2 0 12 2013 2014 2015 2016 Corporate Report

To my fellow shareholders,

Looking back, fiscal year 2013 was another solid year for our company. CounterPath realized many achievements while also overcoming a

few challenges along the way. Our continued investment in the mobile softphone apps space and cloud technology services along with our

steadfast customer commitment not only differentiates us from our competitors, but shows the hard work and dedication of the entire team at

CounterPath. It is these efforts that build strong shareholder value, help make each of our customers successful in deploying our technology,

foster collaboration and in turn innovation across our product portfolios, and continue to forge new paths to help

our enterprise and operator customers connect, communicate and collaborate every day.

Our PerformanceOn an annual basis, CounterPath’s performance held strong in fiscal 2013. Revenue for the year was

$15.2 million compared to $14.1 million in 2012, an increase of 8%. Sales in markets in outside of

Europe grew by 24% in fiscal 2013. To continue our growth objectives in fiscal year 2014 we plan

to invest our sales and marketing efforts in other markets that have underperformed but are now

posied to grow based on the successful deployments of VoIP and related applications. Net income

for the year was $0.5 million, or $0.01 per share, compared to a net loss of $2.1 million, or $0.05

per share, for the comparable period last year. Our balance sheet continues to be very strong. At

April 30, 2013, we had no debt and increased our cash equivalents of $11.2 million compared to

$8.2 million at April 30, 2012.

Message from the President and CEO

Revenue

$14

$13

$16

$15

$12

$11

$10

$9

$8

Millions

FY2011 FY2012 FY2013

We announced the worldwide availability of Bria, Android Tablet •

Edition, opening our technology to an entirely new customer base.

Rogers launched our tablet versions of Bria to further expand the •

services base. We continue to see traction building there and

we are working closely with Rogers and expect to see additional

revenues from this relationship in the coming quarters.

We announced our close partnership with Acme Packet (acquired •

by Oracle in February 2013) that included a tightly couple

solution between Bria and the Acme SBC (Session Board

Controller) that defined a new level of service capability for wireline

and wireless operators. The category, Operator OTT, is focused on

providing solutions similar to Rogers One Number that is critical for

all operators to consider when competing with Internet OTT

players such as Skype, Viber, Rebtel and others.

We added a significant partner in the Enterprise distribution •

market, Arrow Electronics. The company is the largest value added

distributor (VAD) in the US with over 120,000 original equipment

manufacturers, contract manufacturers and commercial customers

cross more than 390 locations in 53 countries.

We continued to build out our softphone product lines while •

expanding our server based products for unified communications

and provisioning. In particular we unveiled key new features and a

reporting module with our industry leading provisioning server

(CCS) – a carrier grade solution enabling customers to remotely

manage their Bria desktop, mobile and tablet softphones. CCS’

leading market is enterprise, fueled by the BYOD trend and since

its launch last year, the CCS has been adopted in over 10

countries by leading enterprises and operators.

We graduated to the TSX – from the TSX Venture Exchange – and •

listed on the NASDAQ Capital Market – this fiscal year. The moves

are both a result of our continued success and leadership in the

competitive Telecommunications sector.

We strengthened our intellectual property with a significant patent •

award covering the automatic handover of calls (voice or data)

based on a users location or presence. I believe the equity we

have built from our intellectual property future – proofs

CounterPath for years to come.

Cash$12

$10

$8

$6

$4

$2

$-

Millions

FY2011 FY2012 FY2013

The year was also highlighted by technology achievements and recognitions:

Donovan Jones

President and Chief Executive Officer

Our Customers At CounterPath, our customers are our number one priority. While driving business value and maximizing our revenues are critical, we also focus

on building solid partnerships through our demonstrated customer commitment. Whether it is optimizing our technology integration with channel

partners’ solutions, helping operators promote and demonstrate the value of the their mobile VoIP offerings to their end users, or working directly

with enterprise customer implementations, the CounterPath team is dedicated to making our customers successful.

This past year, as we continued to strengthen our customer base and gain credibility with Tier One operators through deployments such as

Rogers One Number and Altibox’s Loop we have set the stage with our customers on what’s possible today with CounterPath’s award-winning

technology. We also achieved significant traction in the Cable market as cable companies are looking to develop mobile offerings as a new source

of revenue and part of their customer retention strategy.

