10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2018

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number 001-35592

COUNTERPATH CORPORATION
(Exact name of registrant as specified in its charter)

Nevada	20-0004161
(State or other jurisdiction of incorporation or	(IRS Employer Identification No.)
organization)

Suite 300, One Bentall Centre, 505 Burrard Street, Vancouver, British Columbia, Canada V7X 1M3
(Address, including zip code, of principal executive offices)

(604) 320-3344
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]        No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]        No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer	[   ]
Non-accelerated filer   [   ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)	Emerging growth company	[   ]

1

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes [   ]        No [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [   ]        No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 5,935,872 shares of common stock issued and outstanding as of March 8, 2018.

2

COUNTERPATH CORPORATION
JANUARY 31, 2018 QUARTERLY REPORT ON FORM 10-Q

INDEX

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	35
Item 4.	Controls and Procedures.	35
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	36
Item 1A.	Risk Factors.	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	43
Item 3.	Defaults Upon Senior Securities.	44
Item 4.	Mine Safety Disclosures.	44
Item 5.	Other Information.	44
Item 6.	Exhibits.	44

3

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

It is the opinion of management that the interim consolidated financial statements for the quarter ended January 31, 2018 include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading.

In the interim consolidated financial statements for the quarter ended January 31, 2018, all amounts are expressed in United States dollars, unless otherwise indicated. The interim consolidated financial statements for the quarter ended January 31, 2018 are prepared in accordance with generally accepted accounting principles in the United States.

COUNTERPATH CORPORATION
INDEX TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)
(Stated in U.S. Dollars)

	Page
Interim Consolidated Balance Sheets	5
Interim Consolidated Statements of Operations	6
Interim Consolidated Statements of Comprehensive Loss	6
Interim Consolidated Statements of Cash Flows	7
Interim Consolidated Statement of Changes in Stockholders’ Equity	8
Notes to the Interim Consolidated Financial Statements	9

4

COUNTERPATH CORPORATION
INTERIM CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
(Unaudited)

		January 31,			April 30,
		2018			2017
Assets
Current assets:
Cash and cash equivalents	$	3,048,418		$	2,071,019
Accounts receivable (net of allowance for doubtful accounts of
$249,995 and $80,232, respectively)		3,932,957			2,133,469
Prepaid expenses and deposits		236,987			170,853
Total current assets		7,218,362			4,375,341
Deposits		102,417			91,400
Equipment		125,094			125,813
Goodwill – Note 2(e)		7,144,260			6,440,955
Other assets		210,865			199,637
Total Assets	$	14,800,998		$	11,233,146
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	2,080,402		$	1,825,528
Accrued warranty		65,330			54,365
Customer deposits		2,794			6,211
Unearned revenue		2,421,672			2,134,948
Total current liabilities		4,570,198			4,021,052
Deferred lease inducements		17,611			23,022
Unrecognized tax liability		9,763			9,763
Total liabilities		4,597,572			4,053,837
Stockholders’ equity:
Preferred stock, $0.001 par value
Authorized: 100,000,000
Issued and outstanding: January 31, 2018 – nil; April 30, 2017 – nil		–			–
Common stock, $0.001 par value – Note 5
Authorized: 10,000,000
Issued and outstanding: January 31, 2018 – 5,935,206; April 30, 2017 – 5,005,245		5,935			5,005
Treasury stock		–			(60	)
Additional paid-in capital		75,071,382			71,680,575
Accumulated deficit		(62,253,057	)		(60,481,015	)
Accumulated other comprehensive loss – currency translation adjustment		(2,620,834	)		(4,025,196	)
Total stockholders’ equity		10,203,426			7,179,309
Liabilities and Stockholders’ Equity	$	14,800,998		$	11,233,146
Commitments – Note 7
Contingencies – Note 8

See accompanying notes to the interim consolidated financial statements

5

COUNTERPATH CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2018			2017			2018			2017
Revenue – Note 6:
Software	$	1,791,165		$	1,324,203		$	5,306,925		$	4,223,066
Subscription, support and maintenance		1,120,690			1,031,162			3,069,371			2,944,349
Professional services and other		172,048			199,994			1,230,978			1,165,051
Total revenue		3,083,903			2,555,359			9,607,274			8,332,466
Operating expenses:
Cost of sales (includes depreciation of $4,753 (2017 –
$4,975))		362,057			360,722			1,131,122			1,334,385
Sales and marketing		996,470			819,958			3,031,981			2,770,367
Research and development		1,361,219			1,215,783			4,052,129			3,524,959
General and administrative		800,049			678,243			2,407,234			2,531,322
Total operating expenses		3,519,795			3,074,706			10,622,466			10,161,033
Loss from operations		(435,892	)		(519,347	)		(1,015,192	)		(1,828,567	)
Interest and other income (expense), net:
Interest and other income		–			36			–			222
Interest expense		(123	)		–			(338	)		–
Foreign exchange gain/(loss)		(342,328	)		(162,829	)		(756,512	)		218,274
Net income (loss) for the period	$	(778,343	)	$	(682,140	)	$	(1,772,042	)	$	(1,610,071	)
Net income (loss) per share:
Basic and diluted – Note 9	$	(0.14	)	$	(0.14	)	$	(0.33	)	$	(0.35	)
Weighted average common shares outstanding:
Basic and diluted – Note 9		5,539,352			4,789,675			5,354,690			4,631,472

See accompanying notes to the interim consolidated financial statements

COUNTERPATH CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2018			2017			2018			2017
Net income (loss) for the period	$	(778,343	)	$	(682,140	)	$	(1,772,042	)	$	(1,610,071	)
Other comprehensive loss:
Foreign currency translation adjustments		633,751			318,210			1,404,362			(534,069	)
Comprehensive loss	$	(144,592	)	$	(363,930	)	$	(367,680	)	$	(2,144,140	)

See accompanying notes to the interim consolidated financial statements

6

COUNTERPATH CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)

		Nine Months Ended
		January 31,
		2018			2017
Cash flows from operating activities:
Net (loss) for the period	$	(1,772,042	)	$	(1,610,071	)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred lease inducements		(7,626	)		(7,419	)
Depreciation and amortization		85,153			85,918
Stock-based compensation		494,883			701,515
Issuance of common stock for services		11,105			13,963
Foreign exchange loss (gain)		707,942			(267,383	)
Changes in assets and liabilities:
Accounts receivable		(1,799,488	)		394,047
Prepaid expenses and deposits		(46,973	)		31,366
Accounts payable and accrued liabilities		166,680			(33,730	)
Unearned revenue		286,724			274,314
Accrued warranty		10,965			(2,730	)
Customer deposits		(5,730	)		14,721
Net cash used in operating activities		(1,868,407	)		(405,489	)
Cash flows from investing activities:
Purchase of equipment		(73,415	)		(81,678	)
Purchase of other assets		(13,864	)		(24,600	)
Net cash used in investing activities		(87,279	)		(106,278	)
Cash flows from financing activities:
Common stock issued		2,895,655			898,693
Common stock repurchased		(32,059	)		(8,824	)
Net cash provided by financing activities		2,863,596			889,869
Foreign exchange effect on cash		69,489			(16,142	)
Net increase in cash		977,399			361,960
Cash, beginning of the period		2,071,019			2,159,738
Cash, end of the period	$	3,048,418		$	2,521,698
Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	341		$	–
Income taxes paid	$	–		$	–

See accompanying notes to the interim consolidated financial statements

7

COUNTERPATH CORPORATION
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
for the Nine Months Ended January 31, 2018
(Stated in U.S. Dollars)
(Unaudited)

	Common Shares					Treasury Shares
																		Accumulated
	Number					Number						Additional						Other
	of					of						Paid-in			Accumulated			Comprehensive
	Shares			Par Value		Shares			Par Value			Capital			Deficit			Loss			Total
Balance, April 30, 2017	5,005,245		$	5,005		(59,900	)	$	(60	)	$	71,680,575		$	(60,481,015	)	$	(4,025,196	)	$	7,179,309
Shares issued:
Private placement, net of share issuance costs – Note 5	966,740			967		–			–			2,831,479			–			–			2,832,446
Issuance of common stock for services – Note 5	14,000			14		–			–			33,303			–			–			33,317
Share repurchase plan	–			–		(13,600	)		(14	)		(33,807	)		–			–			(33,821	)
Cancellation of shares Note 5	(73,500	)		(74	)	73,500			74			1,762			–			–			1,762
Stock-based compensation – Note 5	–			–		–			–			494,883			–			–			494,883
Employee share purchase program	22,226			22		–			–			61,970			–			–			61,992
Exercise of stock options	495			1		–			–			1,217			–			–			1,218
Net loss for the period	–			–		–			–			–			(1,772,042	)		–			(1,772,042	)
Foreign currency translation adjustment	–			–		–			–			–			–			1,404,362			1,404,362
Balance, January 31, 2018	5,935,206		$	5,935		–		$	–		$	75,071,382		$	(62,253,057	)	$	(2,620,834	)	$	10,203,426

See accompanying notes to the interim consolidated financial statements

8

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 1	Nature of Operations
	CounterPath Corporation (the “Company”) was incorporated in the State of Nevada on April 18, 2003. The shares of the Company’s common stock are listed for trading on the NASDAQ Capital Market in the United States of America and on the Toronto Stock Exchange in Canada.
	The Company focuses on the design, development, marketing and sales of software applications and related services, such as pre and post sales technical support and customization services, that enable enterprises and telecommunication service providers to deliver Unified Communications (UC) services, including voice, video, messaging and collaboration functionality, over their Internet Protocol, or IP, based networks. The Company’s products are sold either directly or through channel partners, to small, medium and large businesses (“enterprises”) and telecom service providers, in North America, and in Europe, Middle East, Africa (“collectively EMEA”), Asia Pacific and Latin America.
Note 2	Significant Accounting Policies
	These interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in U.S. dollars except where otherwise disclosed. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for the period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates.
	These interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business.

a)	Basis of Presentation
	These interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, CounterPath Technologies Inc. (“CounterPath Technologies”), a company existing under the laws of the province of British Columbia, Canada, and BridgePort Networks, Inc. (“BridgePort”), incorporated under the laws of the state of Delaware. All inter- company transactions and balances have been eliminated.
	The Company has experienced volatile revenues as a result of a number of factors including its buildout of a cloud based subscription platform concurrent with the change of its licensing model to subscription based licensing and has not reached profitable operations which raises substantial doubt about its ability to continue operating as a going concern within one year of the date of the financial statements.
	The Company has historically been able to manage liquidity requirements through cost management and cost reduction measures, supplemented with raising additional financing. To alleviate this situation, the Company has plans in place to improve its financial position and liquidity, while executing on its growth strategy, by managing and or reducing costs that are not expected to have an adverse impact on the ability to generate cash flows.
	In addition, the Company has historically been able to raise additional financing to assist with the Company’s transition.
	As of the date of these financial statements, with planned cost management and reduction measures, the Company has sufficient liquidity to meet the ongoing cash requirements of the Company for one year after the issuance date of the financial statements. Therefore, although substantial doubt has been raised, this has been alleviated by management’s plans.

9

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 2 Significant Accounting Policies - (cont’d)

b)	Interim Reporting
	The information presented in the accompanying interim consolidated financial statements is without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
	These statements reflect all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America. Except where noted, these interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2017 annual audited consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2017 annual audited consolidated financial statements.
	Operating results for the nine months ended January 31, 2018 are not necessarily indicative of the results that can be expected for the year ending April 30, 2018.
c)	New Accounting Pronouncements
	In May 2014, FASB issued ASU 2014-09, Revenue From Contracts With Customers (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this new standard.
	In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in the new revenue standard on assessing whether an entity is a principal or an agent in a revenue transaction. This conclusion impacts whether an entity reports revenue on a gross or net basis. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance in the new revenue standard regarding an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.

10

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 2 Significant Accounting Policies − (cont’d)

c)	New Accounting Pronouncements – (cont’d)
	In May 2016, the FASB issued ASU 2016-11, Revenue Recognition: Customer Payments and Incentives, which clarifies the guidance in recognizing costs for consideration given by a vendor to a customer as a component of cost of sales. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow- Scope Improvements and Practical Expedients which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. While we are currently evaluating the method of adoption and the impact of the new revenue standard, as amended, on our Consolidated Financial Statements and related disclosures, we believe the adoption of the new standard may have a significant impact on the accounting for certain transactions with multiple elements or “bundled” arrangements because the requirement to have VSOE for undelivered elements under current accounting standards is eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. We continue to evaluate the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.
	In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Measurement of Credit Losses on Financial Instruments which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for a company’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected will a valuation provision. The amendments will be effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of this amendment on our consolidated financial statements and related disclosures.
	In February 2016, FASB issued ASU 2016-02, Leases. The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right -of-use assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements.

11

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 2 Significant Accounting Policies − (cont’d)

d)	Derivative Instruments
	The Company accounts for derivative instruments, consisting of foreign currency forward contracts, pursuant to the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires the Company to measure derivative instruments at fair value and record them in the balance sheet as either an asset or liability and expands financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, results of operations and cash flows. The Company does not use derivative instruments for trading purposes. ASC 815 also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.
	The Company also routinely enters into foreign currency forward contracts, not designated as hedging instruments, to protect the Company from fluctuations in exchange rates. Gains or losses arising out of marked to market fair value valuation of forward contracts, not designated as hedges, are recognized in net income.
	The Company records foreign currency forward contracts on its Consolidated Balance Sheets as derivative instruments assets or liabilities depending on whether the net fair value of such contracts is a net asset or net liability, respectively (see Note 4 “Derivative Financial Instruments and Risk Management,” of the Notes to the Consolidated Financial Statements). The Company did not enter any foreign currency derivatives designated as cash flow hedges in the three and nine months ended January 31, 2018.
e)	Goodwill
	Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. ASC Topic 350 (“ASC 350”) requires goodwill to be tested for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company's business enterprise below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis.
	Management has determined that the Company currently has a single reporting unit which is CounterPath Corporation. If the recorded value of the assets, including goodwill, and liabilities (“net book value”) of the reporting unit exceeds its fair value, an impairment loss may be required.
	Goodwill of $6,339,717 (CDN$6,704,947) and $2,083,960 (CDN$2,083,752) was initially recorded as the Company was deemed to be the acquirer of NewHeights Software Corporation (“NewHeights”) on August 2, 2007 and FirstHand Technologies Inc. (“FirstHand”) on February 1, 2008, respectively. Translated to U.S. dollars using the period end rate, the goodwill balance at January 31, 2018 was $5,450,605 (CDN$6,704,947) (April 30, 2017 - $4,914,029) in respect of NewHeights and $1,693,655 (CDN$2,083,414) (April 30, 2017 - $1,526,926) in respect of FirstHand. Management will perform its annual impairment test in its fiscal fourth quarter. No impairment charges were recorded for the nine months ended January 31, 2018 and 2017.

12

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 2 Significant Accounting Policies - (cont’d)

f)	Accounts Receivable and Allowance for Doubtful Accounts
	Accounts receivable are presented net of an allowance for doubtful accounts.

		January 31,			April 30,
		2018			2017
Balance of allowance for doubtful accounts, beginning of period/year	$	80,232		$	547,173
Bad debt provision		171,693			346,689
Write-off of receivables		(1,930	)		(813,630	)
Balance of allowance for doubtful accounts, end of period/year	$	249,995		$	80,232

	The Company determines the allowance for doubtful accounts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment terms, previous loss history, and the customer’s current ability to pay its obligation. When the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a charge to the allowance to reduce the customer’s related accounts.
g)	Revenue Recognition
	The Company’s revenue is generated from the sale of software license, subscription fees related to the cloud offering, support and maintenance services and professional services. The Company recognizes revenue in accordance with ASC 985-605 “Software Revenue Recognition”.
	Software license revenue is recognized for sales of perpetual licenses.
	Subscription, support and maintenance revenue is generated from recurring fees purchased through the Company’s cloud based offerings, where the customer has no right to take possession of the underlying software at any time and is recognized ratably as the service is delivered.
	Professional and other services include software customization, implementation, training, and dedicated engineering which are recognized as the related service has been performed.
h)	Earnings Per Share
	The Company computes net loss per share in accordance with ASC Topics 260 and ASC 260-10. ASC Topics 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options and warrants using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the nine months ended January 31, 2018 and 2017, common share equivalents, consisting of common shares issuable, on exercise or settlement, as applicable, of options, warrants and deferred share units (“DSUs”) of 1,144,172 and 867,309, respectively, were not included in the computation of diluted EPS because the effect was anti-dilutive.

13

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 3	Related Party Transactions
	During the three and nine months ended January 31, 2018, the Company through its wholly owned subsidiary, CounterPath Technologies, paid $21,911 and $65,277 (2017 - $19,750 and $59,250) to KRP Properties (“KRP”) (previously known as Kanata Research Park Corporation) for leased office space. KRP is controlled by the Chairman of the Company.
	On November 21, 2013, the Company, through its wholly owned subsidiary, CounterPath Technologies, entered into an agreement with 8007004 (Canada) Inc. (“8007004”) to lease office space. 8007004 is controlled by a member of the board of directors of the Company. CounterPath Technologies, paid $8,258 and $24,820 (2017 - $7,671 and $23,013) for the three and nine months ended January 31, 2018, respectively.
	On January 24, 2018, the Company issued an aggregate of 427,500 shares of common stock under a non-brokered private placement (“Private Placement”) at a price of $4.01 per share for total gross proceeds of $1,714,275 less issuance costs of $14,956. In connection with the Private Placement, KRP, a company controlled by the Chairman of the Company, purchased 125,000 shares and KMB Trac Two Holdings Ltd., a company owned by the spouse of a director of our Company, purchased 125,000 shares.
	On July 20, 2017, our Company issued an aggregate of 539,240 shares of common stock under a non- brokered private placement at a price of $2.20 per share for total gross proceeds of $1,186,328 less issuance costs of $19,832. In connection with this private placement, Wesley Clover International Corporation, a Company controlled by the Chairman of our Company, purchased 144,357 shares, KMB Trac Two Holdings Ltd., a company owned by the spouse of a director of our Company, purchased 180,446 shares, the chief executive officer and a director of our company, purchased 11,368 shares, the chief financial officer of our company, purchased 4,511 shares, and the executive vice president, sales and marketing of our Company, purchased 4,545 shares.
	On December 15, 2016, the Company issued an aggregate of 454,097 shares of common stock under a non-brokered private placement (“Private Placement”) at a price of $2.05 per share for total gross proceeds of $930,899 less issuance costs of $32,207. In connection with the Private Placement, KRP, a company controlled by the Chairman of the Company, purchased 198,000 shares and a director and chief executive officer of the Company purchased 12,195 shares.
	The above transactions are in the normal course of operations and are recorded at amounts established and agreed to between the related parties.
Note 4	Derivative Financial Instruments and Risk Management
	In the normal course of business, the Company is exposed to fluctuations in the exchange rates associated with foreign currencies. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk.
	Foreign Currency Exchange Rate Risk
	A majority of the Company’s revenue activities are transacted in U.S. dollars. However, the Company is exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies, of which the most significant to the Company’s operations for the three and nine months ended January 31, 2018 is the Canadian dollar as a majority of the Company’s expenses are in Canadian dollars. The Company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. During the three and nine months ended January 31, 2018 and 2017, the Company did not enter into any cash flow hedges.

