OSI Geospatial Inc.

OSI Geospatial Reports 2008 Second Quarter Results and Declares Partial Preferred Share Dividend Payment

Ottawa, Canada- OSI Geospatial Inc. (TSX: OSI; OTCBB: OSIIF) today announced its financial results for the quarter and six months ending May 31, 2008, reported in US dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

For the second quarter of 2008, OSI Geospatial Inc. reported revenue of $6.5 million, an increase of 6.4% from the $6.1 million reported in the second quarter of 2007. Specifically, land and air systems revenue increased 9.3% to $2.5 million compared with $2.3 million, marine systems revenue decreased slightly to $2.3 million from $2.5 million. Mapping revenue increased 26.5% to $1.7 million from $1.4 million reported in Q2 2007. For the six months ending May 31, 2008, the company reported revenue of $12.3 million, an increase of 27% from the $9.7 million reported in the same period of 2007.

For the second quarter of 2008, the Company reported a net loss of $1.4 million before taxes and $1.1 million after taxes compared with a net loss of $446,000 before taxes and a $366,000 after taxes in the same quarter of 2007. The net loss attributable to common shareholders was $1.5 million or $0.03 per share, compared to the net loss of $748,000 or $0.02 per share in 2007. For the six months ending May 31, 2008, the company reported a net loss of $2.0 million before taxes and a $1.7 million loss after taxes compared to a $2.4 million loss before and after taxes in the same period of 2007.

The Company has decided, in accordance with the Company’s Articles of Incorporation and in light of current market conditions, to declare a partial dividend payment for its Class B Series 2 Preferred Shares and, thereby, preserve its financial resources. The Company will pay a dividend of $0.0175 for each preferred share for the semi-annual payment due on May 31, 2008.The payment of future dividends will be evaluated on a semi-annual basis by the Company.

Announced a $10 Million Contract with U.S. Army to provide land C2 technology and services
Signed contracts with the U.S. Army valued at $1.5 million
Announced a contract valued at $1.6 million to provide U.S. military advanced training technology
Signed a $925,000 Simulation Based Training Contract with U.S. Army
Closed contracts with the Australian Navy valued at more than $1.3 million
Awarded first Defense Research and Development Canada (DRDC) contract to develop Counter-IED technology

“In the second quarter we continued to experience delays in closing key contracts, but we are optimistic that we will achieve solid progress in our third and fourth quarter,” said Ken Kirkpatrick, president and CEO of OSI Geospatial. “The company was successful in closing more than $16 million in new contracts in the second quarter; including a $10 million contract with the US Army to provide our land-based command and control technology. We are confident that this win will lead to significant future business for the company in the U.S. and around the world.”

OSI Geospatial will present the results from the 2008 first quarter at 5:00PM Eastern Time (2:00 PM Pacific Time), Wednesday, July 9, 2008. To listen to the conference call live by telephone, dial +1-800-319-4610 for participants in North America or +1-604-638-5340 for Vancouver and international participants approximately ten minutes before the call is scheduled to begin. A telephone playback will be available beginning approximately one hour after the call. Dial +1-800-319-6413 for North American callers or +1-604-638-9010 for Vancouver and international callers. Enter access code 7826#. A live and replay version of the webcast can be accessed on the company’s investor website at www.osigeospatial.com.

About OSI Geospatial
OSI Geospatial Inc. delivers advanced geospatial systems and software that enable shared real-time situational awareness for military, safety and security applications. Our products and services enable our customers to integrate and visualize live data with any combination of sensor data, imagery, maps and charts. This capability provides our customers with enhanced operational performance, safety and security through shared real-time situational awareness. OSI Geospatial systems and software are in use by military, government, and commercial customers around the world. The company is publicly traded in Canada (OSI) and the U.S. (OSIIF). For additional information please visit www.osigeospatial.com

Forward-Looking Statements
Certain statements made in this news release, including statements regarding the perceived benefits of deregistration and future trading and business activity, are not based on historical information are forward-looking statements and are made pursuant to the safe harbor provisions of Section 21E of the Exchange Act and Section 138.4(9) of the Ontario Securities Act. These forward-looking statements are subject to risks and uncertainties. Actual results may differ from these projections. The risks associated with these statements and the Company's business include market volatility and changes in market preference; risks related to its reliance on international government contracts; the number of large customer transactions and the related lengthy sales cycles in executing those opportunities; uncertainties associated with competitive bidding processes and contract negotiations; actions by government authorities; the effects of general economic and political conditions; changing foreign exchange rates; and challenges related to the company's ability to introduce, develop and implement new products and enhancements to existing products that respond to customer requirements in a changing, complex, technological market. A complete discussion of the company’s risk factors is presented in the company’s most recent annual reports, filed with the SEC and the CSA, as well as other periodic reports filed with the SEC and the CSA. Except required by law, the Company does not undertake any obligation to update the forward-looking statements.

Copyright © 2008 OSI Geospatial Inc. and its affiliated or related companies. ECPINS and COP-IDS are registered trademarks of Offshore Systems Ltd., an OSI Geospatial company. iGEN and C3CORE are registered trademarks of CHI Systems Inc., an OSI Geospatial company. Other company brand, product and service names are for identification purposes only and may be either trademarks, service marks or registered trademarks of their respective owners. Data subject to change without notice.