VANCOUVER, March 9 /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 third quarter ended January 31, 2007, and
updated its fiscal 2007 revenue guidance. Third quarter highlights:
- Revenues for the nine months ended January 31, 2007 were
$4,441,256, an increase of 41% over the $3,151,329 in revenues
recorded for the nine months ended January 31, 2006, while revenues
for the quarter ended January 31, 2007 were $1,007,582, a decrease
of 19% from the $1,237,932 in revenues recorded for the quarter
ended January 31, 2006. - Number of telecom customers deploying our
softphone increased by 23 to 259. - Announcement of partnership
with Huawei Technologies Co., Ltd., a leader in providing next
generation telecommunications network solutions for operators
around the world, to provide enriched services for global telecom
network operators based on the IP Multimedia Subsystem (IMS). -
Improved cash position through the raising of an incremental $2
million in capital through the issuance of 5% convertible
debentures to existing and new investors. - Received a 2006 Product
of the Year Award by Technology Marketing Corporation (TMC(R))'s
INTERNET TELEPHONY magazine for CounterPath's eyeBeam(TM) 1.5
softphone. - CounterPath Solutions named among Canada's 20 Best
Small and Medium Employers. "Our company continues to be the SIP
softphone of choice for large telecom service providers and
infrastructure manufacturers, as demonstrated by our customer list,
and I am personally proud of our team and what we have achieved to
date," stated Mark Bruk, Chief Executive Officer of CounterPath.
"Notwithstanding a significant pipeline of revenue opportunities,
our Q3 revenue results were impacted by a product launch delay, a
focus of engineering resources on meeting existing customer
commitments, deployment delays by existing customers and a
lengthened sales cycle, and it is now unlikely that we will meet
our previous revenue guidance of $10 million within the fiscal 2007
time frame. We will continue to see increasing software and service
revenues from our telecom service provider customers, such as
AT&T, British Telecom, Deutsche Telekom, mobilkom austria and
Portugal Telecom, as the momentum behind their deployments of our
software escalates. In addition, our infrastructure manufacturer
customers and partners such as Cisco, Alcatel-Lucent and Huawei
will drive revenues and new partner deployment opportunities and we
continue to expand on our interoperability with key industry
players like Sylantro, Nortel and BroadSoft while establishing key
partnerships such as with Intel, Microsoft and Oracle, all of which
will serve to grow our business." Financial Results - Unaudited
(All amounts in U.S. dollars and in accordance with U.S. GAAP
unless otherwise specified) For the quarter ended January 31, 2007,
we generated $1,007,582 in revenue compared to $1,237,932 for the
quarter ended January 31, 2006, representing a decrease of 19% from
the same period last year. Software revenues were $653,332 for the
quarter ended January 31, 2007 compared to $1,033,610 for the
quarter ended January 31, 2006, representing a decrease of 37% from
revenues recorded the same period last year. For the quarter ended
January 31, 2007, service revenue grew by 73% to $354,250 compared
to $204,322 for the quarter ended January 31, 2006. Over the
current quarter, the total number of customers that have deployed
our software increased by 23 to 259, as of January 31, 2007. For
the nine months ended January 31, 2007, we generated $4,441,256 in
revenue compared to $3,151,329 for the nine months ended January
31, 2006 representing an increase of 41% or $1,289,927 over the
same period last year. We generated $3,339,116 in software revenue
for the nine months ended January 31, 2007 compared to $2,475,452
for the nine months ended January 31, 2006, representing an
increase of 35% or $863,664 over the same period last year. For the
nine months ended January 31, 2007, service revenue was $1,102,140
compared to $675,877 for the nine months ended January 31, 2006, an
increase of 63% or $426,263 over the same period last year.
Operating expenses for the quarter ended January 31, 2007 were
$1,638,966 compared to $1,276,195 for the quarter ended January 31,
2006, representing an increase of 28% or $362,771. Operating
expenses for the nine months ended January 31, 2007 were $4,913,964
compared to $3,462,866 for the nine months ended January 31, 2006,
representing an increase of 42% or $1,451,098. 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 $653,215, the majority of
which we began expensing this fiscal year. The net loss for the
quarter ended January 31, 2007 was $1,347,046 ($0.04 per share)
compared to $428,942 ($0.01 per share) recorded for the quarter
ended January 31, 2006. For the nine months ended January 31, 2007,
the net loss was $2,059,837 ($0.06 per share) compared to $997,469
($0.03 per share) recorded for the nine months ended January 31,
2006. As of January 31, 2006, we had $2,141,673 in cash compared to
$2,369,021 at April 30, 2006. Our working capital was $2,888,403 as
of January 31, 2007 compared to $1,975,881 at April 30, 2006.