14

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 4	Derivative Financial Instruments and Risk Management – (cont’d)
	Foreign Currency Exchange Rate Risk − (cont’d)
	The Company also periodically enters into foreign currency forward contracts, not designated as hedging instruments, to protect it from fluctuations in exchange rates. During the three and nine months ended January 31, 2018, the Company had not entered into any foreign currency forward contracts.
	Fair Value Measurement
	When available, the Company uses quoted market prices to determine fair value, and classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market–based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market–based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3.
	Fair value measurements are classified according to the lowest level input or value–driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.
	Fair value measurement includes the consideration of non–performance risk. Non–performance risk refers to the risk that an obligation (either by a counterparty or the Company) will not be fulfilled. For financial assets traded in an active market (Level 1), the non–performance risk is included in the market price. For certain other financial assets and liabilities (Level 2 and 3), the Company’s fair value calculations have been adjusted accordingly.
	The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of January 31, 2018 and April 30, 2017.

		Carrying			Fair Value
As at January 31, 2018		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	3,048,418	$	3,048,418	1	N/A

		Carrying			Fair Value
As at April 30, 2017		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	2,071,019	$	2,071,019	1	N/A

Note 5	Common Stock
	Private Placement
	On January 24, 2018, the Company issued an aggregate of 427,500 shares of common stock under a non-brokered private placement at a price of $4.01 per share for total gross proceeds of $1,714,275 less issuance costs of $48,325.
	On October 16, 2017, the Company entered into an agreement to issue 14,000 shares of the Company’s common stock in exchange for investor relation services.

15

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 5	Common Stock – (cont’d)
	Private Placement − (cont’d)
	On July 20, 2017, the Company issued an aggregate of 539,240 shares of common stock under a non- brokered private placement at a price of $2.20 per share for total gross proceeds of $1,186,328 less issuance costs of $19,832.
	On December 15, 2016, the Company issued an aggregate of 454,097 shares of common stock under a non-brokered private placement at a price of $2.05 per share for total gross proceeds of $930,899 less issuance costs of $32,206.
	On April 4, 2016, the Company entered into an agreement to issue 25,000 shares of the Company’s common stock in exchange for advisory services which was subsequently amended to 23,500 shares. The shares were issued in three tranches: (i) the first tranche of 10,000 shares was issued on April 22, 2016; (ii) the second tranche of 10,000 shares was issued on May 25, 2016; and (iii) the third tranche of 3,500 shares was issued on June 30, 2016.
	Stock Options
	The Company has a stock option plan (the “2010 Stock Option Plan”) under which options to purchase shares of the Company’s common stock may be granted to employees, directors and consultants. Stock options entitle the holder to purchase shares of the Company’s common stock at an exercise price determined by the board of directors (the “Board”) of the Company at the time of the grant. The options generally vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, at which time the options are fully vested.
	The maximum number of shares of common stock authorized by the stockholders and reserved for issuance by the Board under 2010 Stock Option Plan is 986,000.
	The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. The Company applied an estimated forfeiture rate of 15% for the three and nine months ended January 31, 2018 and 2017 in determining the expense recorded in the accompanying consolidated statement of operations.
	For the majority of the stock options granted, the number of shares issued on the date the stock options are exercised is net of the minimum statutory withholding requirements that the Company pays in cash to the appropriate taxing authorities on behalf of its employees. Although these withheld shares are not issued or considered common stock repurchases under our authorized plan they are treated as common stock repurchases in our consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting.

16

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 5	Common Stock – (cont’d)
	Stock Options − (cont’d)
	The weighted-average fair value of options granted during the three and nine months ended January 31, 2018 was $1.90 and $1.90, respectively (2017 - $2.03 and $2.36). The weighted-average assumptions utilized to determine such values are presented in the following table:

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Risk-free interest rate	2.14%	2.10%	2.14%	1.20%
Expected volatility	95.55%	95.17%	95.55%	95.19%
Expected term	3.7 years	3.7 years	3.7 years	3.7 years
Dividend yield	0%	0%	0%	0%

The following is a summary of the status of the Company’s stock options as of January 31, 2018 and the stock option activity during the nine months ended January 31, 2018:

	Weighted Average
	Number of		Exercise Price
	Options		per Share
Outstanding at April 30, 2017	396,922		$2.46
Granted	324,000		$2.89
Forfeited/Cancelled	(11,645	)	$2.49
Expired	(30,000	)	$2.50
Exercised	(495	)	$2.46
Outstanding at January 31, 2018	678,782		$2.66
Exercisable at January 31, 2018	242,536		$2.48
Exercisable at April 30, 2017	221,739		$2.49

The following table summarizes stock options outstanding as of January 31, 2018:

	Number of		Aggregate		Number of		Aggregate
	Options		Intrinsic		Options		Intrinsic
Exercise Price	Outstanding		Value	Expiry Date	Exercisable		Value
$2.03	10,000	$	25,300	December 15, 2021	2,708	$	6,851
$2.40	60,000		129,600	July 15, 2021	22,500		48,600
$2.41	49,500		106,425	December 14, 2020	25,765		55,395
$2.46	25,000		52,500	March 14, 2022	5,208		10,937
$2.50	210,282		433,181	July 25, 2018 to July 17, 2020	186,355		383,891
$2.89	324,000		541,080	December 14, 2022	–		–
January 31, 2018	678,782	$	1,288,086		242,536	$	505,674
April 30, 2017	396,922	$	–		221,739	$	–

17

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 5	Common Stock – (cont’d)
	Stock Options − (cont’d)
	The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of $4.56 per share as of January 31, 2018 (April 30, 2017 – $1.93), which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of January 31, 2018 was 242,536 (April 30, 2017 – nil). The total intrinsic value of options exercised during the nine months ended January 31, 2018 was $1,742 (January 31, 2017 – $nil). The grant date fair value of options vested during the three and nine months ended January 31, 2018 was $60,066 and $233,748, respectively (January 31, 2017 - $108,194 and $324,422).
	The following table summarizes non-vested stock purchase options outstanding as of January 31, 2018:

				Weighted
	Number of			Average Grant
	Options			Date Fair Value
Non-vested options at April 30, 2017	175,183		$	3.49
Granted	324,000		$	1.90
Vested	(59,103	)	$	3.95
Forfeited/Cancelled	(3,834	)	$	2.12
Non-vested options at January 31, 2018	436,246		$	1.94

As of January 31, 2018, there was $626,925 of total unrecognized compensation cost related to unvested share-based compensation awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 3.5 years.

Employee and non-employee stock-based compensation amounts classified in the Company’s consolidated statements of operations for the three and nine months ended January 31, 2018 and 2017 are as follows:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Cost of sales	$	11,583	$	23,388	$	39,439	$	77,441
Sales and marketing		17,141		27,906		58,814		147,324
Research and development		11,006		24,563		42,933		82,081
General and administrative		25,630		41,961		97,978		130,747
Total stock-option based compensation		65,360	$	117,818	$	239,164	$	437,593

Warrants

The following table summarizes warrants outstanding and exercisable as of January 31, 2018:

	Number of			Weighted Average
	Warrants			Exercise Price	Expiry Dates
Warrants at April 30, 2017	146,500		$	7.50	September 4, 2017
Granted	–			–	–
Exercised	–			–	–
Expired	(146,500	)	$	7.50	September 4, 2017
Warrants at January 31, 2018	–			–

18

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 5	Common Stock – (cont’d)
	Employee Stock Purchase Plan
	Under the terms of the Employee Stock Purchase Plan (the “ESPP”) all regular salaried (non- probationary) employees can purchase up to 6% of their base salary in shares of the Company’s common stock at market price. The Company will match 50% of the shares purchased by issuing or purchasing in the market up to 3% of the respective employee’s base salary in shares. During the nine months ended January 31, 2018, the Company matched $36,210 (2017 - $26,461) in shares purchased by employees under the ESPP. During the nine months ended January 31, 2018, 12,832 shares (2017 – 35,103 shares) were purchased on the open market and 22,226 shares (2017 – no shares) were issued from treasury under the ESPP.
	A total of 120,000 shares have been reserved for issuance under the ESPP. As of January 31, 2018, a total of 63,977 shares were available for issuance under the ESPP.
	Normal Course Issuer Bid Plan
	Pursuant to a normal course issuer bid (“NCIB”) commencing on March 29, 2017 and expiring March 28, 2018, the Company is authorized to purchase 258,613 shares of the Company’s common stock through the facilities of the Toronto Stock Exchange (the “TSX”) and other Canadian marketplaces or U.S. marketplaces. During the period March 29, 2017 to January 31, 2018, the Company repurchased 73,500 common shares at an average price of $2.18 (CDN$2.81) for a total of $160,230. As of January 31, 2018, a total of 73,500 shares have been cancelled.
	Deferred Share Unit Plan
	Under the terms of the Deferred Share Unit Plan (the “DSUP”), each DSU is equivalent to one share of the Company’s common stock. The maximum number of common shares that may be reserved for issuance to any one participant pursuant to DSUs granted under the DSUP and any share compensation arrangement is 5% of the number of shares outstanding at the time of reservation. A DSU granted to a participant who is a director of the Company shall vest immediately on the award date. A DSU granted to a participant other than a director will generally vest as to one-third (1/3) of the number of DSUs granted on the first, second and third anniversaries of the award date. Fair value of the DSUs, which is based on the closing price of the shares of the Company’s common stock on the date of grant, is recorded as compensation expense over the vesting period.
	On September 12, 2017, the maximum number of shares of common stock authorized by the Company’s stockholders reserved for issuance under the DSUP was increased from 500,000 shares to 700,000 shares. During the nine months ended January 31, 2018, 119,998 (2017 90,453) DSUs were issued under the DSUP, of which 40,129 were granted to officers or employees and 79,869 were granted to non-employee directors. As of January 31, 2018, a total of 210,597 shares were available for issuance under the DSUP.

19

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 5	Common Stock – (cont’d)
	Deferred Share Unit Plan - (cont’d)
	The following table summarizes the Company’s outstanding DSU awards as of January 31, 2018, and changes during the period then ended:

			Weighted
			Average Grant
			Date Fair
	Number of DSUs		Value Per DSU
DSUs outstanding at April 30, 2017	345,392	$	7.85
Granted	119,998	$	2.20
DSUs outstanding at January 31, 2018	465,390	$	6.40

The following table summarizes information regarding the non-vested DSUs outstanding as of January 31, 2018:

				Weighted
				Average Grant
				Date Fair
	Number of DSUs			Value Per DSU
Non-vested DSUs at April 30, 2017	46,217		$	4.58
Granted	119,998		$	2.21
Vested	(101,963	)	$	3.02
Non-vested DSUs at January 31, 2018	64,252		$	2.21

As of January 31, 2018, there was $92,142 (2017 – $142,688) of total unrecognized compensation cost related to unvested DSU awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 2.03 years (2017 – 1.54 years).

Employee and non-employee DSU based compensation amounts classified in the Company’s consolidated statements of operations for the three and nine months ended January 31, 2018 and 2017 are as follows:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Sales and marketing	$	–	$	–	$	–	$	–
Research and development		–		–		–		–
General and administrative		22,564		32,507		255,719		263,922
Total DSU based compensation	$	22,564	$	32,507	$	255,719	$	263,922

20

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 6	Segmented Information
	The Company’s chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has concluded that it has one reportable operating segment.
	Revenues are based on the country in which the customer is located. The following is a summary of total revenues by geographic area for the three and nine months ended January 31, 2018 and 2017:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
North America	$	1,648,430	$	1,469,552	$	5,158,026	$	4,904,939
EMEA		1,127,537		704,788		3,304,887		2,394,724
Asia Pacific		216,479		172,140		744,693		642,262
Latin America		91,457		208,879		399,668		390,541
	$	3,083,903	$	2,555,359	$	9,607,274	$	8,332,466

All of the Company’s long-lived assets, which include equipment, intangible assets, goodwill and other assets, are located in Canada and the United States as follows:

		As at
		January 31, 2018		April 30, 2017
Canada	$	7,429,394	$	6,731,644
United States		50,825		34,761
	$	7,480,219	$	6,766,405

Revenue from significant customers for the three and nine months ended January 31, 2018 and 2017 is summarized as follows:

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Customer A	17%	10%	6%	8%

Accounts receivable balance for Customer A was $620,000 as at January 31, 2018 (April 30, 2017 - $280,617).

21

COUNTERPATH CORPORATION
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2018
(Unaudited)

Note 7	Commitments
	Total payable over the term of the agreements for the years ended April 30 are as follows:

		Office Leases –		Office Leases –		Total Office
		Related Party		Unrelated Party		Leases
2018		29,256		144,676		173,932
2019		117,022		579,893		696,915
2020		5,506		284,746		290,252
2021		−		6,092		6,092
	$	151,784	$	1,015,407	$	1,167,191

Note 8	Contingencies
	The Company is party to legal claims from time to time which arise in the normal course of business. These claims are not expected to have a material adverse effect on the financial position, results of operations or cash flows of the Company.
Note 9	Earnings (loss) per common share (“EPS”)
	Computation of basic and diluted EPS:

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2018			2017			2018			2017
Net loss	$	(778,343	)	$	(682,140	)	$	(1,772,042	)	$	(1,610,071	)
Weighted average common shares outstanding – basic and diluted		5,539,352			4,789,675			5,354,690			4,631,472
Basic and diluted EPS	$	(0.14	)	$	(0.14	)	$	(0.33	)	$	(0.35	)

For the nine months ended January 31, 2018 and 2017, common share equivalents, consisting of common shares issuable, on exercise or settlement, as applicable, of options, warrants and deferred share units (“DSUs”) of 1,144,172 and 867,309, respectively, were not included in the computation of diluted EPS because the effect was anti-dilutive.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

            This quarterly report, including the documents incorporated herein and therein by reference, contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Forward-looking statements in this quarterly report may include statements about:

• any potential loss of or reductions in orders from certain significant customers;

• our dependence on our customers to sell our applications or services using our applications;

• our ability to protect our intellectual property;

• competitive factors, including, but not limited to, industry consolidation, entry of new competitors into our market, and new product and marketing initiatives by our competitors;

• our ability to predict our revenue, operating results and gross margin accurately;

• the length and unpredictability of our sales cycles;

• our ability to expand or enhance our product offerings including in response to industry demands or market trends;

• our ability to sell our products in certain markets;

• our ability to manage growth;

• the attraction and retention of qualified employees and key personnel;

• the interoperability of our products with service provider networks; and

• the quality of our products and services, including any undetected errors or bugs in our software.

            These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

            Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

References

            In this quarterly report, (i) unless the context otherwise requires, references to “we”, “our”, “us”, the “Company” or “Counterpath” mean Counterpath Corporation and its subsidiaries and (ii) all amounts are expressed in United States dollars, unless otherwise indicated.

Background

            Counterpath Corporation was incorporated under the laws of the State of Nevada on April 18, 2003.

23

            On August 2, 2007, we acquired all of the shares of NewHeights Software Corporation through the issuance of 768,017 shares of our common stock and 36,984 preferred shares issued from a subsidiary of our company, which preferred shares were exchangeable into 36,984 shares of our common stock.

            On February 1, 2008, we acquired all of the shares of FirstHand Technologies Inc. through the issuance of 590,000 shares of our common stock. On February 1, 2008, we acquired all of the issued and outstanding shares of BridgePort Networks, Inc. (“BridgePort Networks”) by way of merger in consideration for the assumption of all of the assets and liabilities of BridgePort Networks.

Business of CounterPath

            We design, develop and sell software and services that enable enterprises and telecommunication service providers to deliver Unified Communications (UC) services, including voice, video, messaging and collaboration functionality, over their Internet Protocol, or IP, based networks. We are capitalizing upon numerous industry trends, including the rapid adoption of mobile technology, the proliferation of bring-your-own-device to work programs, the need for secure business communications, the need for centralized provisioning, the migration towards cloud-based services and the migration towards all IP networks. We are also capitalizing on a trend where communication services such as Skype and WhatsApp are becoming more available over-the-top (OTT) of the incumbent operators’ networks or enterprise networks (a.k.a. Internet OTT providers). We offer our solutions under perpetual license agreements that generate one-time license revenue and under subscription license agreements that generate recurring license revenue. We sell our solutions through our own online store, through third-party online stores, directly using our in-house sales team and through channel partners. Our channel partners include original equipment manufacturers, value added distributers and value added resellers. Enterprises typically leverage our solutions to increase employee productivity and to reduce certain costs. Telecommunication service providers typically deploy our solutions as part of a broad strategy to defend their subscriber base from competitive threats by offering innovative new services. Our original equipment manufacturers and value added resellers typically integrate our solutions into their products and then sell a bundled solution to their end customers, which include both telecommunication service providers and enterprises.

Revenue

Our total revenue consists of the following:

• Software
  
  We generate software revenue primarily on a single fee per perpetual software license basis. We recognize software revenue at the time of delivery, provided all revenue recognition criteria have been met. If the revenue recognition criteria have not been met, the revenue is deferred or not recognized. The number of software licenses purchased has a direct impact on the average selling price. Our software revenue may vary significantly from quarter to quarter as a result of long sales and deployment cycles, new product introductions and variations in customer ordering practices.

• Subscription, support and maintenance
  
  We generate recurring subscription revenue from subscriptions related to our software as a service offering. Recurring support and maintenance revenue is generated from annual software support and maintenance contracts for our perpetual software licenses. Both subscription revenue and support and maintenance revenue are typically billed annually in advance based on the terms of the arrangement.
  
  Support and maintenance services include e-mail and telephone support, unspecified rights to bug fixes and product updates and upgrades and enhancements available on a when-and-if available basis, and are recognized rateably over the term of the service period, which is generally twelve months.

24

• Professional services and other
  
  We generate professional services and other revenue through services including product configuration and customization, implementation, dedicated engineering and training. The amount of product configuration and customization required by a customer typically increases as the order size increases from a given customer. Services and pricing vary depending upon a customer's requirements for customization, implementation and training.

Operating Expenses

            Operating expenses consist of cost of sales, sales and marketing, research and development, and general and administrative expenses. Personnel-related costs are the most significant component of each of these expense categories.

            Cost of sales consists primarily of: (a) salaries and benefits related to personnel, (b) related overhead, (c) billable and non-billable travel, lodging, and other out-of-pocket expenses, (d) payments to third party vendors for audio and video compression/decompression software known as codecs, (e) amortization of capitalized software that is implemented into our products and (f) warranty expense.

