Download the 2011 Corporate Report [3 MB] - CounterPath

10 2011 2012 2013 2014
Corporate Report

Millions
Message from the President and CEO
Dear Fellow Shareholder:
I am pleased to report that CounterPath recorded a successful year in fiscal 2011. Revenue grew to over $11 million, a year
over year increase of 38%, with Q4 representing a second quarter of record revenue. Recognition of our revenue growth
and overall financial performance resulted in CounterPath being named to the TSX Venture 50, a ranking of top performing
companies from among the more than 2,000 listed on the TSX Venture Exchange.
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
Revenue by Quarter
Fiscal Year 2011
One of our financial objectives for the year was to continue a path toward profitability by
carefully managing costs while continuing to drive revenue growth, customer acquisition
and product innovation. This trajectory of revenue and expenses moved us closer to
profitability, recording an adjusted EBITDA (1) loss of only $31 thousand in Q4.
I am pleased to report subsequent to our year end, we closed an institutional financing
round for $5.6 million which not only helps strengthen our balance sheet, but also
allows us to expand our sales and marketing efforts, capitalizing on increased demand
and market adoption of our applications. Consumers and enterprises are beginning to
understand the cost savings, productivity and mobility afforded to them through use of
applications that free them from the constraints of a typical hardware based deskphone.
Fortifying our stronghold in the desktop softphone market
In terms of our desktop offerings, we have never been better positioned to serve our growing
enterprise customer segment. Our most significant addition was the Bria 3.2 update which bolstered our
enterprise feature suite with the addition of Microsoft Outlook integration, multiple account integration support and
the ability to create internal company chat rooms. Bria 3.2 also laid the foundation for future social networking integration
support. We also released our first version of Bria for Linux, which, together with Bria Windows and Mac versions, give
enterprises unprecedented flexibility when implementing VoIP in their organizations. Several tier one call centers have
embraced our Linux client to improve employee productivity, decrease complexity and save significant costs.
Q1-11
Q2-11
Q3-11
Q4-11
Executing on our mobility strategy
Our priority is to enable our customers to not only extend VoIP beyond the desktop, but to widen their footprint and
maximize their penetration into their targeted enterprise and consumer markets. Building on the proven strength of our
keystone desktop product, Bria, we developed mobility applications for two of the largest mobile operating systems, Apple
iOS and Android. Initially launched with High Definition voice and later expanded to include support for SMS and instant
messaging, Bria for iPhone and Bria for Android were met with enthusiasm among existing customers and the market.
While we have gained industry recognition for our mobile softphone applications, much
of our mobility capability rests behind the scenes with our Network Convergence
Gateway (NCG). This year we launched an upgrade to the platform that provides
single-number reachability for voice, Instant Messaging and presence, and
SMS across an operator’s existing wireline VoIP network and on feature
phones, smartphones or tablets from any mobile operator. In addition to the
attractive one-number accessibility play, this opens the door for wireline and
VoIP providers, enabling them to enter the mobile market. The networkagnostic
flexibility gives consumers and business users the ability to switch
devices and operators to get the best deal or new device. This is an industry
exclusive feature.
Our new NCG Exchange takes this one step further by creating an immediate
go-to-market capability for CounterPath wireline customers by enabling them to
provide an over-the-top (OTT) solution inexpensively and on any mobile network.
Thousands
$0
-$100
-$200
-$300
-$400
-$500
-$600
-$700
-$800
-$900
Adjusted EBITDA (1) by Quarter
Fiscal Year 2011
Q1-11
Q2-11
Q3-11
Q4-11
(1) Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is a “non-GAAP” financial measure which excludes stock-based compensation, amortization of
intangible assets, warrant expense, non-cash foreign exchange loss (gain), gain on settlement of debt and accretion of convertible debenture discount relative to net loss, calculated
in accordance with GAAP. For a reconciliation to GAAP, refer to the inside back page of this Corporate Report.

