Related Party Transactions

6 Months Ended

Oct. 31, 2013

Related Party Transactions [Text Block]

Note 3

Related Party Transactions

The Company’s Chairman is the Chairman and founding shareholder of Mitel Networks Corporation (“Mitel”). On July 31, 2008 the Company entered into a source code license agreement whereby the Company licensed to Mitel the source code for the Your Assistant product in consideration of a payment of $650,000. Associated with the agreement, as amended on April 6, 2009, are license fees paid by Mitel of $13.50 per copy deployed, declining to $9.00 per copy deployed after two years and declining from $9.00 to $nil after four years. In addition, the agreement provides Mitel with a first right to match any third party offer to purchase the source code software and related intellectual property. As the period in which the Company earned license fees under the agreement ended on July 31, 2012, the Company’s software license revenue for the three and six months ended October 31, 2013, pursuant to the terms of these agreements, was $nil and $nil (2012 - $nil and $134,493), respectively.

During the three and six months ended October 31, 2013, the Company through its wholly owned subsidiary, CounterPath Technologies, paid $17,226 and $34,452 (2012 - $21,025 and $42,049), respectively, to Kanata Research Park Corporation (“KRP”) for leased office space. KRP is controlled by the Chairman of the Company.

The Company’s Chairman is a beneficial shareholder of Mitel Trade s.r.o. (“Mitel Trade”). On January 30, 2012, the Company sold products and services to Mitel Trade for consideration of $208,992. As at July 31, 2013, the Company determined the balance due from Mitel Trade as uncollectible and wrote off any remaining balance. As at October 31, 2013, the Company had an accounts receivable balance from Mitel Trade of $nil (April 30, 2013 - $206,500). The Company’s revenue for the three and six months ended October 31, 2013, was $nil and $nil (2012 - $10,969 and $21,938), respectively.

The above transactions are in the normal course of operations and are recorded at amounts established and agreed to between the related parties.