            Sales and marketing expense consists primarily of: (a) salaries and related personnel costs including stock-based compensation, (b) commissions, (c) travel, lodging and other out-of-pocket expenses, (d) marketing programs such as trade shows and (e) other related overhead. Commissions are recorded as an expense when earned by the employee. We expect increases in sales and marketing expense for the foreseeable future as we further increase the number of sales professionals and increase our marketing activities with the intent to grow our revenue. We expect sales and marketing expense to decrease as a percentage of total revenue, however, as we leverage our current sales and marketing personnel as well as our distribution partnerships.

            Research and development expense consists primarily of: (a) salaries and related personnel costs including stock-based compensation, (b) payments to contractors for design and consulting services, (c) costs relating to the design and development of new products and enhancement of existing products, (d) quality assurance and testing and (e) other related overhead. To date, all of our research and development costs have been expensed as incurred.

            General and administrative expense consists primarily of: (a) salaries and personnel costs including stock-based compensation related to our executive, finance, human resource and information technology functions, (b) accounting, legal, tax advisory and regulatory fees and (c) other related overhead.

Application of Critical Accounting Policies and Use of Estimates

            Our interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ significantly from these estimates under different assumptions or conditions. There have been no material changes to these estimates for the periods presented in this quarterly report.

            We believe that of our significant accounting policies, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, the following policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Basis of Presentation

            The interim consolidated financial statements include the accounts of our company and our wholly-owned subsidiaries, CounterPath Technologies Inc., a company existing under the laws of the province of British Columbia, Canada, and BridgePort Networks, a company incorporated under the laws of the state of Delaware. All inter-company transactions and balances have been eliminated.

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Interim Reporting

            The information presented in the accompanying interim consolidated financial statements is without audit pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the interim consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading.

            These statements reflect all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States. Except where noted, the interim consolidated financial statements follow the same accounting policies and methods of their application as our April 30, 2017 annual audited consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim consolidated financial statements be read in conjunction with our April 30, 2017 annual audited consolidated financial statements.

            Operating results for the three and nine months ended January 31, 2018 are not necessarily indicative of the results that can be expected for the year ending April 30, 2018.

Revenue Recognition

            We recognize revenue in accordance with “Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 985-605 "Software Revenue Recognition"”.

            In all of our arrangements, we do not recognize any revenue until we can determine that persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and we deem collection to be probable. For distribution and reseller arrangements, fees are fixed or determinable and collection probable when there are no rights to exchange or return and fees are not dependent upon payment from the end-user. If any of these criteria are not met, revenue is deferred until such time that all criteria have been met.

            A substantial percentage of our revenue is generated by multiple-element arrangements, such as products, support and maintenance, and professional services. When arrangements include multiple elements, we allocate the total fee among the various elements using the residual method. Under the residual method, revenue is recognized when vendor-specific objective evidence, or VSOE, of fair value exists for all of the undelivered elements of the arrangement, but does not exist for one or more of the delivered elements of the arrangement. Each arrangement requires us to analyze the individual elements in the transaction and to estimate the fair value of each undelivered element, which typically includes maintenance and services. Revenue is allocated to each of the undelivered elements based on its respective fair value, with the fair value determined by the price charged when that element is sold separately. Revenue from multiple-element arrangements is recognized in software, subscription, support and maintenance, and professional services based on the items or services delivered.

            For contracts with elements related to customized network solutions and certain network build-outs, we apply FASB Emerging Issues Task Force ASC 605-25, "Multiple-Element Arrangements" and revenues are recognized under ASC 605-35, "Construction-Type and Production-Type Contracts", generally using the percentage-of-completion method.

            In using the percentage-of-completion method, revenues are generally recorded based on the completion of milestones as described in the agreement. Profit estimates on long-term contracts are revised periodically based on changes in circumstances and any losses on contracts are recognized in the period that such losses become known.

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            Post contract customer support (PCS) services include e-mail and telephone support, unspecified rights to bug fixes and product updates and upgrades and enhancements available on a when-and-if available basis, and are recognized rateably over the term of the service period, which is generally twelve months. PCS service revenue generally is deferred until the related product has been delivered and all other revenue recognition criteria have been met. PCS revenues are recognized under support and maintenance revenues.

            Professional services and training revenue is recognized as the related service is performed.

Stock-Based Compensation

            Stock options granted are accounted for under ASC 718, “Compensation – Stock Compensation”, and are recognized at the fair value of the options as determined by an option pricing model as the related services are provided and the options earned. ASC 718 requires public companies to recognize the cost of employee services received in exchange for equity instruments, based on the fair value of those instruments on the measurement date which generally is the grant date, with limited exceptions.

            Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee consultants. We measure stock-based compensation cost at measurement date, based on the estimated fair value of the award, and generally recognize the cost as expense on a straight-line basis (net of estimated forfeitures) over the employee requisite service period or the period during which the related services are provided by the non-employee consultants and the options are earned. We estimate the fair value of stock options using a Black-Scholes option valuation model.

            The expected volatility of options granted has been determined using the volatility of our company's stock. The expected life of options granted after April 30, 2006 has been determined based on analysis of historical data. We have not paid and do not anticipate paying cash dividends on our shares of common stock; therefore, the expected dividend yield is assumed to be zero. In addition, ASC 718 requires companies to utilize an estimated forfeiture rate when calculating the expense for the period. We applied an estimated forfeiture rate of 15.0% for the nine months ended January 31, 2018 in determining the expense recorded in our consolidated statement of operations. Cost of sales and operating expenses include stock-based compensation expense, and deferred share unit plan expense. For the nine months ended January 31, 2018, we recorded an expense of $494,883 in connection with share-based payment awards. A future expense of non-vested options of $626,925 is expected to be recognized over a weighted-average period of 3.5 years. A future expense of non-vested deferred share units of $92,142 is expected to be recognized over a weighted-average period of 2.03 years.

Research and Development Expense for Software Products

            Research and development expense includes costs incurred to develop intellectual property. The costs for the development of new software and substantial enhancements to existing software are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized. We have determined that technological feasibility is established at the time a working model of software is completed. Because we believe our current process for developing software will be essentially completed concurrently with the establishment of technological feasibility, no costs have been capitalized to date.

Accounts Receivable and Allowance for Doubtful Accounts

            We extend credit to our customers based on evaluation of an individual customer's financial condition and collateral is generally not required. Accounts outstanding beyond the contractual payment terms are considered past due. We determine our allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are beyond the contractual payment terms, our previous loss history, and a customer's current ability to satisfy its obligation to us. We write-off accounts receivable when they are identified as uncollectible. All outstanding accounts receivable are periodically reviewed for collectability on an individual basis.

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Goodwill

            We have goodwill related to our acquisitions of NewHeights Software Corporation and FirstHand Technologies Inc. in August 2007 and February 2008, respectively. The determination of the net carrying value of goodwill and the extent to which, if any, there is impairment, are dependent on material estimates and judgments on our part, including the estimate of the value of future net cash flows, which are based upon further estimates of future revenues, expenses and operating margins.

Goodwill—Impairment Assessments

            We review goodwill for impairment annually and whenever events or changes in circumstances indicate its carrying value may not be recoverable in accordance with ASC 350, Goodwill and Other Intangible Assets. The provisions of ASC 350 require that a two-step impairment test be performed on goodwill. In the first step, we compare the fair value of our reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of our reporting unit’s goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference.

            Determining the fair value of our reporting unit involves the use of significant estimates and assumptions. These estimates and assumptions include future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. Our most recent annual goodwill impairment analysis, which was performed at the end of the fourth quarter of fiscal 2017, did not result in an impairment charge, nor did we record any goodwill impairment for the three and nine months ended January 31, 2018.

Derivative Instruments

            We periodically enter into foreign currency forward contracts, not designated as hedging instruments, to protect us from fluctuations in exchange rates. As at January 31, 2018, our company had no foreign currency forward contracts outstanding. Notional amounts do not quantify risk or represent assets or liabilities of our company, but are used in the calculation of cash settlements under the contracts.

Use of Estimates

            The preparation of our financial statements in conformity with generally accepted accounting principles in the United States requires our management to make estimates and assumptions which affect the amounts reported in our interim consolidated financial statements, the notes thereto, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Results of Operations

            Our operating activities during the nine months ended January 31, 2018 consisted primarily of selling our IP telephony software and related services to telecom service providers, enterprises and channel partners serving the telecom and enterprise segments, and the continued development of our IP telephony software products.

            We generate our revenue primarily in U.S. dollars and incur a majority of our expenses in Canadian dollars. As a result of the fluctuation in the Canadian dollar against the U.S. dollar over the three and nine months ended January 31, 2018, we recorded increased operating costs on translation of Canadian dollar costs as compared to the three and nine months ended January 31, 2017 of approximately $109,000 and $166,000, respectively.

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Selected Consolidated Financial Information

            The following tables set out selected consolidated unaudited financial information for the periods indicated. The selected consolidated financial information set out below for the three and nine months ended January 31, 2018 and 2017 has been derived from the consolidated unaudited financial statements and accompanying notes for the nine months ended January 31, 2018 and 2017 and the audited consolidated financial statements for the fiscal year ended April 30, 2017. Each investor should read the following information in conjunction with those statements and the related notes thereto.

Selected Consolidated Statements of Operations Data

		Three Months Ended January 31,
		2018					2017
				Percent of					Percent
				Total					of Total
		Amount		Revenue			Amount		Revenue
Revenue	$	3,083,903		100%		$	2,555,359		100%
Operating expenses	$	3,519,795		114%		$	3,074,706		120%
Loss from operations		($435,892	)	(14%	)		($519,347	)	(20%	)
Interest and other income, net		($123	)	−%		$	36		−%
Foreign exchange gain (loss)		($342,328	)	(11%	)		($162,829	)	(6%	)
Net loss		($778,343	)	(25%	)		($682,140	)	(27%	)
Net loss per share
-Basic and diluted		($0.14	)				($0.14	)
Weighted average common shares outstanding
-Basic and diluted		5,539,352					4,789,675

Selected Consolidated Statements of Operations Data

		Nine Months Ended January 31,
		2018					2017
				Percent of					Percent
				Total					of Total
		Amount		Revenue			Amount		Revenue
Revenue	$	9,607,274		100%		$	8,332,466		100%
Operating expenses	$	10,622,466		111%		$	10,161,033		122%
Loss from operations		($1,015,192	)	(11%	)		($1,828,567	)	(22%	)
Interest and other income, net		($338	)	−%		$	222		−%
Foreign exchange gain (loss)		($756,512	)	(8%	)	$	218,274		3%
Net loss		($1,772,042	)	(18%	)		($1,610,071	)	(19%	)
Net loss per share
-Basic and diluted		($0.33	)				($0.35	)
Weighted average common shares outstanding
-Basic and diluted		5,354,690					4,631,472

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Revenue

		Three Months Ended January 31,
		2018			2017			Period-to-Period Change
			Percent			Percent				Percent
			of Total			of Total				Increase /
		Amount	Revenue		Amount	Revenue		Amount		(Decrease)
Revenue by Type
Software	$	1,791,165	58%	$	1,324,203	52%	$	466,962		35%
Subscription, support and maintenance	$	1,120,690	36%	$	1,031,162	40%	$	89,528		9%
Professional services and other	$	172,048	6%	$	199,994	8%		($27,946	)	(14%	)
Total revenue	$	3,083,903	100%	$	2,555,359	100%	$	528,544		21%
Revenue by Region
North America	$	1,648,430	53%	$	1,469,552	58%	$	178,878		12%
International	$	1,435,473	47%	$	1,085,807	42%	$	349,666		32%
Total revenue	$	3,083,903	100%	$	2,555,359	100%	$	528,544		21%

            For the three months ended January 31, 2018, we generated $3,083,903 in revenue compared to $2,555,359 for the three months ended January 31, 2017, representing an increase of $528,544 or 21%.

            Software revenue increased by $466,962 or 35% to $1,791,165 for the three months ended January 31, 2018 compared to $1,324,203 for the three months ended January 31, 2017. The increase in software revenue was a result of increases in sales to service providers.

            Subscription, support and maintenance revenue increased by $89,528 or 9% to $1,120,690 for the three months ended January 31, 2018 compared to $1,031,162 for the three months ended January 31, 2017. The increase in subscription, support and maintenance revenue was a result of increases in sales to channel partners and enterprises partially offset by decreases in sales to service providers.

            Professional services and other revenue decreased by $27,946 or 14% to $172,048 for the three months ended January 31, 2018 compared to $199,994 for the three months ended January 31, 2017. The decrease in professional services and other revenue was a result of decreases in sales to channel partners and enterprises partially offset by increases in sales to service providers.

            North American revenue increased by $178,878 or 12% to $1,648,430 for the three months ended January 31, 2018 compared to $1,469,552 for the three months ended January 31, 2017, as a result of higher sales of software and service to channel partners and service providers. International revenue outside of North America increased by $349,666 or 32% to $1,435,473 for the three months ended January 31, 2018 compared to $1,085,807 for the three months ended January 31, 2017, as a result of higher sales of software to European service providers and enterprises.

		Nine Months Ended January 31,
		2018			2017			Period-to-Period Change
			Percent			Percent			Percent
			of Total			of Total			Increase /
		Amount	Revenue		Amount	Revenue		Amount	(Decrease)
Revenue by Type
Software	$	5,306,925	55%	$	4,223,066	51%	$	1,083,859	26%
Subscription, support and maintenance	$	3,069,371	32%	$	2,944,349	35%	$	125,022	4%
Professional services and other	$	1,230,978	13%	$	1,165,051	14%	$	65,927	6%
Total revenue	$	9,607,274	100%	$	8,332,466	100%	$	1,274,808	15%

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		Nine Months Ended January 31,
		2018			2017			Period-to-Period Change
			Percent			Percent			Percent
			of Total			of Total			Increase /
		Amount	Revenue		Amount	Revenue		Amount	(Decrease)
Revenue by Region
North America	$	5,158,026	54%	$	4,904,939	59%	$	253,087	5%
International	$	4,449,248	46%	$	3,427,527	41%	$	1,021,721	30%
Total revenue	$	9,607,274	100%	$	8,332,466	100%	$	1,274,808	15%

            For the nine months ended January 31, 2018, we generated $9,607,274 in revenue compared to $8,332,466 for the nine months ended January 31, 2017, representing an increase of $1,274,808 or 15%.

            Software revenue increased by $1,083,859 or 26% to $5,306,925 for the nine months ended January 31, 2018 compared to $4,223,066 for the nine months ended January 31, 2017. The increase in software revenue was a result of increases in sales to service providers, channel partners, and enterprises.

            Subscription, support and maintenance revenue increased by $125,022 or 4% to $3,069,371 for the nine months ended January 31, 2018 compared to $2,944,349 for the nine months ended January 31, 2017. The increase in subscription, support and maintenance revenue was a result of increases in sales to channel partners and enterprises partially offset by decreases in sales to service providers.

            Professional services and other revenue increased by $65,927 or 6% to $1,230,978 for the nine months ended January 31, 2018 compared to $1,165,051 for the nine months ended January 31, 2017. The increase in professional services and other revenue was a result of increases in sales to service providers partially offset by decreases in sales to enterprises.

            North American revenue increased by $253,087 or 5% to $5,158,026 for the nine months ended January 31, 2018 compared to $4,904,939 for the nine months ended January 31, 2017, as a result of higher sales of software to enterprises, channel partners, and service providers. International revenue outside of North America increased by $1,021,721 or 30% to $4,449,248 for the nine months ended January 31, 2018 compared to $3,427,527 for the nine months ended January 31, 2017, as a result of higher sales of software and services to European service providers and channel partners.

Operating Expenses

Cost of Sales

            Cost of sales for the three and nine months ended January 31, 2018 and 2017 were as follows:

		January 31, 2018			January 31, 2017			Period-to-Period Change
			Percent			Percent				Percent
			of			of				Increase /
		Amount	Revenue		Amount	Revenue		Amount		(Decrease)
Three months ended	$	362,057	12%	$	360,722	14%	$	1,335		−%
Nine months ended	$	1,131,122	12%	$	1,334,385	16%		($203,263	)	(15%	)

            Cost of sales was $362,057 for the three months ended January 31, 2018 which was slightly higher compared to $360,722 for the three months ended January 31, 2017.

            Cost of sales was $1,131,122 for the nine months ended January 31, 2018 compared to $1,334,385 for the nine months ended January 31, 2017. The decrease of $203,263 or 15% was primarily attributable to a decrease in wages, benefits and consulting fees of approximately $191,500 and a decrease in other expenses of approximately $11,800.

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Sales and Marketing

            Sales and marketing expenses for the three and nine months ended January 31, 2018 and 2017 were as follows:

		January 31, 2018			January 31, 2017			Period-to-Period Change
			Percent			Percent			Percent
			of			of			Increase /
		Amount	Revenue		Amount	Revenue		Amount	(Decrease)
Three months ended	$	996,470	33%	$	819,958	32%	$	176,512	22%
Nine months ended	$	3,031,981	32%	$	2,770,367	33%	$	261,614	9%

            Sales and marketing expenses were $996,470 for the three months ended January 31, 2018 compared to $819,958 for the three months ended January 31, 2017. The increase of $176,512 or 22% was primarily attributable to an increase in wages, benefits and consulting fees of approximately $120,300, an increase in travel and trade show expenses of approximately $21,500, an increase in other expenses of approximately $19,300, and an increase in marketing expenses of approximately $15,400.

            Sales and marketing expenses were $3,031,981 for the nine months ended January 31, 2018 compared to $2,770,367 for the nine months ended January 31, 2017. The increase of $261,614 or 9% was primarily attributable to an increase in wages, benefits and consulting fees of approximately $170,500, an increase in marketing expenses of approximately $40,100, an increase in other expenses of approximately $30,900, and an increase in dues and subscriptions expenses of approximately $20,100.

Research and Development

            Research and development expenses for the three and nine months ended January 31, 2018 and 2017 were as follows:

		January 31, 2018			January 31, 2017			Period-to-Period Change
			Percent			Percent			Percent
			of			of			Increase /
		Amount	Revenue		Amount	Revenue		Amount	(Decrease)
Three months ended	$	1,361,219	45%	$	1,215,783	47%	$	145,436	12%
Nine months ended	$	4,052,129	42%	$	3,524,959	42%	$	527,170	15%

            Research and development expenses were $1,361,219 for the three months ended January 31, 2018 compared to $1,215,783 for the three months ended January 31, 2017. The increase of $145,436 or 12% was primarily attributable to an increase in wages, benefits and consulting fees of approximately $125,600, and an increase in other expenses of approximately $19,800.

            Research and development expenses were $4,052,129 for the nine months ended January 31, 2018 compared to $3,524,959 for the nine months ended January 31, 2017. The increase of $527,170 or 15% was primarily attributable to an increase in wages, benefits and consulting fees of approximately $525,200, and an increase in other expenses of approximately $2,000.

