CounterPath Reports Fourth Quarter
and Fiscal 2013 Financial Results

Company Reports Record Annual Revenues

VANCOUVER, BC, Canada — July 25, 2013 — CounterPath Corporation (“CounterPath” or the “Company”) (NASDAQ: CPAH) (TSX-V: CCV), a leading developer of award-winning desktop, tablet and mobile VoIP, video and messaging software products and solutions, today announced the financial and operating results for its fourth quarter and fiscal year ended April 30, 2013.

Fiscal Fourth Quarter Financial and Operating Highlights

• Quarterly revenue of $4.0 million, compared to revenue of $3.3 million for the previous quarter and $4.4 million for the fourth quarter of fiscal year 2012.

• GAAP gross margin of 86%. Non-GAAP gross margin of 87%.

• Non-GAAP income from operations of $0.04 million compared to Non-GAAP income from operations of $0.4 million for the fourth quarter of fiscal year 2012.

• Net income of $0.1 million, or $0.00 per share, compared to a net loss of $1.2 million, or a loss of $0.03 per share, for Q4-2012. The $0.1 million net income includes a non-cash gain of $0.3 million (loss of $1.4 million – Q4-2102) for the fair value adjustment on derivative instruments attributable to a change in fair value of certain warrants, the key determinant of which is proportionate to the change in the Company’s share price.

• Non-GAAP net income of $0.05 million, or $0.00 per share, compared to non-GAAP net income of $0.4 million, or $0.01 per share, for the fourth quarter of fiscal year 2012.

• Cash of $11.2 million as of April 30, 2013.

Fiscal 2013 Financial and Operating Highlights

• Record annual revenue of $15.2 million, an 8% increase over last fiscal year (excluding Europe, sales growth of 24% year-over-year).

• GAAP gross margin of 85%. Non-GAAP gross margin of 86%.

• Non-GAAP loss from operations of $0.4 million compared to a non-GAAP income from operations of $0.1 million last fiscal year.

• Net income of $0.5 million, or $0.01 per share, compared to a net loss of $2.1 million, or a loss of $0.05 per share, last fiscal year. The $0.5 million net income includes a non-cash gain of $1.8 million (loss of $0.7 million – 2012) for the fair value adjustment on derivative instruments.

• Non-GAAP net loss of $0.3 million or a loss of $0.01 per share, compared to a non-GAAP net income of $0.1 million or $0.00 per share last fiscal year.

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CounterPath Reports Fourth Quarter and Fiscal 2013 Financial Results

“It was a solid fourth quarter for the company, rounding out a year in which we posted record annual revenues, added Tier One customers, including three leading cable companies and increased our channels to market,” stated Donovan Jones, President and Chief Executive Officer. “Our sales growth was particularly strong outside Europe, however, some challenges in Europe affected our combined results for the year. We invested in sales and marketing in 2013 and will continue to strengthen our teams, most notably in Europe, which we expect will contribute to revenue growth this year.”

Recent Business Highlights

• Announced a global distribution agreement with Arrow Electronics, Inc., which has over 120,000 original equipment manufacturers, contract manufacturers and commercial customers across more than 390 locations in 53 countries.

• Primus Business Services announced the launch of Primus Softphone for Apple iPhone and Google Android, powered by CounterPath’s softphone technology.

• Announced that CounterPath has again been named one of the Top 250 Canadian Information and Communication Technologies (ICT) by Branham Group in the 2013 Edition of the Branham300. CounterPath was also ranked as one the industry’s Top 20 Movers and Shakers based on revenue growth year-over-year.

• Announced a Bria softphone license agreement with Jive Communications, a leading provider of hosted VoIP and unified communications to businesses and institutions.

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 in 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. The Company expects similar effects in fiscal 2014, with the first quarter expected to be a slower period.

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 fourth quarter and fiscal year ended April 30, 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 August 1, 2013. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 17363616, 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) 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 in their deployment timelines; and (2) the Company expects to increase its sales and marketing resources to support sales growth in all its key markets.

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CounterPath Reports Fourth Quarter and Fiscal 2013 Financial Results

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 our 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 our 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 on our industry, (9) the failure to develop new and innovative products using the Company’s technologies, (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 at www.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 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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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 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 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.

Reconciliation to GAAP
(Unaudited)