates", "plans", "intends", "will", "should", "expects",
"projects", and similar expressions are intended to identify
forward-looking statements. You are cautioned that such statements
are subject to a multitude of risks and uncertainties that could
cause actual results, future circumstances, or events to differ
materially from those projected in the forward-looking statements.
These risks include, but are not limited to, those associated with
competition, securing and maintaining corporate alliances, market
acceptance of the Company's products, product obsolescence, the
strength of intellectual property, financing capability, the
potential dilutive effects of any financing and other risks
detailed from time-to-time in the Company's public disclosure
documents and other filings with the U.S. Securities and Exchange
Commission and Canadian securities regulatory authorities.
Forward-looking statements are made as of the date hereof, and the
Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. CONTACT: David Karp, CFO, (604)
320-3344 x114, DATASOURCE: CounterPath Solutions, Inc. CONTACT:
David Karp, CFO, (604) 320-3344 x114,
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