General and Administrative

            General and administrative expenses for the three and nine months ended January 31, 2018 and 2017 were as follows:

		January 31, 2018			January 31, 2017			Period-to-Period Change
			Percent			Percent				Percent
			of			of				Increase /
		Amount	Revenue		Amount	Revenue		Amount		(Decrease)
Three months ended	$	800,049	27%	$	678,243	27%	$	121,806		18%
Nine months ended	$	2,407,234	25%	$	2,531,322	30%		($124,088	)	(5%	)

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            General and administrative expenses were $800,049 for the three months ended January 31, 2018 compared to $678,243 for the three months ended January 31, 2017. The increase of $121,806 or 18% in general and administrative expenses was primarily attributable to an increase in wages, benefits and consulting fees of approximately $46,200, an increase in audit, legal and other professional expenses of approximately $38,000, and an increase in bad debts expense of approximately $37,800.

            General and administrative expenses were $2,407,234 for the nine months ended January 31, 2018 compared to $2,531,322 for the nine months ended January 31, 2017. The decrease of $124,088 or 5% in general and administrative expenses was primarily attributable to a reversal of a provision in the current period for third party license fees that have been accrued in prior years, but are not payable, of approximately $115,600, a decrease in bad debts expense of approximately $100,500, a decrease in audit, legal and other professional expenses of approximately $36,800, and a decrease in other expenses of approximately $3,000, The decrease in general and administrative expenses were partially offset by an increase in wages, benefits and consulting fess of approximately $90,300, and an increase in investor relations expenses of approximately $41,500.

Interest and Other Income

            Interest income for the three and nine months ended January 31, 2018 was $nil for both periods compared to $36 and $222, respectively, for the three and nine months ended January 31, 2017. Interest expense for the three and nine months ended January 31, 2018 was $123 and $338, respectively, compared to $nil for both periods for the three and nine months ended January 31, 2017.

            Foreign exchange gain (loss) for the three and nine months ended January 31, 2018 was ($342,328) and ($756,512), respectively, compared to ($162,829) and $218,274, respectively, for the three and nine months ended January 31, 2017. The foreign exchange gain (loss) represents the gain (loss) on account of translation of the intercompany accounts of our subsidiary which maintains their records in Canadian dollars and transactional gains and losses. The foreign exchange gain (loss) includes the translation of quarterly intercompany transfer pricing invoices from our Canadian subsidiary to us.

Liquidity and Capital Resources

            The following is a summary of selected financial information as at the dates indicated:

Selected Consolidated Balance Sheet Data	January 31, 2018	April 30, 2017
Cash and cash equivalents	$3,048,418	$2,071,019
Current assets	$7,218,362	$4,375,341
Current liabilities	$4,570,198	$4,021,052
Total liabilities	$4,597,572	$4,053,837
Total assets	$14,800,998	$11,233,146

            As of January 31, 2018, we had $3,048,418 in cash and cash equivalents compared to $2,071,019 as of April 30, 2017, representing an increase of $977,399. Our working capital was $2,648,164 at January 31, 2018 compared to $354,289 at April 30, 2017, representing an increase of $2,293,875. Management anticipates that the future capital requirements of our company will be primarily funded through cash flows generated from operations and from working capital, and we may seek additional funding to meet ongoing operating expenses.

            Our company has $2,525,464 in cash held outside of the United States, and there is no intent to repatriate such cash at this time. Should we decide to repatriate such cash in the future, taxes would need to be accrued and paid.

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Cash Flows

            Our cash flows for the nine months ended January 31, 2018 and 2017 are as follows:

	Nine months ended	Nine months ended
	January 31, 2018	January 31, 2017
Net cash used in operating activities	($1,868,407)	($405,489)
Net cash used in investing activities	($87,279)	($106,278)
Net cash provided by financing activities	$2,863,596	$889,869
Net increase in cash	$977,399	$361,960

Operating Activities

            Our operating activities resulted in a net cash outflow of $1,868,407 for the nine months ended January 31, 2018. This compares to a net cash outflow of $405,489 for the same period last year representing an increase of $1,462,918. The net cash outflow from operating activities for the nine months ended January 31, 2018 was primarily a result of a net loss of $1,772,042 and an increase in accounts receivable of $1,799,488. The net cash outflow was offset by stock based compensation of $494,883, non-cash foreign exchange loss of $707,942, unearned revenue of $286,724, and an increase in accounts payable of $166,680.

Investing Activities

            Investing activities resulted in a net cash outflow of $87,279 for the nine months ended January 31, 2018 primarily for investments in computer equipment and intangible assets. This compares with a net cash outflow from investing activities of $106,278 for the same period last year primarily for purchases of computer equipment and intangible assets. At January 31, 2018, we did not have any material commitments for future capital expenditures.

Financing Activities

            Financing activities resulted in a net cash inflow of $2,863,596 for the nine months ended January 31, 2018 compared to a net cash inflow of $889,869 for the nine months ended January 31, 2017. The net cash inflow for the nine months ended January 31, 2018 was primarily a result of two non-brokered private placements. On January 24, 2018, we issued an aggregate of 427,500 shares of common stock under a non-brokered private placement at a price of $4.01 per share for total gross proceeds of $1,714,275 less issuance costs of $48,325. And on July 20, 2017, we issued an aggregate of 539,240 shares of common stock under a non-brokered private placement at a price of $2.20 per share for total gross proceeds of $1,186,328 less issuance costs of $19,832.

Off-Balance Sheet Arrangements

            We do not have, and do not have any present plans to implement, any off-balance sheet arrangements.

New Accounting Pronouncements

            In May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 “Revenue from Contracts with Customers” was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted. We are currently evaluating the impact of the adoption of this new standard.

            In March 2016, FASB issued ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”, which clarifies the guidance in the new revenue standard on assessing whether an entity is a principal or an agent in a revenue transaction. This conclusion impacts whether an entity reports revenue on a gross or net basis. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

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            In April 2016, FASB issued ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”, which clarifies the guidance in the new revenue standard regarding an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

            In May 2016, FASB issued ASU 2016-11, “Revenue Recognition: Customer Payments and Incentives”, which clarifies the guidance in recognizing costs for consideration given by a vendor to a customer as a component of cost of sales. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

            In May 2016, FASB issued ASU 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients” which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. While we are currently evaluating the method of adoption and the impact of the new revenue standard, as amended, on our Consolidated Financial Statements and related disclosures, we believe the adoption of the new standard may have a significant impact on the accounting for certain transactions with multiple elements or “bundled” arrangements because the requirement to have VSOE for undelivered elements under current accounting standards is eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. We continue to evaluate the impact of the new revenue standard on our consolidated financial statements and related disclosures.

            In February 2016, FASB issued ASU 2016-02, “Leases” which would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2018. We are currently evaluating the impact of its pending adoption of ASU 2016-02 on our consolidated financial statements.

            In June 2016, FASB issued ASU 2016-13, “Financial Instruments: Measurement of Credit Losses on Financial Instruments” which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for our ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected will a valuation provision. The amendments will be effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of this amendment on our consolidated financial statements and related disclosures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

            Not Applicable.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

            Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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            In connection with this quarterly report, as required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our company's Chief Executive Officer and Chief Financial Officer concluded that as of January 31, 2018, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

            There were no changes in our internal control over financial reporting that occurred during the quarter ended January 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

            None.

Item 1A. Risk Factors.

            Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumption or other future performance suggested herein.

            Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.

Risks Associated with our Business and Industry

            Lack of cash flow which may affect our ability to continue as a going concern.

            Presently, our operating cash flows are not sufficient to meet operating and capital expenses. Our business plan calls for continued research and development of our products and expansion of our market share. We will require additional financing to fund working capital and pay for operating expenses and capital requirements until we achieve a positive cash flow. However, our management projects that under our current operating plan that sufficient cash is available to meet our ongoing operating expenses and working capital requirements through March 2019.

            However, there is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that:

• we incur delays and additional expenses as a result of technology failure;

• we are unable to create a substantial market for our products; or

• we incur any significant unanticipated expenses.

            The occurrence of any of the aforementioned events could adversely affect our ability to meet our proposed business plans.

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            We depend on a mix of revenues and outside capital to pay for the continued development of our technology and the marketing of our products. Such outside capital may include the sale of additional stock and/or commercial borrowing. There can be no assurance that capital will continue to be available if necessary to meet these continuing development costs or, if the capital is available, that it will be on terms acceptable to us. Disruptions in financial markets and challenging economic conditions have and may continue to affect our ability to raise capital. The issuance of additional equity securities by us would result in a dilution, possibly a significant dilution, in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

            Our revenue, operating results and gross margin can fluctuate significantly and unpredictably from quarter-to-quarter and from year-to-year, and we expect that they will continue to do so, which could have a material adverse effect on our operating results.

            The rate at which our customers order our products, and the size of these orders, are highly variable and difficult to predict. In the past, we have experienced significant variability in our customer purchasing practices on a quarterly and annual basis, and we expect that this variability will continue, as a result of a number of factors, many of which are beyond our control, including:

• demand for our products and the timing and size of customer orders;

• length of sales cycles, which may be extended by selling our products through channel partners;

• length of time of deployment of our products by our customers;

• customers’ budgetary constraints;

• competitive pressures; and

• general economic conditions.

            As a result of this volatility in our customers’ purchasing practices, our revenue has historically fluctuated unpredictably on a quarterly and annual basis and we expect this to continue for the foreseeable future. Our budgeted expense levels depend in part on our expectations of future revenue. Because any substantial adjustment to expenses to account for lower levels of revenue is difficult and takes time, if our revenue declines, our operating expenses and general overhead would likely be high relative to revenue, which could have a material adverse effect on our operating margin and operating results.

            We may be unable to predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.

            Some of our products and services are sold on a subscription basis that is generally month-to-month or one year in length. Our customers have no obligation to renew their subscriptions for our services after the expiration of their initial subscription period, and some customers elect not to renew. We cannot provide assurance that our subscriptions will be renewed at the same or higher level of service, for the same number of licenses or for the same duration of time, if at all. We cannot provide assurance that we will be able to accurately predict future customer renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our services, our ability to continue to regularly add features and functionality, the reliability (including uptime) of our subscription services, the prices of our services, the prices of services offered by our competitors, mergers and acquisitions affecting our customer base, reductions in our customers’ spending levels or declines in customer activity as a result of economic downturns or uncertainty in financial markets. If our customers do not renew their subscriptions for our services or if they renew on terms less favorable to us, our revenue may decline.

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            If we are not able to manage our operating expenses, then our financial condition may be adversely affected.

            Operating expenses of $3,519,795 exceeded revenue of $3,083,903 for the three months ended January 31, 2018. Our ability to reach and maintain profitability is conditional upon our ability to manage our operating expenses. There is a risk that we will have to increase our operating expenses in the future. Factors that could cause our operating expenses to increase include our determination to spend more on sales and marketing in order to increase product sales or our determination that more research and development expenditures are required in order to keep our current software products competitive or in order to develop new products for the market. To the extent that our operating expenses increase without a corresponding increase in revenue, our financial condition would be adversely impacted.

            We face larger and better-financed competitors, which may affect our ability to achieve or maintain profitability.

            Management is aware of similar products which compete directly with our products and some of the companies developing these similar products are larger and better-financed than us and may develop products superior to those of our company. In addition to price competition, increased competition may result in other aggressive business tactics from our competitors, such as:

• emphasizing their own size and perceived stability against our smaller size and narrower recognition;

• providing customers “one-stop shopping” options for the purchase of network equipment and application software;

• offering customers financing assistance;

• making early announcements of competing products and employing extensive marketing efforts; and

• asserting infringement of their intellectual property rights.

            Such competition may potentially adversely affect our profitability.

            A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

            A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital, or a delisting from a stock exchange on which our common stock trades. Because our operations have been partially financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, there can be no assurance that we can raise additional capital or generate funds from operations sufficient to meet our obligations.

            The majority of our directors and officers are located outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or some of our directors or officers.

            The majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, investors may be effectively prevented from pursuing remedies under United States federal securities laws against some of our directors or officers.

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            We may in the future be subject to damaging and disruptive intellectual property litigation that could materially and adversely affect our business, results of operations and financial condition, as well as the continued viability of our company.

            We may be unaware of filed patent applications and issued patents that could relate to our products and services. Intellectual property litigation, if determined against us, could:

• result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers;

• cause us to lose access to key distribution channels;

• result in substantial employee layoffs or risk the permanent loss of highly-valued employees;

• materially and adversely affect our brand in the market place and cause a substantial loss of goodwill;

• affect our ability to raise additional capital;

• cause our stock price to decline significantly; and

• lead to the bankruptcy or liquidation of our company.

            Parties making claims of infringement may be able to obtain injunctive or other equitable relief that could effectively block our ability to provide our products or services and could cause us to pay substantial royalties, licensing fees or damages. The defense of any lawsuit could result in time-consuming and expensive litigation, regardless of the merits of such claims.

            We could lose our competitive advantages if we are not able to protect any proprietary technology and intellectual property rights against infringement, and any related litigation could be time-consuming and costly.

            Our success and ability to compete depends to a significant degree on our proprietary technology incorporated in our software. If any of our competitors' copy or otherwise gain access to our proprietary technology or develops similar technologies independently, we would not be able to compete as effectively. We also consider our family of registered and unregistered trademarks including CounterPath, Bria, eyebeam, X-Lite, and Softphone.com invaluable to our ability to continue to develop and maintain the goodwill and recognition associated with our brand. The measures we take to protect the proprietary technology software, and other intellectual property rights, which presently are based upon a combination of patents, patents pending, copyright, trade secret and trademark laws, may not be adequate to prevent their unauthorized use. Further, the laws of foreign countries may provide inadequate protection of such intellectual property rights.

            We may need to bring legal claims to enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, could result in substantial costs and divert resources from intended uses. In addition, notwithstanding any rights we have secured in our intellectual property, other persons may bring claims against us that we have infringed on their intellectual property rights, including claims based upon the content we license from third parties or claims that our intellectual property right interests are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our service marks or require us to make changes to our website or other of our technologies.

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            Our products may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands.

            Our industry is characterized by rapid changes in technology and customer demands. As a result, our products may quickly become obsolete and unmarketable. Our future success will depend on our ability to adapt to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and cost-effective basis. Further, our products must remain competitive with those of other companies with substantially greater resources. We may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products or enhanced versions of existing products. Also, we may not be able to adapt new or enhanced services to emerging industry standards, and our new products may not be favorably received.

            Unless we can establish broad market acceptance of our current products, our potential revenues may be significantly reduced.

            We expect that a substantial portion of our future revenue will be derived from the sale of our software products. We expect that these product offerings and their extensions and derivatives will account for a majority of our revenue for the foreseeable future. Broad market acceptance of our software products is, therefore, critical to our future success and our ability to continue to generate revenues. Failure to achieve broad market acceptance of our software products as a result of competition, technological change, or otherwise, would significantly harm our business. Our future financial performance will depend primarily on the continued market acceptance of our current software product offerings and on the development, introduction and market acceptance of any future enhancements. There can be no assurance that we will be successful in marketing our current product offerings or any new product offerings, applications or enhancements, and any failure to do so would significantly harm our business.

            Our use of open source software could impose limitations on our ability to commercialize our products.

            We incorporate open source software into our products. Although we closely monitor our use of open source software, the terms of many open source software licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to sell our products. In such event, we could be required to make our proprietary software generally available to third parties, including competitors, at no cost, to seek licenses from third parties to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis or at all, any of which could adversely affect our revenues and operating expenses.

            We may not be able to obtain necessary licenses of third-party technology on acceptable terms, or at all, which could delay product sales and development and adversely impact product quality.

            We have incorporated third-party licensed technology into our current products. We anticipate that we are also likely to need to license additional technology from third-parties to develop new products or product enhancements in the future. Third-party licenses may not be available or continue to be available to us on commercially reasonable terms. The inability to retain any third-party licenses required in our current products or to obtain any new third-party licenses to develop new products and product enhancements could require us to obtain substitute technology of lower quality or performance standards or at greater cost, and delay or prevent us from making these products or enhancements, any of which could seriously harm the competitive position of our products.

            Our products must interoperate with many different networks, software applications and hardware products, and this interoperability will depend on the continued prevalence of open standards.

            Our products are designed to interoperate with our customers’ existing and planned networks, which have varied and complex specifications, utilize multiple protocol standards, software applications and products from numerous vendors and contain multiple products that have been added over time. As a result, we must attempt to ensure that our products interoperate effectively with these existing and planned networks. To meet these requirements, we have and must continue to undertake development and testing efforts that require significant capital and employee resources. We may not accomplish these development efforts quickly or cost-effectively, or at all. If our products do not interoperate effectively, installations could be delayed or orders for our products could be cancelled, which would harm our revenue, gross margins and our reputation, potentially resulting in the loss of existing and potential customers. The failure of our products to interoperate effectively with our customers’ networks may result in significant warranty, support and repair costs, divert the attention of our engineering personnel from our software development efforts and cause significant customer relations problems.

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            Additionally, the interoperability of our products with multiple different networks is significantly dependent on the continued prevalence of standards for IP multimedia services, such as SIP or Session Initiation Protocol. Some of our existing and potential competitors are network equipment providers who could potentially benefit from the deployment of their own proprietary non-standards-based architectures. If resistance to open standards by network equipment providers becomes prevalent, it could make it more difficult for our products to interoperate with our customers’ networks, which would have a material adverse effect on our ability to sell our products to service providers.

            We are subject to the credit risk of our customers, which could have a material adverse effect on our financial condition, results of operations and liquidity.

            We are subject to the credit risk of our customers. Businesses that are good credit risks at the time of sale may become bad credit risks over time. In times of economic recession, the number of our customers who default on payments owed to us tends to increase. If we fail to adequately assess and monitor our credit risks, we could experience longer payment cycles, increased collection costs and higher bad debt expense.

            We are exposed to fluctuations in interest rates and exchange rates associated with foreign currencies.

            A majority of our revenue activities are transacted in U.S. dollars. However, we are exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies, of which the most significant to our operations for the three months ended January 31, 2018 is the Canadian dollar. We are primarily exposed to a fluctuating Canadian dollar as our operating expenses are primarily denominated in Canadian dollars while our revenues are primarily denominated in U.S. dollars. We address certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments. Our company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. These instruments generally have a maturity of less than one year. For these derivatives, our company reports the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss) in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings, and within the same line item on the consolidated statements of operations as the impact of the hedged transaction. There can be no assurance that our hedging program will not result in a negative impact on our earnings and earnings per share. We did not enter into any forward contracts for hedging purposes during the three months ended January 31, 2018 (2017 - none).

Risks Associated with our Common Stock

            Our directors control a substantial number of shares of our common stock, decreasing your influence on stockholder decisions.

            Based on the 5,935,206 shares of common stock that were issued and outstanding as of January 31, 2018, our directors owned approximately 51% of our outstanding common stock. As a result, our directors as a group could have a significant influence in delaying, deferring or preventing any potential change in control of our company; they will be able to strongly influence the actions of our board of directors even if they were to cease being directors of our company and can effectively control the outcome of actions brought to our stockholders for approval. Such a high level of ownership may adversely affect the exercise of your voting and other stockholder rights.

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            We do not expect to pay dividends in the foreseeable future.

            We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our common stock.

            The exercise of all or any number of outstanding stock options or the issuance of other stock-based awards or any issuance of shares to raise funds may dilute your holding of shares of our common stock.