Specifically Cable operators (a.k.a., MSOs) are looking to launch the Bria softphone with our provisioning server technology to extend their home

phone over VoIP to desktop, and Wi-Fi enabled mobile devices, and tablets. We look forward to announcing further deployments as they become

available throughout the next year.

We also entered into a partnership with Primus, Canada’s largest alternative telecommunications service provider and helped them introduce a

Primus branded softphone for the Apple iOS and Google Android platforms. This solution was tailored to enable enterprises to securely extend

VoIP calling and PBX features to Android and iPhone users, including employee-owned mobile phones and tablets. The Primus Softphone also

employs an administrative control over the end-users abilities to use the application. This was a key feature as it allows the enterprise to exert

some level of control in a Bring Your Own Device environment.

Our Technology With the largest list of interoperability with IP PBXs and SIP-based network infrastructure softswitches, Bria is built toward industry standards with

proven multimedia technology that provides a high-quality, unified communications experience and voice and video calls over fixed, mobile and

Wi-Fi broadband networks. Bria softphone’s ability to use mobile and Wi-Fi networks gives businesses new options for “always on” connectivity

while realizing cost savings through low cost or free Wi-Fi networks.

An example of our on-going efforts to ensure our technology maintains leadership position is the addition of Tunneled Services Control Function

(TSCF), a joint solution developed between CounterPath and Oracle (formerly Acme Packet). This new capability allows our softphone software

to easily traverse firewalls, provide secure voice, video, IM, presence, and SMS to mobile and tablet apps. The technology combination also

enables seamless session handover (e.g., between Wi-Fi and mobile data networks). All of this with even better quality in certain scenarios (i.e.,

high packet loss networks) than the well known Internet OTT services such as Skype, Viber, Rebtel, and Google Voice.

Our server development team also continued to enrich the CCS product offering, including new reporting and analytic modules that support

complex deployments and implementations. With the market going through unprecedented technological and end user behavior changes driven

by BYOD as well as demand for a consistent experience across all devices, the CounterPath CCS has been augmented to enable new features

and modules that focus on solving the issues with managing a few to millions of deployed softphones. The client provisioning technology serves

to provide maximum versatility with the ability to be deployed either as a CounterPath hosted cloud-based service or as a premise-based model

with the customer responsible for managing all hardware and connectivity needs. We believe the CCS is the first of our server framework to bring

new and exciting services and applications that will make our customers more competitive in the market.

Our Future In summary, we accomplished a lot in 2013 and set the stage for continued growth in 2014 and beyond. As CounterPath continues to be

recognized as a technology leader in this space and as highlighted above, continues to nurture and build a formidable list of customers and

partners, I am confident the company is very well positioned for future growth.

Let me close by expressing my pride again to the entire CounterPath team for bringing us to this point, and my gratitude to you, our shareholders,

for your unwavering support. I trust that you share our excitement about our company’s performance and the way in which we are building

towards an even bigger and brighter future.

Thank you,

Converged Desktop

It has been a decade of communication evolution and technical innovation - from the historic first launch of

the CounterPath X-Pro softphone to the debut of a cloud provisioned mobile VoIP softphone, this snapshot

highlights key moments in our history. CounterPath – Defining how operators and enterprises connect,

communicate, and collaborate.

A Decade of Selling Softphones

20032006

20072004

2005

• TeamedupwithMobilkom Austria to deliver VoIP pilot

• DevelopednewVoIP softphone solution with British Telecom

• AT&Tintroduced Callvantage Softphone service, a branded version of eyeBeam

• HelpedVerizondeliverUC solution

• DebutedBria,ourfirst contact centric softphone

• Acquiredenterprise softphone startup NewHeightsSoftware

• Madehistorywiththefirst VoIP call at 40,000 feet aboard a flight from Munich to Los Angeles using the eyeBeam softphone

• SignedagreementwithLucent to be part of an initiative to deliver VoIP and IMS-Enabled Services Via Mobile Devices and PCs

• 8x8Inc.licenseseyeBeam to deliver a voice and video softphone for the Packet8 Broadband Phone Service

• Launchedourfirst commercial SIP softphone - X-Pro

340,000

20092012

20132010

20112008

• CounterPath’sOperatorOTT technology behind Rogers’ One Number service

• CounterPathenabledIT Managers to take advantage of Mobile VoIP with BYOD focused solution

