Fiscal details related to the acquisition

CounterPath will acquire all of the shares of NewHeights through the issuance of 40,250,000 shares of CounterPath’s common stock to shareholders of NewHeights (NewHeights shareholders who are Canadian residents may, in lieu of receiving shares of CounterPath common stock, elect to receive shares exchangeable into CounterPath shares in order to defer taxable income or gains). Immediately prior to closing, NewHeights will be debt free and have $2.5 million in cash to contribute to the combined entities. Wesley Clover has irrevocably committed a further $3.5 million to be invested over a seven month period for 8,750,000 shares of common stock bringing the total cash contribution to CounterPath by NewHeights and Wesley Clover to $6 million. Upon closing, CounterPath’s convertible debenture holders have agreed to convert their existing debentures in the amount of $4 million and invest a further $2 million for 15,000,000 shares of common stock at $0.40 per share.

At closing, CounterPath expects to be debt free, and have an additional $8 million of new cash or cash commitments. Following the investments of the convertible debenture holders and Wesley Clover, CounterPath expects that there will be a total of 101,940,983 shares of common stock outstanding (including shares exchangeable into CounterPath shares). The closing of the transaction contemplated by the definitive agreement is subject to various conditions, including approval by NewHeights’ securityholders, court approval and other customary closing conditions. The transaction is expected to close within 60 days.

The shares of CounterPath’s common stock to be issued in connection with the proposed acquisition and investments have not been and will not be registered under the Securities Act of 1933 as amended (the “Act”), and may not be offered or sold in the United States absent registration, or an applicable exemption from registration, under the Act.