            If the holders of outstanding stock options, warrants and deferred share units exercise or settle all of their vested stock options, warrants and deferred share units as at January 31, 2018, then we would be required to issue an additional 643,674 shares of our common stock, which would represent approximately 11% of our issued and outstanding common stock after such issuances. The exercise of any or all outstanding stock options that are exercisable below market price will result in dilution to the interests of other holders of our common stock.

            We may in the future grant to certain or all of our directors, officers, insiders and key employees stock options to purchase the shares of our common stock, bonus shares and other stock based compensation as non-cash incentives to such persons. Subject to applicable stock exchange rules, if any, we may grant these stock options and other stock based compensation at exercise prices equal to or less than market prices, and we may grant them when the market for our securities is depressed. The issuance of any additional shares of common stock or securities convertible into common stock will cause our existing shareholders to experience dilution of their holding of our common stock.

            In addition, shareholders could suffer dilution in their net book value per share depending on the price at which such securities are sold. Such issuance may cause a reduction in the proportionate ownership and voting power of all other shareholders. The dilution may result in a decline in the price of our shares of common stock or a change in the control of our company.

            We may be considered a “penny stock.” Penny stock rules will limit the ability of our stockholders to sell their shares of common stock.

            The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. In addition, since our common stock commenced trading on the NASDAQ Capital Market below the $4.00 minimum bid price per share requirement, our common stock would be considered a penny stock if we fail to satisfy the net tangible assets and revenue tests in Rule 3a51-1 under the Securities Exchange Act of 1934. Our securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.

            In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

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            The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements, which may limit a stockholder's ability to buy and/or sell shares of our common stock.

            The FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.

            Securities analysts may not publish favorable research or reports about our business or may publish no information which could cause our stock price or trading volume to decline.

            The trading market for our common stock will be influenced by the research and reports that industry or financial analysts publish about us and our business. We do not control these analyst reports. As a relatively small public company, we may be slow to attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. If any of the analysts who cover us issue an adverse opinion regarding our stock price, our stock price may decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports covering us, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities

            None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Issuer Purchases of Equity Securities
Period	Total number of shares purchased	Average price paid per share (Canadian dollars)	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs(1)
November 1, 2017 to November 30, 2017	−	−	−	184,213
December 1, 2017 to December 31, 2017	−	−	−	184,213
January 1, 2018 to January 31, 2018	−	−	−	184,213
Total	−	−	−	184,213

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(1) Pursuant to a normal course issuer bid announced on March 27, 2017, which commenced on March 29, 2017 and expires on March 28, 2018 to purchase up to 258,613 shares of our common stock.

            On March 27, 2017, we announced our intention to purchase, by way of a normal course issuer bid, for cancellation purposes, up to 258,613 shares of our common stock, representing approximately 10% of our then outstanding public float. We believe that our shares trade in a price range that does not adequately reflect their underlying value based on our business prospects.

            Purchases are made on the open market through the facilities of the TSX, NASDAQ Capital Market or such other stock exchange or quotation system upon which the our shares are then listed or quoted, including other Canadian marketplaces, at market prices prevailing at the time of purchase and may take place over a 12-month period beginning on March 29, 2017 and ending on March 28, 2018. We are permitted to make block purchases once per calendar week in accordance with the rules of the TSX. The daily purchase restriction is 1,000 shares, subject to certain prescribed exemptions. All shares purchased by our company under the normal course issuer bid are returned to treasury and cancelled.

            In connection with the normal course issuer bid, we renewed our automatic share purchase plan with National Bank Financial Inc. (“National Bank”), in order to facilitate purchases of our shares. Under the purchase plan, National Bank may purchase shares on our behalf at times when we would ordinarily not be permitted to purchase shares due to internal trading blackout periods, insider trading rules or otherwise. The purchase plan has been approved by the TSX and was implemented as of March 29, 2017. Purchases are made by National Bank on the open market based upon the parameters prescribed by the TSX, applicable laws and the terms and conditions of the purchase plan.

            To our knowledge, none of our directors, senior officers or other insiders (as defined in the TSX Company Manual) intend to sell any shares under the normal course issuer bid. However, sales by such persons through the facilities of the TSX may occur if the personal circumstances of any such person change or if any such person makes a decision unrelated to these normal course purchases. The benefits to any such person whose shares are purchased would be the same as the benefits available to any other holders whose shares are purchased.

            Stockholders may obtain a copy of the notice submitted to the TSX with respect to the normal course issuer bid, without charge, by contacting our Chief Financial Officer.

Item 3. Defaults Upon Senior Securities.

            None.

Item 4. Mine Safety Disclosures.

            Not Applicable.

Item 5. Other Information.

            None.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

(3)	Articles of Incorporation and By-laws
3.1	Articles of Incorporation
3.2	Bylaws

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3.3	Amended Bylaws
3.4	Articles of Merger
3.5	Amended Bylaws
3.6	Amended Bylaws
3.7	Amended Bylaws
3.8	Certificate of Amendment to Articles of Incorporation
(4)	Instruments defining the rights of security holders, including indentures
4.1	Employee Share Purchase Plan
4.2	Amended 2010 Stock Option Plan
4.3	Deferred Share Unit Plan
(10)	Material Contracts
10.1	Employment Agreement between CounterPath Solutions, Inc. and David Karp dated September 11, 2006
10.2	Piggyback Registrations Rights Agreement among our company and various shareholders, dated as of August 2, 2007
10.3	Amended Employment Agreement between Donovan Jones and CounterPath Solutions R&D Inc., a wholly owned subsidiary of CounterPath Solutions, Inc. dated September 13, 2007 (incorporated by reference from our Quarterly Report on Form 10-QSB filed on September 14, 2007)
10.4	Form of Subscription Agreement dated October 29, 2009 between our company and various investors
10.5	Form of Subscription Agreement between our company and various investors in connection with the non-brokered private placement completed on September 4, 2015
10.6	Form of Warrant Certificate issued to various investors in connection with the non-brokered private placement completed on September 4, 2015
10.7	Amended Employment Agreement between Donovan Jones and CounterPath Corporation and its wholly owned subsidiary, CounterPath Technologies Inc., dated February 17, 2016

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10.8	Form of Subscription Agreement between our company and various investors in connection with the non-brokered private placement completed on December 15, 2016
10.9	Form of Subscription Agreement between our company and various investors in connection with the non-brokered private placement completed on July 20, 2017
10.10	Form of Subscription Agreement between our company and various investors in connection with the non-brokered private placement completed on January 24, 2018
10.11	Amended Employment Agreement between David Karp and CounterPath Corporation and its wholly owned subsidiary, CounterPath Technologies Inc., dated March 7, 2018 (filed herewith).
(14)	Code of Ethics
14.1	Code of Business Conduct and Ethics and Compliance Program
(21)	Subsidiaries of CounterPath Corporation
	CounterPath Technologies Inc. (incorporated in the Province of British Columbia, Canada)
	BridgePort Networks, Inc. (incorporated in the state of Delaware)
(31)	Section 302 Certifications
31.1	Section 302 Certification of Donovan Jones (filed herewith).
31.2	Section 302 Certification of David Karp (filed herewith).
(32)	Section 906 Certifications
32.1	Section 906 Certification of Donovan Jones (filed herewith).
32.2	Section 906 Certification of David Karp (filed herewith).

46

SIGNATURES

            Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COUNTERPATH CORPORATION

By:	/s/ Donovan Jones
	Donovan Jones
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
	Date: March 13, 2018
	/s/ David Karp
	David Karp
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)
	Date: March 13, 2018

47

EX-10.11

AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

THIS AMENDMENT No. 2 (the “Amendment”) is dated for reference the 7th day of March, 2018.

BETWEEN

CounterPath Corporation a company incorporated under the laws of the state of Nevada and having an office at Suite 300, One Bentall Centre, 505 Burrard Street, Vancouver, British Columbia, Canada, V7X 1M3 and CounterPath Technologies Inc. (f.k.a. CounterPath Solutions R&D Inc.) a company incorporated under the laws of the province of British Columbia and having an office at Suite 300, One Bentall Centre, 505 Burrard Street, Vancouver, British Columbia, Canada, V7X 1M3 (hereinafter collectively referred to as the "Company")

AND

David Karp having an address for notice at 3780 Bayridge Avenue, West Vancouver, British Columbia, V7V 3J2 (hereinafter referred to as the "Employee")

WHEREAS:

A.	CounterPath Technologies Inc. and the Employee entered into an Employment Agreement dated July 31, 2007 (the “Agreement”), which superseded an original employment agreement dated September 11, 2006 as filed on the Company’s quarterly report on September 14, 2006;
B.	CounterPath Technologies Inc. and the Employee entered into an Amended Employment Agreement dated November 1, 2010 (the “Amendment No. 1”);
C.	The Employee’s annual salary was increased to Cdn$227,800.00 (Cdn$18,983.33 per month) effective February 1, 2017; and
D.	The Employee and the Company wish to enter into this Amendment to amend the terms of Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that for good consideration, the Agreement is modified as follows:

Section 2 (Salary & Benefits) of the Agreement shall be replaced as follows:

2.        Salary & Benefits. The Company shall pay the Employee a salary of Cdn$18,983.33 per month for the services of the Employee, payable at regular payroll periods established by the Company. The employee shall receive a monthly allowance of Cdn$800.00. The Employee's salary will be subject to deductions for Income Tax and Social Security remittances (collectively the "Government Deductions"). The Company shall also provide the Employee with (a) extended medical and dental insurance coverage as provided to other employees of the Company, and (b) participation in a bonus & incentive plan which shall provide the Employee the ability to earn up to a 30% bonus on his/her salary. The plan shall be split in to two components, the Company’s objectives and the Employee’s objectives, these objectives shall be mutually agreed to between the Company and the Employee. In addition, based on meeting agreed objectives, the bonus percentage may be increased at sole discretion of company.

CounterPath Corporation

Amendment No. 2 to Employment Agreement

Page 1 of 3

Section 9 shall be replaced as follows:

9.        Vacation. The Employee shall be entitled to a yearly paid vacation of 5 weeks and increases as approved by the Company. The Employee shall have due regard to the policies of the Company relating to the scheduling of vacations and the reasonable directions of his/her Manager.

Section 12.2 shall be replaced as follows:

If there is either (1) a change of control (to the extent of at least 50.01% of the equity of CounterPath Corporation) or (2) a change in the CEO and following such change in the CEO, the Employee‘s job duties are changed materially, the Employee may, without cause, terminate his employment upon 3 months' written notice to the Company. Following such notice from the Employee, the Company may require the Employee to perform his duties to the date of termination and the Employee will be paid his regular salary to date of termination (in addition to any applicable bonus and/or incentive outlined in Section 2.(b)). In addition, the Company will pay to the Employee Severance in accordance with the provisions of Section 13 hereof, inclusive of any severance payable pursuant to the provisions of the Employment Standards Act of British Columbia.

Section 13(a)(iii) (Severance) of the Agreement shall be replaced as follows:

After 12 months of employment, the Company will pay to Employee upon termination (1) CDN$120,000 (in addition to a bonus of 30% of CDN$120,000); and (2) an additional one months’ base compensation plus any monthly allowance (in addition to a bonus of 30% of one month’s base compensation) for each year worked, with pro rata portion for partial years worked (3) extended medical and dental insurance coverage as set out in Section 2.(b) for a period of 8 months (plus an additional month for each year worked after the first year) from termination; and (4) one-twenty-forth (1/24) of the number of Options granted, in accordance with Section 1.3 of each of the Stock Option Agreement(s) between the parties, each grant multiplied by the number of months the Employee worked for the Company from the date of each respective grant, shall immediately vest and become exercisable and (5) one-eighteenth (1/18) of the number of deferred share units granted, in accordance with the Deferred Share Unit Agreement(s) between the parties, each grant multiplied by the number of months the Employee worked for the Company from the date of each respective grant, shall immediately vest and become exercisable.

Section 13(b) (Severance) of the Agreement shall be replaced as follows:

If the Employee is terminated pursuant to Section 12.2, the Company will pay to Employee upon termination (1) CDN$120,000 (in addition to a bonus of 30% of CDN$120,000 ); (2) an additional one months’ base compensation plus any monthly allowance (in addition to a bonus of 30% one month’s base compensation) for each year worked; (3) extended medical and dental insurance coverage as set out in Section 2.(b) for a period of 8 months (plus an additional month for each year worked after the first year) from termination; and (4) all options and deferred share units, which have not vested in accordance with the agreements between the parties, shall immediately vest and become exercisable.

This Amendment is part of the Agreement between Employee and Company and together with the Agreement, contains the entire agreement of the parties as to its subject matter as of the Effective Date of this Amendment. Except as expressly amended by this Amendment, the Agreement remains in full force and effect according to its terms. In the event of any direct conflict between this Amendment and the terms and conditions of the Agreement, this Amendment governs.

IN WITNESS WHEREOF the parties hereto have duly executed this Amendment as of the date first above written.

COUNTERPATH CORPORATION	|	DAVID KARP
	|
	|
	|
	|
	|
/s/ Owen Matthews	|	/s/ David Karp
(Authorized Signature)	|	Signature of Employee
	|
	|
COUNTERPATH TECHNOLOGIES INC.	|	March 7, 2018
	|	Date Signed
/s/ Donovan Jones
(Authorized Signature)

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Donovan Jones, certify that:

1. I have reviewed this Quarterly Report of CounterPath Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2018	/s/ Donovan Jones
	Donovan Jones
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Karp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CounterPath Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2018	/s/ David Karp
	David Karp
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, Donovan Jones, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report of CounterPath Corporation (the “Company”) on Form 10-Q for the three months ended January 31, 2018, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Donovan Jones

Donovan Jones

President and Chief Executive Officer

(Principal Executive Officer)

March 13, 2018

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I, David Karp certify pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report of CounterPath Corporation (the “Company”) on Form 10-Q for the three months ended January 31, 2018, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David Karp

David Karp

Chief Financial Officer, Treasurer and Secretary

(Principal Financial Officer and Principal Accounting Officer)

March 13, 2018

XML

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2018	Mar. 08, 2018
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2018
Trading Symbol	cpah
Entity Registrant Name	COUNTERPATH CORP
Entity Central Index Key	0001236997
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,935,872
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

XML

INTERIM CONSOLIDATED BALANCE SHEETS - USD ($)	Jan. 31, 2018	Apr. 30, 2017
Current assets:
Cash and cash equivalents	$ 3,048,418	$ 2,071,019
Accounts receivable (net of allowance for doubtful accounts of $249,995 and $80,232, respectively)	3,932,957	2,133,469
Prepaid expenses and deposits	236,987	170,853
Total current assets	7,218,362	4,375,341
Deposits	102,417	91,400
Equipment	125,094	125,813
Goodwill	7,144,260	6,440,955
Other assets	210,865	199,637
Total Assets	14,800,998	11,233,146
Current liabilities:
Accounts payable and accrued liabilities	2,080,402	1,825,528
Accrued warranty	65,330	54,365
Customer deposits	2,794	6,211
Unearned revenue	2,421,672	2,134,948
Total current liabilities	4,570,198	4,021,052
Deferred lease inducements	17,611	23,022
Unrecognized tax liability	9,763	9,763
Total liabilities	4,597,572	4,053,837
Stockholders' equity:
Preferred stock, $0.001 par value Authorized: 100,000,000 Issued and outstanding: January 31, 2018 - nil; April 30, 2017 - nil	0	0
Common stock, $0.001 par value - Authorized: 10,000,000 Issued and outstanding: January 31, 2018 - 5,935,206; April 30, 2017 - 5,005,245	5,935	5,005
Treasury stock	0	(60)
Additional paid-in capital	75,071,382	71,680,575
Accumulated deficit	(62,253,057)	(60,481,015)
Accumulated other comprehensive loss - currency translation adjustment	(2,620,834)	(4,025,196)
Total stockholders' equity	10,203,426	7,179,309
Liabilities and Stockholders' Equity	$ 14,800,998	$ 11,233,146

XML

INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jan. 31, 2018	Apr. 30, 2017
Allowance for Doubtful Accounts Receivable, Current	$ 249,995	$ 80,232
Preferred Stock, Par Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	100,000,000	100,000,000
Preferred Stock, Shares Issued
Preferred Stock, Shares Outstanding
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Shares, Issued	5,935,206	5,005,245
Common Stock, Shares, Outstanding	5,935,206	5,005,245

XML

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Revenue - :
Software	$ 1,791,165	$ 1,324,203	$ 5,306,925	$ 4,223,066
Subscription, support and maintenance	1,120,690	1,031,162	3,069,371	2,944,349
Professional services and other	172,048	199,994	1,230,978	1,165,051
Total revenue	3,083,903	2,555,359	9,607,274	8,332,466
Operating expenses:
Cost of sales (includes depreciation of $4,753 (2017 - $4,975))	362,057	360,722	1,131,122	1,334,385
Sales and marketing	996,470	819,958	3,031,981	2,770,367
Research and development	1,361,219	1,215,783	4,052,129	3,524,959
General and administrative	800,049	678,243	2,407,234	2,531,322
Total operating expenses	3,519,795	3,074,706	10,622,466	10,161,033
Loss from operations	(435,892)	(519,347)	(1,015,192)	(1,828,567)
Interest and other income (expense), net:
Interest and other income	0	36	0	222
Interest expense	(123)	0	(338)	0
Foreign exchange gain/(loss)	(342,328)	(162,829)	(756,512)	218,274
Net income (loss) for the period	$ (778,343)	$ (682,140)	$ (1,772,042)	$ (1,610,071)
Net income (loss) per share:
Basic and diluted	$ (0.14)	$ (0.14)	$ (0.33)	$ (0.35)
Weighted average common shares outstanding:
Basic and diluted	5,539,352	4,789,675	5,354,690	4,631,472

XML

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)	9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Depreciation	$ 4,753	$ 4,975

XML

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Net income (loss) for the period	$ (778,343)	$ (682,140)	$ (1,772,042)	$ (1,610,071)
Other comprehensive loss:
Foreign currency translation adjustments	633,751	318,210	1,404,362	(534,069)
Comprehensive loss	$ (144,592)	$ (363,930)	$ (367,680)	$ (2,144,140)

XML

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Cash flows from operating activities:
Net (loss) for the period	$ (1,772,042)	$ (1,610,071)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred lease inducements	(7,626)	(7,419)
Depreciation and amortization	85,153	85,918
Stock-based compensation	494,883	701,515
Issuance of common stock for services	11,105	13,963
Foreign exchange loss (gain)	707,942	(267,383)
Changes in assets and liabilities:
Accounts receivable	(1,799,488)	394,047
Prepaid expenses and deposits	(46,973)	31,366
Accounts payable and accrued liabilities	166,680	(33,730)
Unearned revenue	286,724	274,314
Accrued warranty	10,965	(2,730)
Customer deposits	(5,730)	14,721
Net cash used in operating activities	(1,868,407)	(405,489)
Cash flows from investing activities:
Purchase of equipment	(73,415)	(81,678)
Purchase of other assets	(13,864)	(24,600)
Net cash used in investing activities	(87,279)	(106,278)
Cash flows from financing activities:
Common stock issued	2,895,655	898,693
Common stock repurchased	(32,059)	(8,824)
Net cash provided by financing activities	2,863,596	889,869
Foreign exchange effect on cash	69,489	(16,142)
Net increase in cash	977,399	361,960
Cash, beginning of the period	2,071,019	2,159,738
Cash, end of the period	3,048,418	2,521,698
Supplemental disclosure of cash flow information Cash paid for:
Interest	341	0
Income taxes paid	$ 0	$ 0