Financial tables follow: COUNTERPATH SOLUTIONS, INC. CONDENSED
INTERIM CONSOLIDATED BALANCE SHEETS (Stated in U.S. dollars)
(Unaudited) January 31, April 30, 2007 2006 -------------
------------- ASSETS (Unaudited) Current assets: Cash $ 2,141,673 $
2,369,021 Accounts receivable (net of allowance of $56,121 and
$38,646, respectively) 2,174,592 477,814 Prepaid expenses and
deposits 155,089 104,927 ------------- ------------- Total current
assets 4,471,354 2,951,762 Deposits 70,413 - Equipment (net of
accumulated amortization of $568,971 and $383,975, respectively)
270,430 300,077 Other assets 22,730 8,165 -------------
------------- TOTAL ASSETS $ 4,834,927 $ 3,260,004 -------------
------------- ------------- ------------- LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and
accrued liabilities $ 1,093,830 $ 754,589 Due to related parties
25,833 34,929 Unearned revenue 319,915 115,214 Customer deposits
55,100 138 Warranty payable 88,273 71,011 -------------
------------- Total current liabilities 1,582,951 975,881
Convertible debentures 3,284,707 1,887,582 -------------
------------- Total liabilities 4,867,658 2,863,463 Stockholders'
equity: Common stock, $0.001 par value Authorized: 415,384,500
Issued and outstanding: January 31, 2007 - 37,940,983; April 30,
2006 - 37,915,462 37,941 37,915 Additional paid-in capital
4,403,264 2,750,494 Accumulated deficit (4,377,426) (2,317,589)
Accumulated other comprehensive loss - currency translation
adjustment (96,510) (74,279) ------------- ------------- Total
stockholders' equity (32,731) 396,541 ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,834,927 $ 3,260,004
------------- ------------- ------------- ------------- COUNTERPATH
SOLUTIONS, INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF
OPERATIONS (Stated in U.S. dollars) (Unaudited) Three Months Ended
Nine Months Ended January 31, January 31,
---------------------------- ---------------------------- 2007 2006
2007 2006 ------------- ------------- ------------- -------------
Revenue: Software $ 653,332 $ 1,033,610 $ 3,339,116 $ 2,475,452
Service 354,250 204,322 1,102,140 675,877 -------------
------------- ------------- ------------- Total revenue 1,007,582
1,237,932 4,441,256 3,151,329 ------------- -------------
------------- ------------- Cost of revenue: Software 179,212
156,833 637,453 335,736 Service 157,797 76,472 497,768 193,301
------------- ------------- ------------- ------------- Total cost
of revenue 337,009 233,305 1,135,221 529,037 -------------
------------- ------------- ------------- Gross profit 670,573
1,004,627 3,306,035 2,622,292 ------------- -------------
------------- ------------- Operating expenses: Sales and marketing
409,856 121,523 1,164,793 494,923 Research and development 647,664
671,747 1,942,508 1,722,617 General and administra- tive 581,446
482,925 1,806,663 1,245,326 ------------- -------------
------------- ------------- Total operating expenses 1,638,966
1,276,195 4,913,964 3,462,866 ------------- -------------
------------- ------------- Loss from operations (968,393)
(271,568) (1,607,929) (840,574) Interest and other income
(expense), net ($378,653) (157,374) ($451,908) (156,895)
------------- ------------- ------------- ------------- Net loss $
(1,347,046) $ (428,942) $ (2,059,837) $ (997,469) -------------
------------- ------------- ------------- -------------
------------- ------------- ------------- Net loss per share: Basic
and diluted $ (0.04) $ (0.01) $ (0.06) $ (0.03) -------------
------------- ------------- ------------- -------------
------------- ------------- ------------- Weighted average common
shares outstanding: 37,940,983 37,915,462 37,936,135 37,915,462 The
Company's Quarterly Report on Form 10-QSB for the quarter ended
January 31, 2007 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 250 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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