With the combination of our mobile and desktop softphone suites, CounterPath is well positioned to be the
“one stop shop” of softphones for our customers.
Expanding customer and partner collaborations
CounterPath serves more than 300 wireline and mobile service providers, OEMs and enterprises across the
globe and this past year we developed several important collaborations. Among high-profile partnerships and
agreements with the likes of Metaswitch and BroadSoft, NEC launched its Mobile Unified Communication solution,
which uses the CounterPath Enterprise Mobility Gateway to integrate mobile devices into the enterprise network.
We also launched Bria for Genesys, making our voice and video softphone a significant feature of Genesys’
Contact Center Solution. Finally, we launched an Internet Telephony Service Provider (ITSP) partner program to
simplify the softphone experience by providing end users with a quick and easy way to either subscribe to an
ITSP within their Bria mobility app or select from pre-provisioned ITSP options.
Solidifying our reputation as leaders in technology
In fiscal 2011, CounterPath was granted two new patents, bringing the total number of patents granted in our
portfolio to 12 granted and 10 pending. In keeping with our patent strategy, these patents serve to create a
barrier to our competitors and to incentivize customers who need to differentiate themselves in an increasingly
competitive market.
In February of this year, our patent portfolio was recognized for technology leadership by MDB Capital Group
which named us among the “Best & Brightest” in this category. This is an achievement of which we are
proud because it is a recognition of the value of our patent portfolio.
Looking ahead to the next game-changers
Market conditions, together with the traction and customer response that we are seeing for our solutions, tell us
we are in the sweet spot.
As softphone adoption becomes increasingly mainstream, we continue efforts to extend our reach within existing
customer portfolios and penetrate new markets. We also continue to develop new relationships with customers
in key markets which have the potential for long-reaching rollouts and deep integration. From our standpoint
we are witnessing an alignment of next generation networks, such as Wi-MAX and LTE, with the requirements of
consumers and business users to not only be available anytime and anywhere, but also reachable on any device.
This is an important point for CounterPath as we believe that we are the best positioned company in our industry
to offer desktop and mobile clients across Mac, Linux, Windows, iOS and
Android. This, coupled with our NCG, gives our customers and more
importantly their customers, unprecedented access to the most
common services used everyday: Voice, Video and Messaging
across a multitude of devices.
To our shareholders, customers, partners and employees,
thank you for your support. CounterPath is clearly in
a strong market position and I am looking forward to
another year of business growth.
Donovan Jones
President and Chief Executive Officer

The Market
In 2011, Unified Communications is no longer an industry concept; it is a reality. Wireline and wireless
providers, OEMs, enterprises and even consumers do not have to look far to witness examples of converged
communications in both our corporate and everyday worlds. With the prevalence of services such as Skype, Apple
FaceTime, Jajah, Fring, Viber and most recently Google+, VoIP has emerged from its cachet of mystery into the
consciousness of mainstream society.
The groundswell behind VoIP is now building momentum for the next communications game-changer: mobile VoIP.
We, as industry insiders, are already seeing this movement among our customers and it is only a matter of time
before it, also, becomes a household term.
Mobile VoIP use is on the rise and is expected to reach nearly 139
million users by 2014 1 .
A large part of the growth of mobile VoIP is attributed to enterprises as they recognize the immense benefits of
enabling mobile VoIP within their workforce. By turning mobile phones into extensions of office desk phones,
workforces have the advantage of being available anytime, anywhere, and this flexibility translates into increased
productivity. Forecasts predict that business mobile VoIP users will increase tenfold over the next five years, with IP
PBX accounting for the majority of usage (2). The relevance of fixed-mobile convergence (FMC) has never been higher.
The transition of VoIP from fixed-line phones to more mobile phones
will encourage spending in the space to rise to $6 billion by 2015 3 ,
creating a significant opportunity for equipment suppliers.
The increasing demand for smartphones is a driver of the mobile VoIP trend, but in addition to services and
applications for smartphones, companies looking to participate in the mobile VoIP movement must also cater to
the increasingly important tablet device user base.
Media tablets are poised for strong growth with worldwide end user
sales projected to total 54.8 million units in 2011, up 181 percent
from 2010, and surpass 208 million units in 2014 4 .
While initially adopted by consumers, the tablet is being deployed more and more in a corporate context.
In 2011 more than 25 percent of all tablet computers will be bought by enterprises, and that figure is likely to rise in
2012 and beyond 5 .
Service providers, network operators, OEMs and enterprises are actively seeking innovative, top-of-class and reliable
unified communication solutions to complement existing telecommunications systems and cater to the new
ecosystem of mobile users.
1 In-Stat, February 2011
2 In-Stat, July 2011
3 In-Stat, January 2011
4 Gartner, November 2010
5 Deloitte, 2011: Technology, Media and Telecommunications Predictions 2011