XML

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY - 9 months ended Jan. 31, 2018 - USD ($)	Common Shares [Member]	Treasury Shares [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Beginning Balance at Apr. 30, 2017	$ 5,005	$ (60)	$ 71,680,575	$ (60,481,015)	$ (4,025,196)	$ 7,179,309
Beginning Balance (Shares) at Apr. 30, 2017	5,005,245	(59,900)
Private placement, net of share issuance costs	$ 967		2,831,479			2,832,446
Private placement, net of share issuance costs (Shares)	966,740
Issuance of common stock for services	$ 14		33,303			33,317
Issuance of common stock for services (Shares)	14,000
Share repurchase plan		$ (14)	(33,807)			(33,821)
Share repurchase plan (Shares)		(13,600)
Cancellation of shares	$ (74)	$ 74	1,762			1,762
Cancellation of shares (Shares)	(73,500)	73,500
Stock-based compensation			494,883			494,883
Employee share purchase program	$ 22		61,970			61,992
Employee share purchase program (Shares)	22,226
Exercise of stock options	$ 1		1,217			$ 1,218
Exercise of stock options (Shares)	495					495
Net income (loss) for the period				(1,772,042)		$ (1,772,042)
Foreign currency translation adjustment					1,404,362	1,404,362
Ending Balance at Jan. 31, 2018	$ 5,935		$ 75,071,382	$ (62,253,057)	$ (2,620,834)	$ 10,203,426
Ending Balance (Shares) at Jan. 31, 2018	5,935,206

XML

Nature of Operations

9 Months Ended

Jan. 31, 2018

Nature of Operations [Text Block]

Note 1	Nature of Operations
	CounterPath Corporation (the “Company”) was incorporated in the State of Nevada on April 18, 2003. The shares of the Company’s common stock are listed for trading on the NASDAQ Capital Market in the United States of America and on the Toronto Stock Exchange in Canada.
	The Company focuses on the design, development, marketing and sales of software applications and related services, such as pre and post sales technical support and customization services, that enable enterprises and telecommunication service providers to deliver Unified Communications (UC) services, including voice, video, messaging and collaboration functionality, over their Internet Protocol, or IP, based networks. The Company’s products are sold either directly or through channel partners, to small, medium and large businesses (“enterprises”) and telecom service providers, in North America, and in Europe, Middle East, Africa (“collectively EMEA”), Asia Pacific and Latin America.

XML

Significant Accounting Policies

9 Months Ended

Jan. 31, 2018

Significant Accounting Policies [Text Block]

Note 2	Significant Accounting Policies
	These interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are stated in U.S. dollars except where otherwise disclosed. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for the period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates.
	These interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business.

a)	Basis of Presentation
	These interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, CounterPath Technologies Inc. (“CounterPath Technologies”), a company existing under the laws of the province of British Columbia, Canada, and BridgePort Networks, Inc. (“BridgePort”), incorporated under the laws of the state of Delaware. All inter- company transactions and balances have been eliminated.
	The Company has experienced volatile revenues as a result of a number of factors including its buildout of a cloud based subscription platform concurrent with the change of its licensing model to subscription based licensing and has not reached profitable operations which raises substantial doubt about its ability to continue operating as a going concern within one year of the date of the financial statements.
	The Company has historically been able to manage liquidity requirements through cost management and cost reduction measures, supplemented with raising additional financing. To alleviate this situation, the Company has plans in place to improve its financial position and liquidity, while executing on its growth strategy, by managing and or reducing costs that are not expected to have an adverse impact on the ability to generate cash flows.
	In addition, the Company has historically been able to raise additional financing to assist with the Company’s transition.
	As of the date of these financial statements, with planned cost management and reduction measures, the Company has sufficient liquidity to meet the ongoing cash requirements of the Company for one year after the issuance date of the financial statements. Therefore, although substantial doubt has been raised, this has been alleviated by management’s plans.

b)	Interim Reporting
	The information presented in the accompanying interim consolidated financial statements is without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
	These statements reflect all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America. Except where noted, these interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2017 annual audited consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2017 annual audited consolidated financial statements.
	Operating results for the nine months ended January 31, 2018 are not necessarily indicative of the results that can be expected for the year ending April 30, 2018.

c)	New Accounting Pronouncements
	In May 2014, FASB issued ASU 2014-09, Revenue From Contracts With Customers (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this new standard.
	In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in the new revenue standard on assessing whether an entity is a principal or an agent in a revenue transaction. This conclusion impacts whether an entity reports revenue on a gross or net basis. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance in the new revenue standard regarding an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In May 2016, the FASB issued ASU 2016-11, Revenue Recognition: Customer Payments and Incentives, which clarifies the guidance in recognizing costs for consideration given by a vendor to a customer as a component of cost of sales. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow- Scope Improvements and Practical Expedients which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. While we are currently evaluating the method of adoption and the impact of the new revenue standard, as amended, on our Consolidated Financial Statements and related disclosures, we believe the adoption of the new standard may have a significant impact on the accounting for certain transactions with multiple elements or “bundled” arrangements because the requirement to have VSOE for undelivered elements under current accounting standards is eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. We continue to evaluate the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.
	In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Measurement of Credit Losses on Financial Instruments which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for a company’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected will a valuation provision. The amendments will be effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of this amendment on our consolidated financial statements and related disclosures.
	In February 2016, FASB issued ASU 2016-02, Leases . The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right -of-use assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements.

d)	Derivative Instruments
	The Company accounts for derivative instruments, consisting of foreign currency forward contracts, pursuant to the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires the Company to measure derivative instruments at fair value and record them in the balance sheet as either an asset or liability and expands financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, results of operations and cash flows. The Company does not use derivative instruments for trading purposes. ASC 815 also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.
	The Company also routinely enters into foreign currency forward contracts, not designated as hedging instruments, to protect the Company from fluctuations in exchange rates. Gains or losses arising out of marked to market fair value valuation of forward contracts, not designated as hedges, are recognized in net income.
	The Company records foreign currency forward contracts on its Consolidated Balance Sheets as derivative instruments assets or liabilities depending on whether the net fair value of such contracts is a net asset or net liability, respectively (see Note 4 “Derivative Financial Instruments and Risk Management,” of the Notes to the Consolidated Financial Statements). The Company did not enter any foreign currency derivatives designated as cash flow hedges in the three and nine months ended January 31, 2018.

e)	Goodwill
	Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. ASC Topic 350 (“ASC 350”) requires goodwill to be tested for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company's business enterprise below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis.
	Management has determined that the Company currently has a single reporting unit which is CounterPath Corporation. If the recorded value of the assets, including goodwill, and liabilities (“net book value”) of the reporting unit exceeds its fair value, an impairment loss may be required.
	Goodwill of $6,339,717 (CDN$6,704,947) and $2,083,960 (CDN$2,083,752) was initially recorded as the Company was deemed to be the acquirer of NewHeights Software Corporation (“NewHeights”) on August 2, 2007 and FirstHand Technologies Inc. (“FirstHand”) on February 1, 2008, respectively. Translated to U.S. dollars using the period end rate, the goodwill balance at January 31, 2018 was $5,450,605 (CDN$6,704,947) (April 30, 2017 - $4,914,029) in respect of NewHeights and $1,693,655 (CDN$2,083,414) (April 30, 2017 - $1,526,926) in respect of FirstHand. Management will perform its annual impairment test in its fiscal fourth quarter. No impairment charges were recorded for the nine months ended January 31, 2018 and 2017.

f)	Accounts Receivable and Allowance for Doubtful Accounts
	Accounts receivable are presented net of an allowance for doubtful accounts.

		January 31,			April 30,
		2018			2017
Balance of allowance for doubtful accounts, beginning of period/year	$	80,232		$	547,173
Bad debt provision		171,693			346,689
Write-off of receivables		(1,930	)		(813,630	)
Balance of allowance for doubtful accounts, end of period/year	$	249,995		$	80,232

The Company determines the allowance for doubtful accounts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment terms, previous loss history, and the customer’s current ability to pay its obligation. When the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a charge to the allowance to reduce the customer’s related accounts.

g)	Revenue Recognition
	The Company’s revenue is generated from the sale of software license, subscription fees related to the cloud offering, support and maintenance services and professional services. The Company recognizes revenue in accordance with ASC 985-605 “Software Revenue Recognition”.
	Software license revenue is recognized for sales of perpetual licenses.
	Subscription, support and maintenance revenue is generated from recurring fees purchased through the Company’s cloud based offerings, where the customer has no right to take possession of the underlying software at any time and is recognized ratably as the service is delivered.
	Professional and other services include software customization, implementation, training, and dedicated engineering which are recognized as the related service has been performed.

h)

Earnings Per Share

The Company computes net loss per share in accordance with ASC Topics 260 and ASC 260-10. ASC Topics 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options and warrants using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the nine months ended January 31, 2018 and 2017, common share equivalents, consisting of common shares issuable, on exercise or settlement, as applicable, of options, warrants and deferred share units (“DSUs”) of 1,144,172 and 867,309, respectively, were not included in the computation of diluted EPS because the effect was anti-dilutive.

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Related Party Transactions

9 Months Ended

Jan. 31, 2018

Related Party Transactions [Text Block]

Note 3	Related Party Transactions
	During the three and nine months ended January 31, 2018, the Company through its wholly owned subsidiary, CounterPath Technologies, paid $21,911 and $65,277 (2017 - $19,750 and $59,250) to KRP Properties (“KRP”) (previously known as Kanata Research Park Corporation) for leased office space. KRP is controlled by the Chairman of the Company.
	On November 21, 2013, the Company, through its wholly owned subsidiary, CounterPath Technologies, entered into an agreement with 8007004 (Canada) Inc. (“8007004”) to lease office space. 8007004 is controlled by a member of the board of directors of the Company. CounterPath Technologies, paid $8,258 and $24,820 (2017 - $7,671 and $23,013) for the three and nine months ended January 31, 2018, respectively.
	On January 24, 2018, the Company issued an aggregate of 427,500 shares of common stock under a non-brokered private placement (“Private Placement”) at a price of $4.01 per share for total gross proceeds of $1,714,275 less issuance costs of $14,956. In connection with the Private Placement, KRP, a company controlled by the Chairman of the Company, purchased 125,000 shares and KMB Trac Two Holdings Ltd., a company owned by the spouse of a director of our Company, purchased 125,000 shares.
	On July 20, 2017, our Company issued an aggregate of 539,240 shares of common stock under a non- brokered private placement at a price of $2.20 per share for total gross proceeds of $1,186,328 less issuance costs of $19,832. In connection with this private placement, Wesley Clover International Corporation, a Company controlled by the Chairman of our Company, purchased 144,357 shares, KMB Trac Two Holdings Ltd., a company owned by the spouse of a director of our Company, purchased 180,446 shares, the chief executive officer and a director of our company, purchased 11,368 shares, the chief financial officer of our company, purchased 4,511 shares, and the executive vice president, sales and marketing of our Company, purchased 4,545 shares.
	On December 15, 2016, the Company issued an aggregate of 454,097 shares of common stock under a non-brokered private placement (“Private Placement”) at a price of $2.05 per share for total gross proceeds of $930,899 less issuance costs of $32,207. In connection with the Private Placement, KRP, a company controlled by the Chairman of the Company, purchased 198,000 shares and a director and chief executive officer of the Company purchased 12,195 shares.
	The above transactions are in the normal course of operations and are recorded at amounts established and agreed to between the related parties.

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Derivative Financial Instruments and Risk Management

9 Months Ended

Jan. 31, 2018

Derivative Financial Instruments and Risk Management [Text Block]

Note 4	Derivative Financial Instruments and Risk Management
	In the normal course of business, the Company is exposed to fluctuations in the exchange rates associated with foreign currencies. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk.
	Foreign Currency Exchange Rate Risk
	A majority of the Company’s revenue activities are transacted in U.S. dollars. However, the Company is exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies, of which the most significant to the Company’s operations for the three and nine months ended January 31, 2018 is the Canadian dollar as a majority of the Company’s expenses are in Canadian dollars. The Company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. During the three and nine months ended January 31, 2018 and 2017, the Company did not enter into any cash flow hedges.

The Company also periodically enters into foreign currency forward contracts, not designated as hedging instruments, to protect it from fluctuations in exchange rates. During the three and nine months ended January 31, 2018, the Company had not entered into any foreign currency forward contracts.

Fair Value Measurement

When available, the Company uses quoted market prices to determine fair value, and classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market–based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market–based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3.

Fair value measurements are classified according to the lowest level input or value–driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

Fair value measurement includes the consideration of non–performance risk. Non–performance risk refers to the risk that an obligation (either by a counterparty or the Company) will not be fulfilled. For financial assets traded in an active market (Level 1), the non–performance risk is included in the market price. For certain other financial assets and liabilities (Level 2 and 3), the Company’s fair value calculations have been adjusted accordingly.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of January 31, 2018 and April 30, 2017.

		Carrying			Fair Value
As at January 31, 2018		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	3,048,418	$	3,048,418	1	N/A

		Carrying			Fair Value
As at April 30, 2017		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	2,071,019	$	2,071,019	1	N/A

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Common Stock

9 Months Ended

Jan. 31, 2018

Common Stock [Text Block]

Note 5	Common Stock
	Private Placement
	On January 24, 2018, the Company issued an aggregate of 427,500 shares of common stock under a non-brokered private placement at a price of $4.01 per share for total gross proceeds of $1,714,275 less issuance costs of $48,325.
	On October 16, 2017, the Company entered into an agreement to issue 14,000 shares of the Company’s common stock in exchange for investor relation services.

On July 20, 2017, the Company issued an aggregate of 539,240 shares of common stock under a non- brokered private placement at a price of $2.20 per share for total gross proceeds of $1,186,328 less issuance costs of $19,832.

On December 15, 2016, the Company issued an aggregate of 454,097 shares of common stock under a non-brokered private placement at a price of $2.05 per share for total gross proceeds of $930,899 less issuance costs of $32,206.

On April 4, 2016, the Company entered into an agreement to issue 25,000 shares of the Company’s common stock in exchange for advisory services which was subsequently amended to 23,500 shares. The shares were issued in three tranches: (i) the first tranche of 10,000 shares was issued on April 22, 2016; (ii) the second tranche of 10,000 shares was issued on May 25, 2016; and (iii) the third tranche of 3,500 shares was issued on June 30, 2016.

Stock Options

The Company has a stock option plan (the “2010 Stock Option Plan”) under which options to purchase shares of the Company’s common stock may be granted to employees, directors and consultants. Stock options entitle the holder to purchase shares of the Company’s common stock at an exercise price determined by the board of directors (the “Board”) of the Company at the time of the grant. The options generally vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, at which time the options are fully vested.

The maximum number of shares of common stock authorized by the stockholders and reserved for issuance by the Board under 2010 Stock Option Plan is 986,000.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. The Company applied an estimated forfeiture rate of 15% for the three and nine months ended January 31, 2018 and 2017 in determining the expense recorded in the accompanying consolidated statement of operations.

For the majority of the stock options granted, the number of shares issued on the date the stock options are exercised is net of the minimum statutory withholding requirements that the Company pays in cash to the appropriate taxing authorities on behalf of its employees. Although these withheld shares are not issued or considered common stock repurchases under our authorized plan they are treated as common stock repurchases in our consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting.

The weighted-average fair value of options granted during the three and nine months ended January 31, 2018 was $1.90 and $1.90, respectively (2017 - $2.03 and $2.36). The weighted-average assumptions utilized to determine such values are presented in the following table:

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Risk-free interest rate	2.14%	2.10%	2.14%	1.20%
Expected volatility	95.55%	95.17%	95.55%	95.19%
Expected term	3.7 years	3.7 years	3.7 years	3.7 years
Dividend yield	0%	0%	0%	0%

The following is a summary of the status of the Company’s stock options as of January 31, 2018 and the stock option activity during the nine months ended January 31, 2018:

	Weighted Average
	Number of		Exercise Price
	Options		per Share
Outstanding at April 30, 2017	396,922		$2.46
Granted	324,000		$2.89
Forfeited/Cancelled	(11,645	)	$2.49
Expired	(30,000	)	$2.50
Exercised	(495	)	$2.46
Outstanding at January 31, 2018	678,782		$2.66
Exercisable at January 31, 2018	242,536		$2.48
Exercisable at April 30, 2017	221,739		$2.49

The following table summarizes stock options outstanding as of January 31, 2018:

	Number of		Aggregate		Number of		Aggregate
	Options		Intrinsic		Options		Intrinsic
Exercise Price	Outstanding		Value	Expiry Date	Exercisable		Value
$2.03	10,000	$	25,300	December 15, 2021	2,708	$	6,851
$2.40	60,000		129,600	July 15, 2021	22,500		48,600
$2.41	49,500		106,425	December 14, 2020	25,765		55,395
$2.46	25,000		52,500	March 14, 2022	5,208		10,937
$2.50	210,282		433,181	July 25, 2018 to July 17, 2020	186,355		383,891
$2.89	324,000		541,080	December 14, 2022	–		–
January 31, 2018	678,782	$	1,288,086		242,536	$	505,674
April 30, 2017	396,922	$	–		221,739	$	–

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of $4.56 per share as of January 31, 2018 (April 30, 2017 – $1.93), which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of January 31, 2018 was 242,536 (April 30, 2017 – nil). The total intrinsic value of options exercised during the nine months ended January 31, 2018 was $1,742 (January 31, 2017 – $nil). The grant date fair value of options vested during the three and nine months ended January 31, 2018 was $60,066 and $233,748, respectively (January 31, 2017 - $108,194 and $324,422).

The following table summarizes non-vested stock purchase options outstanding as of January 31, 2018:

				Weighted
	Number of			Average Grant
	Options			Date Fair Value
Non-vested options at April 30, 2017	175,183		$	3.49
Granted	324,000		$	1.90
Vested	(59,103	)	$	3.95
Forfeited/Cancelled	(3,834	)	$	2.12
Non-vested options at January 31, 2018	436,246		$	1.94

As of January 31, 2018, there was $626,925 of total unrecognized compensation cost related to unvested share-based compensation awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 3.5 years.