• CommencedCapitalMarket trading on the NASDAQ and graduated to the TSX

• ForayintoCloudspacewith cloud-based telco OTT offering

• TeamedwithAcmePacket to deliver OTT solution to operators

• NTTusesBriaandCCSto extend mobile VoIP and BYOD into Japanese enterprises

• Establishedpresencein mobile VoIP market with introduction of mobile softphone apps for iOS and Android smartphones

• GrantedpatentforPresence Detection across fixed and mobile networks

• TeamedwithGENBAND to extend A2 Unified Communication Services to mobile and tablet subscribers

• LaunchedBriaiPad,the world’s first iOS softphone

• MademoveintoFMC space with strategic acquisition of BridgePort NetworksandFirstHand Technologies

• Commencedtradingonthe TSX-Venture Exchange

• UnveiledBriaforBroadWorks Softphone

• Genesyslicensedour technology to bring VoIP to Call Centres worldwide

• X-Lite,ourfreesoftphone, reached 340,000 downloads per month

Over The Top (OTT) has changed the way people communicate with services and applications that ride on

top of operator and business networks and the market is migrating to app driven communications across

any device, any platform and any network.

The impact of Internet OTT providers is becoming more and more apparent and is eroding voice, video

and messaging revenue from traditional operators. As an example, Informa Telecom and Media reports

that daily Internet OTT messaging traffic has overtaken daily SMS traffic with 19.1 billion OTT messages

sent versus 17.6 billion SMS messages. Infonetics Research also reported that Internet OTT mobile VoIP

subscribers rose more than 550% in 2012, to over 640 million, and are expected to approach the 1 billion

mark in 2013. Effectively that represents over a quarter of all mobile voice subscribers. Internet OTT players

like Rebtel, Skype, Viber, and WhatsApp will continue to erode operator revenues until the operators

themselves deploy a similar solution.

Clearly, the solution to the OTT threat is for operators to deploy their own OTT offering. Canadian operator

Rogers had this same vision when they developed Rogers One Number using our technology. This similar

vision has spread to other operators around the world as they consider Operator OTT deployments while

industry mapped standards based solutions such as RCS (Rich Communications Suite) and VoLTE (Voice

over LTE) continue to evolve.

An Operator OTT solution gives customers an immediate mobile VoIP solution that is both network and

device agnostic and enables rich communications offerings such as enhanced messaging and presence,

picture and multimedia transfer, and impressive video chat.

Enterprise OTT is also on the rise as CIOs and IT directors look to round out their communications services

and mobilize PBX services. With Bring Your Own Device (BYOD) penetration predicted to reach 390 million

by 2015 (Source: Research and Markets), IT departments are struggling with managing a variety of devices,

increased demands for support and security concerns.

According to Gartner, during the period of 2012-2017, PC Softphones and Mobile Softphones will have

a compounded annual growth rate (CAGR) of 16.9%, which is the highest growth rate of business

telephones worldwide within the Enterprise and will represent 22% of all telephone unit shipments by 2017.

OTT services give IT departments the ability to manage telecommunication costs and improve productivity

through “always available” voice, video messaging and presence offerings in a secure manner. Also, due to

their plug-n-play nature, IT departments can easily deploy Enterprise OTT solutions alleviating the need to

devote any resources to internal development.

OTT Paving the Way for Next Generation SolutionsMarket

With the barrage of Internet OTT and BYOD technology, services, operators are looking for ways

to leverage mobile and cloud technologies to protect market share, create innovative new service

offerings and compete in the increasingly competitive global landscape.

The CounterPath Bria softphone suite enables any device, any platform, and any network services

base for operators to build their own unique offering to exceed the service capabilities of Internet

OTT players. CounterPath is uniquely positioned with its leading Bria products across desktop, tablet

and smartphones that are fully customizable based on the operators requirements. CounterPath has

worked with hundreds of operators to enable services that are highly differenced from Internet OTT

and “in-market” competitors. This is what separates CounterPath from the rest.

CounterPath has developed an unprecedented solution set for Enterprise OTT offerings that help

IT departments manage telephony and messaging deployments through the powerful Bria product

suite. CounterPath’s provisioning platform, the Client Configuration Server (CCS), has been tightly

coupled with Bria to enable an effective solution to turn BYOD from a problem into an opportunity.