CounterPath offers
a
a
a
a
a
A carrier and enterprise-grade desktop softphone
Reliable mobile softphone applications for smartphones and tablets
FMC solutions that enable single-number mobile voice,
text, multimedia messaging and video services across
fixed and mobile networks
Hosted, over-the-top VoIP solutions that facilitate SMS, Instant
Messaging, presence, wireline mobility and wireline call continuity
A seamless customer experience on multiple devices, across
multiple platforms and over both fixed and mobile networks

Products
Bria Desktop Softphone
The CounterPath Bria 3 desktop softphone is a carrier-grade, next generation application for
Windows, Mac and Linux. Replacing or complementing a hard phone, Bria enables users to make
voice and video calls over the internet, see when contacts are available, send Instant Messages,
and transfer files with ease and efficiency.
Built on SIP and open standards, Bria is proven interoperable with many of the industry’s standard
platforms and devices. It also includes features specifically designed for business and enterprise
users and complements the Bria mobile suite of softphone applications.
Meet Jack
Jack is an IT manager at a midsize
business with multiple satellite
offices across the country. He is
tasked with implementing a Unified
Communications solution that will
save the company money, enhance
corporate communications
between offices, and take
advantage of VoIP technologies.

Did you know?
Bria was designed to allow
integration of open social
media applications like
Facebook and LinkedIn.
Having tested the CounterPath trial-ware client, X-Lite, Jack is considering
purchasing and deploying their fully featured softphone, Bria. Because Bria
is based on open standards, it will interoperate seamlessly with his SIP
enabled IP-PBX and allow him to quickly rollout the solution companywide
with minimal capital investment and little impact to resources.
The CounterPath Bria softphone will enable Jack’s workforce to manage
voice/video calls and Instant Messaging, all in one user interface. Being able
to see when their colleagues are available and share files through the softphone
will also increase productivity.

Products
Client Configuration Server
The CounterPath Client Configuration Server (CCS) is a carrier-grade platform for enterprises and
service providers that provides initial and ongoing configuration, as well as upgrades and downgrade
capabilities, for softphone deployments. Featuring an intuitive user interface, the CCS provides the
ability to automatically apply the proper configuration to each end-user device, periodically update
those configurations and remotely upgrade client-side software.
Did you know?
CCS is based on the CounterPath
Network Convergence Gateway
(NCG) technology. The CCS
platform inherently provides
service with the reliability and
scalability that is required for this
critical network service.
The CounterPath Client Configuration Server will allow Jack to avoid the
expense and required resources to provision and administer multiple
softphones across the company, saving time and money.
The Client Configuration Server also works for the CounterPath
Bria mobile softphone suite. Jack will be able to extend employees’
communication to their mobile devices with no additional cost to
implement and provision beyond purchasing the mobile applications.