Employee and non-employee stock-based compensation amounts classified in the Company’s consolidated statements of operations for the three and nine months ended January 31, 2018 and 2017 are as follows:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Cost of sales	$	11,583	$	23,388	$	39,439	$	77,441
Sales and marketing		17,141		27,906		58,814		147,324
Research and development		11,006		24,563		42,933		82,081
General and administrative		25,630		41,961		97,978		130,747
Total stock-option based compensation		65,360	$	117,818	$	239,164	$	437,593

Warrants

The following table summarizes warrants outstanding and exercisable as of January 31, 2018:

	Number of			Weighted Average
	Warrants			Exercise Price	Expiry Dates
Warrants at April 30, 2017	146,500		$	7.50	September 4, 2017
Granted	–			–	–
Exercised	–			–	–
Expired	(146,500	)	$	7.50	September 4, 2017
Warrants at January 31, 2018	–			–

Employee Stock Purchase Plan

Under the terms of the Employee Stock Purchase Plan (the “ESPP”) all regular salaried (non- probationary) employees can purchase up to 6% of their base salary in shares of the Company’s common stock at market price. The Company will match 50% of the shares purchased by issuing or purchasing in the market up to 3% of the respective employee’s base salary in shares. During the nine months ended January 31, 2018, the Company matched $36,210 (2017 - $26,461) in shares purchased by employees under the ESPP. During the nine months ended January 31, 2018, 12,832 shares (2017 – 35,103 shares) were purchased on the open market and 22,226 shares (2017 – no shares) were issued from treasury under the ESPP.

A total of 120,000 shares have been reserved for issuance under the ESPP. As of January 31, 2018, a total of 63,977 shares were available for issuance under the ESPP.

Normal Course Issuer Bid Plan

Pursuant to a normal course issuer bid (“NCIB”) commencing on March 29, 2017 and expiring March 28, 2018, the Company is authorized to purchase 258,613 shares of the Company’s common stock through the facilities of the Toronto Stock Exchange (the “TSX”) and other Canadian marketplaces or U.S. marketplaces. During the period March 29, 2017 to January 31, 2018, the Company repurchased 73,500 common shares at an average price of $2.18 (CDN$2.81) for a total of $160,230. As of January 31, 2018, a total of 73,500 shares have been cancelled.

Deferred Share Unit Plan

Under the terms of the Deferred Share Unit Plan (the “DSUP”), each DSU is equivalent to one share of the Company’s common stock. The maximum number of common shares that may be reserved for issuance to any one participant pursuant to DSUs granted under the DSUP and any share compensation arrangement is 5% of the number of shares outstanding at the time of reservation. A DSU granted to a participant who is a director of the Company shall vest immediately on the award date. A DSU granted to a participant other than a director will generally vest as to one-third (1/3) of the number of DSUs granted on the first, second and third anniversaries of the award date. Fair value of the DSUs, which is based on the closing price of the shares of the Company’s common stock on the date of grant, is recorded as compensation expense over the vesting period.

On September 12, 2017, the maximum number of shares of common stock authorized by the Company’s stockholders reserved for issuance under the DSUP was increased from 500,000 shares to 700,000 shares. During the nine months ended January 31, 2018, 119,998 (2017 90,453) DSUs were issued under the DSUP, of which 40,129 were granted to officers or employees and 79,869 were granted to non-employee directors. As of January 31, 2018, a total of 210,597 shares were available for issuance under the DSUP.

The following table summarizes the Company’s outstanding DSU awards as of January 31, 2018, and changes during the period then ended:

			Weighted
			Average Grant
			Date Fair
	Number of DSUs		Value Per DSU
DSUs outstanding at April 30, 2017	345,392	$	7.85
Granted	119,998	$	2.20
DSUs outstanding at January 31, 2018	465,390	$	6.40

The following table summarizes information regarding the non-vested DSUs outstanding as of January 31, 2018:

				Weighted
				Average Grant
				Date Fair
	Number of DSUs			Value Per DSU
Non-vested DSUs at April 30, 2017	46,217		$	4.58
Granted	119,998		$	2.21
Vested	(101,963	)	$	3.02
Non-vested DSUs at January 31, 2018	64,252		$	2.21

As of January 31, 2018, there was $92,142 (2017 – $142,688) of total unrecognized compensation cost related to unvested DSU awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 2.03 years (2017 – 1.54 years).

Employee and non-employee DSU based compensation amounts classified in the Company’s consolidated statements of operations for the three and nine months ended January 31, 2018 and 2017 are as follows:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Sales and marketing	$	–	$	–	$	–	$	–
Research and development		–		–		–		–
General and administrative		22,564		32,507		255,719		263,922
Total DSU based compensation	$	22,564	$	32,507	$	255,719	$	263,922

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Segmented Information

9 Months Ended

Jan. 31, 2018

Segmented Information [Text Block]

Note 6	Segmented Information
	The Company’s chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. Accordingly, the Company has concluded that it has one reportable operating segment.
	Revenues are based on the country in which the customer is located. The following is a summary of total revenues by geographic area for the three and nine months ended January 31, 2018 and 2017:

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
North America	$	1,648,430	$	1,469,552	$	5,158,026	$	4,904,939
EMEA		1,127,537		704,788		3,304,887		2,394,724
Asia Pacific		216,479		172,140		744,693		642,262
Latin America		91,457		208,879		399,668		390,541
	$	3,083,903	$	2,555,359	$	9,607,274	$	8,332,466

All of the Company’s long-lived assets, which include equipment, intangible assets, goodwill and other assets, are located in Canada and the United States as follows:

		As at
		January 31, 2018		April 30, 2017
Canada	$	7,429,394	$	6,731,644
United States		50,825		34,761
	$	7,480,219	$	6,766,405

Revenue from significant customers for the three and nine months ended January 31, 2018 and 2017 is summarized as follows:

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Customer A	17%	10%	6%	8%

Accounts receivable balance for Customer A was $620,000 as at January 31, 2018 (April 30, 2017 - $280,617).

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Commitments

9 Months Ended

Jan. 31, 2018

Commitments [Text Block]

Note 7	Commitments
	Total payable over the term of the agreements for the years ended April 30 are as follows:

		Office Leases –		Office Leases –		Total Office
		Related Party		Unrelated Party		Leases
2018		29,256		144,676		173,932
2019		117,022		579,893		696,915
2020		5,506		284,746		290,252
2021		−		6,092		6,092
	$	151,784	$	1,015,407	$	1,167,191

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Contingencies

9 Months Ended

Jan. 31, 2018

Contingencies [Text Block]

Note 8	Contingencies
	The Company is party to legal claims from time to time which arise in the normal course of business. These claims are not expected to have a material adverse effect on the financial position, results of operations or cash flows of the Company.

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Earnings (loss) per common share (EPS)

9 Months Ended

Jan. 31, 2018

Earnings (loss) per common share (EPS) [Text Block]

Note 9	Earnings (loss) per common share (“EPS”)
	Computation of basic and diluted EPS:

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2018			2017			2018			2017
Net loss	$	(778,343	)	$	(682,140	)	$	(1,772,042	)	$	(1,610,071	)
Weighted average common shares outstanding – basic and diluted		5,539,352			4,789,675			5,354,690			4,631,472
Basic and diluted EPS	$	(0.14	)	$	(0.14	)	$	(0.33	)	$	(0.35	)

For the nine months ended January 31, 2018 and 2017, common share equivalents, consisting of common shares issuable, on exercise or settlement, as applicable, of options, warrants and deferred share units (“DSUs”) of 1,144,172 and 867,309, respectively, were not included in the computation of diluted EPS because the effect was anti-dilutive.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Jan. 31, 2018

Basis of Presentation [Policy Text Block]

a)	Basis of Presentation
	These interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, CounterPath Technologies Inc. (“CounterPath Technologies”), a company existing under the laws of the province of British Columbia, Canada, and BridgePort Networks, Inc. (“BridgePort”), incorporated under the laws of the state of Delaware. All inter- company transactions and balances have been eliminated.
	The Company has experienced volatile revenues as a result of a number of factors including its buildout of a cloud based subscription platform concurrent with the change of its licensing model to subscription based licensing and has not reached profitable operations which raises substantial doubt about its ability to continue operating as a going concern within one year of the date of the financial statements.
	The Company has historically been able to manage liquidity requirements through cost management and cost reduction measures, supplemented with raising additional financing. To alleviate this situation, the Company has plans in place to improve its financial position and liquidity, while executing on its growth strategy, by managing and or reducing costs that are not expected to have an adverse impact on the ability to generate cash flows.
	In addition, the Company has historically been able to raise additional financing to assist with the Company’s transition.
	As of the date of these financial statements, with planned cost management and reduction measures, the Company has sufficient liquidity to meet the ongoing cash requirements of the Company for one year after the issuance date of the financial statements. Therefore, although substantial doubt has been raised, this has been alleviated by management’s plans.

Interim Reporting [Policy Text Block]

b)	Interim Reporting
	The information presented in the accompanying interim consolidated financial statements is without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
	These statements reflect all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with generally accepted accounting principles in the United States of America. Except where noted, these interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2017 annual audited consolidated financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2017 annual audited consolidated financial statements.
	Operating results for the nine months ended January 31, 2018 are not necessarily indicative of the results that can be expected for the year ending April 30, 2018.

New Accounting Pronouncements [Policy Text Block]

c)	New Accounting Pronouncements
	In May 2014, FASB issued ASU 2014-09, Revenue From Contracts With Customers (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this new standard.
	In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in the new revenue standard on assessing whether an entity is a principal or an agent in a revenue transaction. This conclusion impacts whether an entity reports revenue on a gross or net basis. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies the guidance in the new revenue standard regarding an entity’s identification of its performance obligations in a contract, as well as an entity’s evaluation of the nature of its promise to grant a license of intellectual property and whether or not that revenue is recognized over time or at a point in time. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In May 2016, the FASB issued ASU 2016-11, Revenue Recognition: Customer Payments and Incentives, which clarifies the guidance in recognizing costs for consideration given by a vendor to a customer as a component of cost of sales. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.
	In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow- Scope Improvements and Practical Expedients which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. While we are currently evaluating the method of adoption and the impact of the new revenue standard, as amended, on our Consolidated Financial Statements and related disclosures, we believe the adoption of the new standard may have a significant impact on the accounting for certain transactions with multiple elements or “bundled” arrangements because the requirement to have VSOE for undelivered elements under current accounting standards is eliminated under the new standard. Accordingly, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. We continue to evaluate the impact of the new revenue standard on our Consolidated Financial Statements and related disclosures.
	In June 2016, the FASB issued ASU 2016-13, Financial Instruments: Measurement of Credit Losses on Financial Instruments which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for a company’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected will a valuation provision. The amendments will be effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of this amendment on our consolidated financial statements and related disclosures.
	In February 2016, FASB issued ASU 2016-02, Leases . The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right -of-use assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements.

Derivative Instruments [Policy Text Block]

d)	Derivative Instruments
	The Company accounts for derivative instruments, consisting of foreign currency forward contracts, pursuant to the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires the Company to measure derivative instruments at fair value and record them in the balance sheet as either an asset or liability and expands financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, results of operations and cash flows. The Company does not use derivative instruments for trading purposes. ASC 815 also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.
	The Company also routinely enters into foreign currency forward contracts, not designated as hedging instruments, to protect the Company from fluctuations in exchange rates. Gains or losses arising out of marked to market fair value valuation of forward contracts, not designated as hedges, are recognized in net income.
	The Company records foreign currency forward contracts on its Consolidated Balance Sheets as derivative instruments assets or liabilities depending on whether the net fair value of such contracts is a net asset or net liability, respectively (see Note 4 “Derivative Financial Instruments and Risk Management,” of the Notes to the Consolidated Financial Statements). The Company did not enter any foreign currency derivatives designated as cash flow hedges in the three and nine months ended January 31, 2018.

Goodwill [Policy Text Block]

e)	Goodwill
	Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. ASC Topic 350 (“ASC 350”) requires goodwill to be tested for impairment annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company's business enterprise below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis.
	Management has determined that the Company currently has a single reporting unit which is CounterPath Corporation. If the recorded value of the assets, including goodwill, and liabilities (“net book value”) of the reporting unit exceeds its fair value, an impairment loss may be required.
	Goodwill of $6,339,717 (CDN$6,704,947) and $2,083,960 (CDN$2,083,752) was initially recorded as the Company was deemed to be the acquirer of NewHeights Software Corporation (“NewHeights”) on August 2, 2007 and FirstHand Technologies Inc. (“FirstHand”) on February 1, 2008, respectively. Translated to U.S. dollars using the period end rate, the goodwill balance at January 31, 2018 was $5,450,605 (CDN$6,704,947) (April 30, 2017 - $4,914,029) in respect of NewHeights and $1,693,655 (CDN$2,083,414) (April 30, 2017 - $1,526,926) in respect of FirstHand. Management will perform its annual impairment test in its fiscal fourth quarter. No impairment charges were recorded for the nine months ended January 31, 2018 and 2017.

Accounts Receivable and Allowance for Doubtful Accounts [Policy Text Block]

f)	Accounts Receivable and Allowance for Doubtful Accounts
	Accounts receivable are presented net of an allowance for doubtful accounts.

		January 31,			April 30,
		2018			2017
Balance of allowance for doubtful accounts, beginning of period/year	$	80,232		$	547,173
Bad debt provision		171,693			346,689
Write-off of receivables		(1,930	)		(813,630	)
Balance of allowance for doubtful accounts, end of period/year	$	249,995		$	80,232

The Company determines the allowance for doubtful accounts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment terms, previous loss history, and the customer’s current ability to pay its obligation. When the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a charge to the allowance to reduce the customer’s related accounts.

Revenue Recognition [Policy Text Block]

g)	Revenue Recognition
	The Company’s revenue is generated from the sale of software license, subscription fees related to the cloud offering, support and maintenance services and professional services. The Company recognizes revenue in accordance with ASC 985-605 “Software Revenue Recognition”.
	Software license revenue is recognized for sales of perpetual licenses.
	Subscription, support and maintenance revenue is generated from recurring fees purchased through the Company’s cloud based offerings, where the customer has no right to take possession of the underlying software at any time and is recognized ratably as the service is delivered.
	Professional and other services include software customization, implementation, training, and dedicated engineering which are recognized as the related service has been performed.

Earnings Per Share [Policy Text Block]

h)

Earnings Per Share

The Company computes net loss per share in accordance with ASC Topics 260 and ASC 260-10. ASC Topics 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options and warrants using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the nine months ended January 31, 2018 and 2017, common share equivalents, consisting of common shares issuable, on exercise or settlement, as applicable, of options, warrants and deferred share units (“DSUs”) of 1,144,172 and 867,309, respectively, were not included in the computation of diluted EPS because the effect was anti-dilutive.

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Significant Accounting Policies (Tables)

9 Months Ended

Jan. 31, 2018

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

		January 31,			April 30,
		2018			2017
Balance of allowance for doubtful accounts, beginning of period/year	$	80,232		$	547,173
Bad debt provision		171,693			346,689
Write-off of receivables		(1,930	)		(813,630	)
Balance of allowance for doubtful accounts, end of period/year	$	249,995		$	80,232

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Derivative Financial Instruments and Risk Management (Tables)

9 Months Ended

12 Months Ended

Jan. 31, 2018

Apr. 30, 2017

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

		Carrying			Fair Value
As at January 31, 2018		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	3,048,418	$	3,048,418	1	N/A

		Carrying			Fair Value
As at April 30, 2017		Amount		Fair Value	Levels	Reference
Cash and cash equivalents	$	2,071,019	$	2,071,019	1	N/A

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Common Stock (Tables)

9 Months Ended

Jan. 31, 2018

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Risk-free interest rate	2.14%	2.10%	2.14%	1.20%
Expected volatility	95.55%	95.17%	95.55%	95.19%
Expected term	3.7 years	3.7 years	3.7 years	3.7 years
Dividend yield	0%	0%	0%	0%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Weighted Average
	Number of		Exercise Price
	Options		per Share
Outstanding at April 30, 2017	396,922		$2.46
Granted	324,000		$2.89
Forfeited/Cancelled	(11,645	)	$2.49
Expired	(30,000	)	$2.50
Exercised	(495	)	$2.46
Outstanding at January 31, 2018	678,782		$2.66
Exercisable at January 31, 2018	242,536		$2.48
Exercisable at April 30, 2017	221,739		$2.49

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

	Number of		Aggregate		Number of		Aggregate
	Options		Intrinsic		Options		Intrinsic
Exercise Price	Outstanding		Value	Expiry Date	Exercisable		Value
$2.03	10,000	$	25,300	December 15, 2021	2,708	$	6,851
$2.40	60,000		129,600	July 15, 2021	22,500		48,600
$2.41	49,500		106,425	December 14, 2020	25,765		55,395
$2.46	25,000		52,500	March 14, 2022	5,208		10,937
$2.50	210,282		433,181	July 25, 2018 to July 17, 2020	186,355		383,891
$2.89	324,000		541,080	December 14, 2022	–		–
January 31, 2018	678,782	$	1,288,086		242,536	$	505,674
April 30, 2017	396,922	$	–		221,739	$	–

Schedule of Nonvested Performance-based Units Activity [Table Text Block]

				Weighted
	Number of			Average Grant
	Options			Date Fair Value
Non-vested options at April 30, 2017	175,183		$	3.49
Granted	324,000		$	1.90
Vested	(59,103	)	$	3.95
Forfeited/Cancelled	(3,834	)	$	2.12
Non-vested options at January 31, 2018	436,246		$	1.94

Schedule of Employee and Non-Employee Service Share-based Compensation Allocation of Recognized Period Costs [Table Text Block]

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Cost of sales	$	11,583	$	23,388	$	39,439	$	77,441
Sales and marketing		17,141		27,906		58,814		147,324
Research and development		11,006		24,563		42,933		82,081
General and administrative		25,630		41,961		97,978		130,747
Total stock-option based compensation		65,360	$	117,818	$	239,164	$	437,593

Schedule of Stockholders' Equity Note, Warrants or Rights, Activity [Table Text Block]

	Number of			Weighted Average
	Warrants			Exercise Price	Expiry Dates
Warrants at April 30, 2017	146,500		$	7.50	September 4, 2017
Granted	–			–	–
Exercised	–			–	–
Expired	(146,500	)	$	7.50	September 4, 2017
Warrants at January 31, 2018	–			–

Schedule of Stockholders Equity Deferred Share Unit Plan [Table Text Block]

			Weighted
			Average Grant
			Date Fair
	Number of DSUs		Value Per DSU
DSUs outstanding at April 30, 2017	345,392	$	7.85
Granted	119,998	$	2.20
DSUs outstanding at January 31, 2018	465,390	$	6.40

Schedule of Stockholders Equity Non Vested Deferred Share Units [Table Text Block]

				Weighted
				Average Grant
				Date Fair
	Number of DSUs			Value Per DSU
Non-vested DSUs at April 30, 2017	46,217		$	4.58
Granted	119,998		$	2.21
Vested	(101,963	)	$	3.02
Non-vested DSUs at January 31, 2018	64,252		$	2.21

Schedule of Allocation of Share Based Compensation Costs for Deferred Share Units [Table Text Block]