With the CCS, IT departments can manage hundreds of settings from the cloud without having to

send a new Bria application to the user. The CCS also has optional modules that can collect end

user logs as well as provide real-time analytics in order for IT managers to understand potential

problems even before an end user notices service issues. Finally, because CounterPath certifies

the latest mobile and tablet devices and keeps the applications updated before operating systems

hit the streets, the burden of Enterprise IT verification is eliminated. This means an IT manager

can deploy with confidence, knowing that the Bria applications “just works”. With Bria for iOS and

Android smartphones and tablets, Enterprises can give employees the freedom to access their work

communication systems from their personally owned, preferred device, with full access to company

directories, messaging and presence features.

In cases where customers are looking for additional features, custom branding or just a different look

and feel – all CounterPath products are customizable to meet even the most stringent requirements.

This is a key differentiator for CounterPath and more important, helps future proof our customers’

offerings. Our market approach and solutions forges a long term relationship between our customers

and CounterPath that is unparalleled by any other similar offering.

Enabling our Customers for SuccessSolutions

With Operator and Enterprise OTT top of mind for all of our customers,

our focused product offerings in the market have allowed CounterPath

to become a integral part of both our operator and enterprise

customers’ solutions. The combination of our desktop, mobile

and tablet softphone suite and cloud server technology provides a

compelling offer to address the competitive and productivity challenges

our customers face and that are fueled by the ever-increasing pace of

technological change and new business models.

Todd Carothers - Executive Vice President of Marketing and Products

During fiscal year 2013, CounterPath grew revenues and

strengthened our balance sheet enabling us to invest in

additional resources. These investments, particularly in

sales and marketing, will enable CounterPath to broaden

and further penetrate our existing customer base.

David Karp - Chief Financial Officer

One of our top priorities this past year, and that will be an

ongoing initiative for us in fiscal year 2014, is to become

more deeply integrated with our partners and distributors by

working to build a ‘domino’ effect that will see our products

and services proliferated across multiple verticals and

organizations.

Tom Smith - Executive Vice President of Sales

Executive Team Donovan Jones – President, Chief Executive Officer

David Karp – Chief Financial Officer

Todd Carothers – Executive Vice President of Marketing and Products

Thomas Smith – Executive Vice President of Sales

Robert Brown – Vice President of Marketing and Communications

Michael Doyle – Vice President of Technology

Bruce Ford – Vice President of Product Management

MichaelHill–VicePresidentofClientEngineering

Glen Schmid – Vice President of Business Development

Jim O’Brien – Director of Server Engineering

Nemer D. Abourzk – General Counsel

Board of DirectorsTerence Matthews - Chairman of the Board

Owen Matthews - Vice Chairman of the Board

Chris R. Cooper - Director

Donovan Jones - President, Chief Executive Officer

Bruce A. Joyce - Director

Larry Timlick - Director

Advisory BoardAndy Abramson - CEO, Comunicano, Inc.

Peter van der Gracht – Chair, Board of Directors, Wavefront

Stephen P. Cho, Ph.D. - Director, Channels and Business Development, Google Enterprise

AlanDuric-Co-founder&CTOofTelioAS

RonaldGruia-SeniorStrategicAnalyst,Frost&Sullivan

Rohan Mahy - Senior Consultant

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

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 HeadquartersSuite 300, One Bentall Centre 505 Burrard Street, Box 95 Vancouver, BC V7X 1M3 Canada

www.counterpath.com

Transfer Agent & Registrar Valiant Trust Company

3rd Floor, 750 Cambie Street Vancouver, BC V6B 0A2 Canada

www.valianttrust.com

Auditors BDO Canada LLP

600 Cathedral Place, 925 West Georgia Street Vancouver, BC V6C 3L2 Canada

www.bdo.ca

Legal Counsel Clark Wilson LLP

800 - 885 West Georgia Street Vancouver,BCV6C3H1Canada

www.cwilson.com

FORWARD-LOOKING STATEMENTSThis Corporate Report contains ‘forward-looking statements”. These statements relate to future events of the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”,”enable”, “intends”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. 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 our sales from reporting period to reporting period due to extended sales cycles as a result of selling our products through channel partners or the length of time of deployment of our products by our customers (3) the Company’s ability to control 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 parties 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.

All financial information is reported in United States dollars.

CounterPath has filed its fiscal 2013 10K report, a copy of which may be obtained from

EDGAR at www.sec.gov or SEDAR at www.sedar.com

2007 2008 2009 2010 20