Products
Bria Mobile Softphones
The CounterPath Bria suite of mobile softphones is composed of three highly secure, SIP-based
VoIP applications: Bria Android Edition, Bria iPad Edition and Bria iPhone Edition.
These softphone applications are designed specifically for both Android and iOS mobile devices
and facilitate easy and effective communication management over a 3G or Wi-Fi connection.
The Bria mobile suite works seamlessly with other CounterPath desktop and convergence
solutions, as well as with enterprise and carrier infrastructure equipment from major vendors such
as Alcatel-Lucent, Ericsson, BroadSoft, Metaswitch, Avaya, Cisco and NEC. Bria mobile also
supports Asterisk-based telephony systems.
Did you know?
The CounterPath mobile
softphones enable
enterprise customers to offer
customized mobile VoIP
softphone applications that
maximize their brand.
The senior executives and sales reps at Jack’s company are constantly on
the go, so enabling them to communicate seamlessly was important to
Jack. By deploying Bria for iPhone, iPad and Android in the enterprise,
Jack’s workforce can receive calls that are made to their office number
on their mobile phones, while enjoying their usual enterprise calling
features. Since the Bria mobile applications will soon include Instant
Messaging and presence, employees will also be able to manage their
availability and be connected back to the office anytime, anywhere.

Mobility Solutions
CounterPath mobility solutions enable a unified communications experience
with superior flexibility, responsiveness and efficiency.
Network Convergence Gateway (NCG)
The Network Convergence Gateway (NCG) is a carrier-based, core network, fixed-mobile convergence
server that bridges broadband and mobile networks– in both pre-IMS and IMS environments. The NCG
combines the personalization and mobility of mobile phone services with the flexibility, innovation and
outstanding cost economics of the rapidly growing VoIP sector.
The NCG enables service providers to extend single-number mobile voice, text, multimedia messaging
and video services to residential, corporate and hotspot locations with broadband access.
Did you know?
The CounterPath NCG goes
beyond rudimentary find-me/
follow-me services, such as
Google Voice, to provide a suite
of enterprise-grade singlenumber
services.

Knowing that CounterPath also offers mobile gateway solutions
targeted for service providers, Jack sets up a meeting with his
carrier to discuss how his company can leverage the CounterPath
NCG to help solve telephony obstacles among his wireline, wireless
and hybrid users.

Mobility Solutions
NCG for Mobile Operators
The NCG enables mobile operators to extend their feature sets into small and medium sized
enterprises. Additional mobile VoIP applications include Convergent Voice and Messaging for
customers, Dual-mode Handover and MNO/MNVO Interconnect.
NCG for Wireline Operators
Wireline operators can offer services such as SMS messaging, Instant Messaging, presence, wireline
mobility and wireline call continuity – all over-the-top (OTT) of mobile networks. These services are
network and device agnostic, meaning operators can issue a single VoIP phone number to their
customers to be reached by voice, Instant Message or SMS.
NCG Exchange Hosted Services
The NCG Exchange is a carrier-grade, hosted service that enables wireline operators in offering
enterprise, SMB and SOHO customers with an immediate solution for
mobile VoIP and messaging services that are delivered OTT of mobile
networks. These services, which are further enhanced with the use
of the CounterPath mobile softphone products, are both hosted
Did you know?
CounterPath believes that
and provisioned by CounterPath and requires no investment in
the power of IP telephony
infrastructure or new devices for customers. The NCG Exchange
and communications
allows wireline operators to tap into additional revenue sources
management lies in
and provide customers with value-added services, all within a
simplicity and usability from
condensed timeframe and with minimal implementation costs.
implementation to end user.
Voice
Text & Instant
Messaging
Presence
Network Convergence Gateway (NCG)
Single Identity
Seamless Services
Mobile Access
Broadband Access