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
Sales and marketing	$	–	$	–	$	–	$	–
Research and development		–		–		–		–
General and administrative		22,564		32,507		255,719		263,922
Total DSU based compensation	$	22,564	$	32,507	$	255,719	$	263,922

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Segmented Information (Tables)

9 Months Ended

Jan. 31, 2018

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2018		2017		2018		2017
North America	$	1,648,430	$	1,469,552	$	5,158,026	$	4,904,939
EMEA		1,127,537		704,788		3,304,887		2,394,724
Asia Pacific		216,479		172,140		744,693		642,262
Latin America		91,457		208,879		399,668		390,541
	$	3,083,903	$	2,555,359	$	9,607,274	$	8,332,466

Schedule of Long Lived Assets by Geographical Areas [Table Text Block]

		As at
		January 31, 2018		April 30, 2017
Canada	$	7,429,394	$	6,731,644
United States		50,825		34,761
	$	7,480,219	$	6,766,405

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Customer A	17%	10%	6%	8%

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Commitments (Tables)

9 Months Ended

Jan. 31, 2018

Schedule of Agreements by Year [Table Text Block]

		Office Leases –		Office Leases –		Total Office
		Related Party		Unrelated Party		Leases
2018		29,256		144,676		173,932
2019		117,022		579,893		696,915
2020		5,506		284,746		290,252
2021		−		6,092		6,092
	$	151,784	$	1,015,407	$	1,167,191

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Earnings (loss) per common share (EPS) (Tables)

9 Months Ended

Jan. 31, 2018

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2018			2017			2018			2017
Net loss	$	(778,343	)	$	(682,140	)	$	(1,772,042	)	$	(1,610,071	)
Weighted average common shares outstanding – basic and diluted		5,539,352			4,789,675			5,354,690			4,631,472
Basic and diluted EPS	$	(0.14	)	$	(0.14	)	$	(0.33	)	$	(0.35	)

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Significant Accounting Policies (Narrative) (Details)	9 Months Ended
	Jan. 31, 2018 USD ($)	Jan. 31, 2018 CAD ($)
Significant Accounting Policies 1	$ 6,339,717
Significant Accounting Policies 2		$ 6,704,947
Significant Accounting Policies 3	2,083,960
Significant Accounting Policies 4		2,083,752
Significant Accounting Policies 5	5,450,605
Significant Accounting Policies 6		6,704,947
Significant Accounting Policies 7	4,914,029
Significant Accounting Policies 8	1,693,655
Significant Accounting Policies 9		$ 2,083,414
Significant Accounting Policies 10	$ 1,526,926
Significant Accounting Policies 11	1,144,172	1,144,172
Significant Accounting Policies 12	867,309	867,309

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Related Party Transactions (Narrative) (Details)	9 Months Ended
	Jan. 31, 2018 USD ($) $ / shares shares
Related Party Transactions 1	$ 21,911
Related Party Transactions 2	65,277
Related Party Transactions 3	19,750
Related Party Transactions 4	$ 59,250
Related Party Transactions 5	8,007,004
Related Party Transactions 6	8,007,004
Related Party Transactions 7	$ 8,258
Related Party Transactions 8	24,820
Related Party Transactions 9	7,671
Related Party Transactions 10	$ 23,013
Related Party Transactions 11 | shares	427,500
Related Party Transactions 12 | $ / shares	$ 4.01
Related Party Transactions 13	$ 1,714,275
Related Party Transactions 14	$ 14,956
Related Party Transactions 15 | shares	125,000
Related Party Transactions 16 | shares	125,000
Related Party Transactions 17 | shares	539,240
Related Party Transactions 18 | $ / shares	$ 2.20
Related Party Transactions 19	$ 1,186,328
Related Party Transactions 20	$ 19,832
Related Party Transactions 21 | shares	144,357
Related Party Transactions 22 | shares	180,446
Related Party Transactions 23 | shares	11,368
Related Party Transactions 24 | shares	4,511
Related Party Transactions 25 | shares	4,545
Related Party Transactions 26 | shares	454,097
Related Party Transactions 27 | $ / shares	$ 2.05
Related Party Transactions 28	$ 930,899
Related Party Transactions 29	$ 32,207
Related Party Transactions 30 | shares	198,000
Related Party Transactions 31 | shares	12,195

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Derivative Financial Instruments and Risk Management (Narrative) (Details)	9 Months Ended
	Jan. 31, 2018
Derivative Financial Instruments And Risk Management 1	3

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Common Stock (Narrative) (Details) - 9 months ended Jan. 31, 2018	USD ($) mo yr $ / shares shares	CAD ($) mo yr shares
Common Stock 1 | shares	427,500	427,500
Common Stock 2 | $ / shares	$ 4.01
Common Stock 3	$ 1,714,275
Common Stock 4	$ 48,325
Common Stock 5 | shares	14,000	14,000
Common Stock 6 | shares	539,240	539,240
Common Stock 7 | $ / shares	$ 2.20
Common Stock 8	$ 1,186,328
Common Stock 9	$ 19,832
Common Stock 10 | shares	454,097	454,097
Common Stock 11 | $ / shares	$ 2.05
Common Stock 12	$ 930,899
Common Stock 13	$ 32,206
Common Stock 14 | shares	25,000	25,000
Common Stock 15 | shares	23,500	23,500
Common Stock 16 | shares	10,000	10,000
Common Stock 17 | shares	10,000	10,000
Common Stock 18 | shares	3,500	3,500
Common Stock 19	12.50%	12.50%
Common Stock 20 | mo	42	42
Common Stock 21	986,000	986,000
Common Stock 22	15.00%	15.00%
Common Stock 23	$ 1.90
Common Stock 24	1.90
Common Stock 25	2.03
Common Stock 26	$ 2.36
Common Stock 27 | $ / shares	$ 4.56
Common Stock 28	$ 1.93
Common Stock 29	242,536	242,536
Common Stock 30	0	0
Common Stock 31	$ 1,742
Common Stock 32	0
Common Stock 33	60,066
Common Stock 34	233,748
Common Stock 35	108,194
Common Stock 36	324,422
Common Stock 37	$ 626,925
Common Stock 38 | yr	3.5	3.5
Common Stock 39	6.00%	6.00%
Common Stock 40	50.00%	50.00%
Common Stock 41	3.00%	3.00%
Common Stock 42	$ 36,210
Common Stock 43	$ 26,461
Common Stock 44 | shares	12,832	12,832
Common Stock 45 | shares	35,103	35,103
Common Stock 46 | shares	22,226	22,226
Common Stock 47 | shares	120,000	120,000
Common Stock 48 | shares	63,977	63,977
Common Stock 49 | shares	258,613	258,613
Common Stock 50 | shares	73,500	73,500
Common Stock 51	$ 2.18
Common Stock 52		$ 2.81
Common Stock 53	$ 160,230
Common Stock 54 | shares	73,500	73,500
Common Stock 55	5.00%	5.00%
Common Stock 56 | shares	500,000	500,000
Common Stock 57 | shares	700,000	700,000
Common Stock 58	119,998	119,998
Common Stock 59	90,453	90,453
Common Stock 60	40,129	40,129
Common Stock 61	79,869	79,869
Common Stock 62 | shares	210,597	210,597
Common Stock 63	$ 92,142
Common Stock 64	$ 142,688
Common Stock 65 | yr	2.03	2.03
Common Stock 66 | yr	1.54	1.54

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Segmented Information (Narrative) (Details)	9 Months Ended
	Jan. 31, 2018 USD ($)
Segmented Information 1	$ 620,000
Segmented Information 2	$ 280,617

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Earnings (loss) per common share (EPS) (Narrative) (Details)	9 Months Ended
	Jan. 31, 2018
Earnings (loss) Per Common Share (eps) 1	1,144,172
Earnings (loss) Per Common Share (eps) 2	867,309

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Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jan. 31, 2018	Apr. 30, 2017
Balance of allowance for doubtful accounts, beginning of period/year	$ 80,232	$ 547,173
Bad debt provision	171,693	346,689
Write-off of receivables	(1,930)	(813,630)
Balance of allowance for doubtful accounts, end of period/year	$ 249,995	$ 80,232

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Fair Value, Assets Measured on Recurring Basis (Details) - USD ($)	Jan. 31, 2018	Apr. 30, 2017	Jan. 31, 2017	Apr. 30, 2016
Cash and cash equivalents - Carrying Amount	$ 3,048,418	$ 2,071,019	$ 2,521,698	$ 2,159,738
Cash and cash equivalents - Fair Value	$ 3,048,418	$ 2,071,019

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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Risk-free interest rate	2.14%	2.10%	2.14%	1.20%
Expected volatility	95.55%	95.17%	95.55%	95.19%
Expected term	3 years 8 months 12 days	3 years 8 months 12 days	3 years 8 months 12 days	3 years 8 months 12 days
Dividend yield	0.00%	0.00%	0.00%	0.00%

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Schedule of Share-based Compensation, Stock Options, Activity (Details)	9 Months Ended
	Jan. 31, 2018 $ / shares shares
Number of Options Outstanding at the beginning of period | shares	396,922
Weighted Average Exercise Price per Share of Options Oustanding at the beginning of period | $ / shares	$ 2.46
Number of Options Granted | shares	324,000
Weighted Average Exercise Price per Share of Options Granted | $ / shares	$ 2.89
Number of Options Foreited/Cancelled | shares	(11,645)
Weighted Average Exercise Price per Share of Options Forfeited/Cancelled | $ / shares	$ 2.49
Number of Options Expired | shares	(30,000)
Weighted Average Exercise Price per Share of Options Expired | $ / shares	$ 2.50
Number of Options Exercised | shares	(495)
Weighted Average Exercise Price per Share of Options Exercised | $ / shares	$ 2.46
Number of Options Outstanding at the end of period | shares	678,782
Weighted Average Exercise Price per Share of Options Outstanding at end of period | $ / shares	$ 2.66
Number of Options Exercisable at the end of period | shares	242,536
Weighted Average Exercise Price per Share of Options Exercisable at end of period | $ / shares	$ 2.48
Number of Options Exercisable at the beginning of period | shares	221,739
Weighted Average Exercise Price per Share of Options Exercisable at beginning of period | $ / shares	$ 2.49

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Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Details) - USD ($)	Jan. 31, 2018	Apr. 30, 2017
Exercise Price	$ 2.66	$ 2.46
Number of Options Outstanding	678,782	396,922
Aggregate Intrinsic Value of Options Outstanding	$ 1,288,086	$ 0
Number of Options Exercisable	242,536	221,739
Aggregate Intrinsic Value of Options Exercisable	$ 505,674	$ 0
Exercise Price Range 1 [Member]
Exercise Price	$ 2.03
Number of Options Outstanding	10,000
Aggregate Intrinsic Value of Options Outstanding	$ 25,300
Number of Options Exercisable	2,708
Aggregate Intrinsic Value of Options Exercisable	$ 6,851
Exercise Price Range 2 [Member]
Exercise Price	$ 2.40
Number of Options Outstanding	60,000
Aggregate Intrinsic Value of Options Outstanding	$ 129,600
Number of Options Exercisable	22,500
Aggregate Intrinsic Value of Options Exercisable	$ 48,600
Exercise Price Range 3 [Member]
Exercise Price	$ 2.41
Number of Options Outstanding	49,500
Aggregate Intrinsic Value of Options Outstanding	$ 106,425
Number of Options Exercisable	25,765
Aggregate Intrinsic Value of Options Exercisable	$ 55,395
Exercise Price Range 4 [Member]
Exercise Price	$ 2.46
Number of Options Outstanding	25,000
Aggregate Intrinsic Value of Options Outstanding	$ 52,500
Number of Options Exercisable	5,208
Aggregate Intrinsic Value of Options Exercisable	$ 10,937
Exercise Price Range 5 [Member]
Exercise Price	$ 2.50
Number of Options Outstanding	210,282
Aggregate Intrinsic Value of Options Outstanding	$ 433,181
Number of Options Exercisable	186,355
Aggregate Intrinsic Value of Options Exercisable	$ 383,891
Exercise Price Range 6 [Member]
Exercise Price	$ 2.89
Number of Options Outstanding	324,000
Aggregate Intrinsic Value of Options Outstanding	$ 541,080
Number of Options Exercisable	0
Aggregate Intrinsic Value of Options Exercisable	$ 0

XML

Schedule of Nonvested Performance-based Units Activity (Details)	9 Months Ended
	Jan. 31, 2018 USD ($) shares
Non-Vested Options Outstanding, beginning of period | shares	175,183
Weighted Average Grant Date Fair Value of Non-Vested Options Outstanding, beginning of period | $	$ 3.49
Non-Vested Options Granted During Period | shares	324,000
Weighted Average Grant Date Fair Value of Options Granted During Period | $	$ 1.90
Options Vested During Period Number | shares	(59,103)
Weighted Average Grant Date Fair Value of Options Vested During Period | $	$ 3.95
Non-Vested Options Forfeited or Cancelled During Period | shares	(3,834)
Weighted Average Grant Date Fair Value of Non-Vested Options Forfeited Or Cancelled During Period | $	$ 2.12
Non-Vested Options Outstanding, end of period | shares	436,246
Weighted Average Grant Date Fair Value of Non-Vested Options Outstanding, end of period | $	$ 1.94

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Schedule of Employee and Non-Employee Service Share-based Compensation Allocation of Recognized Period Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Allocated Share-based Compensation Expense	$ 65,360	$ 117,818	$ 239,164	$ 437,593
Cost of sales [Member]
Allocated Share-based Compensation Expense	11,583	23,388	39,439	77,441
Sales and marketing [Member]
Allocated Share-based Compensation Expense	17,141	27,906	58,814	147,324
Research and development [Member]
Allocated Share-based Compensation Expense	11,006	24,563	42,933	82,081
General and administrative [Member]
Allocated Share-based Compensation Expense	$ 25,630	$ 41,961	$ 97,978	$ 130,747

XML

Schedule of Stockholders' Equity Note, Warrants or Rights, Activity (Details)	9 Months Ended
	Jan. 31, 2018 $ / shares shares
Class of Warrant or Right, Outstanding, Beginning of Period | shares	146,500
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price, Beginning of Period | $ / shares	$ 7.50
Class of Warrant or Right, Grants in Period, Net of Forfeitures | shares	0
Class of Warrant or Right, Grants in Period, Weighted Average Exercise Price | $ / shares	$ 0
Class of Warrant or Right, Exercises in Period | shares	0
Class of Warrant or Right, Exercises in Period, Weighted Average Exercise Price | $ / shares	$ 0
Class of Warrant or Right, Expirations in Period | shares	(146,500)
Class of Warrant or Right, Expirations in Period, Weighted Average Exercise Price | $ / shares	$ 7.50
Class of Warrant or Right, Outstanding, End of Period | shares	0
Class of Warrant or Right, Outstanding, Weighted Average Exercise Price, End of Period | $ / shares	$ 0

XML

Schedule of Stockholders Equity Deferred Share Unit Plan (Details)	9 Months Ended
	Jan. 31, 2018 USD ($) shares
Deferred Share Units Outstanding, beginning of period | shares	345,392
Deferred Share Units Outstanding Weighted Average Grant Date Fair Value, beginning of period	$ 7.85
Deferred Share Units Granted During Period | shares	119,998
Deferred Share Units Granted During Period Weighted Average Grant Date Fair Value	$ 2.20
Deferred Share Units Outstanding, end of period	465,390
Deferred Share Units Outstanding Weighted Average Grant Date Fair Value, end of period	$ 6.40

XML

Schedule of Stockholders Equity Non Vested Deferred Share Units (Details)	9 Months Ended
	Jan. 31, 2018 USD ($) shares
Non-Vested Deferred Share Units Outstanding, beginning of period | shares	46,217
Common Stock Schedule Of Stockholders Equity Non Vested Deferred Share Units 4	2.21
Non-Vested Deferred Share Units Outstanding Weighted Average Grant Date Fair Value, beginning of period | $	$ 4.58
Deferred Share Units Granted During Period | shares	119,998
Deferred Share Units Granted During Period Weighted Average Grant Date Fair Value | $	$ 2.20
Deferred Share Units Vested During Period | shares	(101,963)
Deferred Share Units Vested During Period Weighted Average Grant Date Fair Value | $	$ 3.02
Non-Vested Deferred Share Units Outstanding, end of period | shares	64,252
Non-Vested Deferred Share Units Outstanding Weighted Average Grant Date Fair Value, end of period | $	$ 2.21

XML

Schedule of Allocation of Share Based Compensation Costs for Deferred Share Units (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Deferred Compensation, Allocated Share-based Compensation Expense	$ 22,564	$ 32,507	$ 255,719	$ 263,922
Cost of sales [Member]
Deferred Compensation, Allocated Share-based Compensation Expense	0	0	0	0
Research and development [Member]
Deferred Compensation, Allocated Share-based Compensation Expense	0	0	0	0
General and administrative [Member]
Deferred Compensation, Allocated Share-based Compensation Expense	$ 22,564	$ 32,507	$ 255,719	$ 263,922

XML

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Revenues	$ 3,083,903	$ 2,555,359	$ 9,607,274	$ 8,332,466
North America [Member]
Revenues	1,648,430	1,469,552	5,158,026	4,904,939
EMEA [Member]
Revenues	1,127,537	704,788	3,304,887	2,394,724
Asia Pacific [Member]
Revenues	216,479	172,140	744,693	642,262
Latin America [Member]
Revenues	$ 91,457	$ 208,879	$ 399,668	$ 390,541

XML

Schedule of Long Lived Assets by Geographical Areas (Details) - USD ($)	Jan. 31, 2018	Apr. 30, 2017
Long-lived assets	$ 7,480,219	$ 6,766,405
Canada
Long-lived assets	7,429,394	6,731,644
United States
Long-lived assets	$ 50,825	$ 34,761

XML

Schedule of Revenue by Major Customers by Reporting Segments (Details)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Customer A [Member]
Concentration Risk, Percentage	17.00%	10.00%	6.00%	8.00%

XML

Schedule of Agreements by Year (Details)	Jan. 31, 2018 USD ($)
Office Leases - Related party [Member]
Commitment, Due in Current Year	$ 29,256
Commitment, Due in Second Year	117,022
Commitment, Due in Third Year	5,506
Commitment, Due in Fourth Year	0
Commitment Total	151,784
Office Leases - Unrelated Party [Member]
Commitment, Due in Current Year	144,676
Commitment, Due in Second Year	579,893
Commitment, Due in Third Year	284,746
Commitment, Due in Fourth Year	6,092
Commitment Total	1,015,407
Total Office Leases [Member]
Commitment, Due in Current Year	173,932
Commitment, Due in Second Year	696,915
Commitment, Due in Third Year	290,252
Commitment, Due in Fourth Year	6,092
Commitment Total	$ 0

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Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Net income (loss)	$ (778,343)	$ (682,140)	$ (1,772,042)	$ (1,610,071)
Weighted average common shares outstanding basic and diluted	5,539,352	4,789,675	5,354,690	4,631,472
Basic and diluted EPS	$ (0.14)	$ (0.14)	$ (0.33)	$ (0.35)