NCG for Mobile Operators
Daniela manages real estate operations at Jack’s company. She has
had a busy day in the office and is getting ready to leave when
she receives a call from an important client on her Bria desktop
softphone. She answers the call, hoping for a quick conversation,
but the client has a lot of questions about an upcoming property.
She moves the call seamlessly to her mobile phone and takes
the call with her while she exits her office building and catches the
commuter train home; all while continuing her conversation.
NCG for Wireline Operators
Jack’s company is concerned with the cost of going over the company’s
mobile phone calling plan minutes, and the fact that they cannot
switch plans or carriers due to their contract. Jack subscribes to
wireline mobility services through his company’s service provider.
Now employees can use their wireline phone number for all of
their calling and messaging. When they are at home they can
make calls and send SMS messages on their landline phone
number using Bria on their computer. When they are away from
home, they use the Bria application on their smartphone and make
calls and send messages over Wi-Fi or 3G, using their wireline number.
NCG Exchange Hosted Services
Kyle is a home office worker employed at Jack’s company. As part of
their company’s VoIP initiative his IT manager, Jack, just added NCG
Exchange to their internal telephony solution suite. The subscription
based service provides the ability for Kyle to send and receive
instant messages and SMS messages on his cell phone with
the same number that he uses for his enterprise voice calls. And
because the service works on any cell phone device and doesn’t
require additional software downloads, neither Kyle nor anyone else in
the company will have to invest in a new cell phone.

Board of Directors
Terry Matthews - Chairman of the Board
Owen Matthews - Vice Chairman of the Board
Peter Charbonneau - Director
Chris R. Cooper - Director
William Jin - Director
Donovan Jones - Director
Larry Timlick - Director
Executive Team
Donovan Jones - President and Chief Executive Officer
David Karp - Chief Financial Officer
Todd Carothers - Senior VP, Marketing and Products
Robert Brown - Vice President, Product Marketing
Michael Doyle - Vice President, Technology
Michael Hryb - Vice President, Sales
Nemer D. Abourizk - General Counsel
Advisory Board
Andy Abramson - CEO, Comunicano, Inc.
Stephen P. Cho - Director, Google Apps Channels,
Google Inc.
Alan Duric - Co-founder & CTO, Telio Holding ASA
Ronald Gruia - Principal Analyst For Emerging
Telecom, Frost & Sullivan
Corporate Information
State of Incorporation: Nevada
Date of Incorporation: April 18, 2003
CUSIP: 22228P 203
ISIN: US1112512033
EIN: 20-0004161
D-U-N-S: 141691225
Corporate Headquarters
Suite 300, One Bentall Centre
505 Burrard Street, Box 95
Vancouver, BC V7X 1M3
Canada
www.counterpath.com
Auditors
BDO Canada LLP
600 Cathedral Place
925 West Georgia Street
Vancouver, BC V6C 3L2
Canada
Legal Counsel
Clark Wilson LLP
800 - 885 West Georgia Street
Vancouver, BC V6C 3H1
Canada
www.cwilson.com
Transfer Agent & Registrar
Valiant Trust Company
3rd Floor, 750 Cambie Street
Vancouver, BC V6B 0A2
Canada
www.valianttrust.com
Annual General Meeting
Date: September 27, 2011
Location: CounterPath Office,
Suite 300, One Bentall Centre
505 Burrard Street,
Vancouver, BC V7X 1M3
Canada
Corporate Governance
Code of Business Conduct and
Ethics and Compliance Program
For our Corporate Governance
program visit us online at -
www.counterpath.com/investors.html

2006 2007 2008 2009 20
CounterPath 10-K report
CounterPath has filed the associated 10-K report, a copy of which may be obtained from
EDGAR at www.sec.gov or SEDAR at www.sedar.com
FORWARD-LOOKING STATEMENTS
This Corporate Report contains “forward-looking statements”. Statements in this Corporate Report, which are not purely historical, are forward-looking
statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future, such as CounterPath’s ability to deliver
and achieve business growth and CounterPath’s ability to expand its customer base and broaden its partner collaborations in fiscal 2012. It is important to
note that actual outcomes and CounterPath’s actual results could differ materially from those projected in any forward-looking statements due to numerous
factors, including, 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 and the Company’s interim and annual filings and other disclosure documents filed from time-to-time on SEDAR.
All financial information is reported in United States dollars.