Press Release

OTTAWA, ONTARIO--(Aug. 8, 2007) - Espial Group Inc. ("Espial" or the "Company"), (TSX:ESP), a leader in the delivery of IPTV middleware and applications today announced its second quarter financial results for the three-month and six-month periods ended June 30, 2007.

For the three-month period ended June 30, 2007, the Company reported revenues of $2.0 million versus revenues of $2.7 million during the same period last year, and $2.2 million during the first quarter of 2007. Revenues during the second quarter were affected by delays associated with the completion of a number of new client contracts. Gross margin during the quarter amounted to $1.4 million compared to $2.0 million during the corresponding period in 2006. For the three-month period, net loss excluding a one-time non-cash expense of $4.1 million for stock-based compensation associated with our Initial Public Offering amounted to $0.7 million or $0.24 per share and the Company's net loss was $4.8 million or $1.79 per share including this charge. This compares with a profit of $0.1 million or $0.35 per share during the same period last year.

For the six-month period ended June 30, 2007, the Company reported revenues of $4.2 million versus $4.4 million during the same period last year. Gross margin during the six-month period amounted to $3.0 million, the same as in this period a year ago. Net loss excluding the one-time charge for stock-based compensation expense was $2.6 million or $1.65 per share versus $2.3 million or $5.41 per share during the corresponding period last year. Including the one-time stock-based compensation charge, Net Loss for the six months was $6.7 million or $4.31 per share.

"Espial's focus is to expand its product offering, increase sales coverage in target markets, and grow market share," stated Jaison Dolvane, President and Chief Executive Officer of Espial. "In the first half of 2007, we made substantial progress in terms of customer acquisition and channel partnering. However, the process of closing certain significant new contracts, and completing the related customer integrations is taking longer than we have previously experienced. Industry consolidation in Europe and Japan has also delayed the deployments of some of our existing customers. We believe both of these factors can be expected from an industry at the early stages of its expected growth cycle. Nonetheless, we remain optimistic about our business and the underlying drivers in the IPTV industry. Our progress in this past quarter positions us well to secure key customer and distribution contracts and solidify the foundation for our future growth."

Q2 HIGHLIGHTS:

- An Evo IPTV Service Platform design win, for our carrier grade server and client products, with a new US-based service provider looking to offer an IPTV service to the multiple dwelling unit (MDU) market;

- Two new Evo Client design wins with Asian set-top box vendors, as potential channels into various Asian markets;

- Received Frost and Sullivan award as the Most Entrepreneurial IPTV Company in North America; and

- Successful IPO raising net proceeds (after commissions) of $26.9 million closed in June.

The Company will be hosting a conference call to discuss the second quarter financial results on August 8, 2007 at 10:00AM Eastern Standard Time (EST).

About Espial

Espial provides IPTV middleware and applications that enable superior quality of experience, fast application performance, carrier-grade scalability, and open extensibility, all at a lower total cost of ownership. Espial's Evo ® IPTV Service Platform, which can be purchased as modular components or as part of a pre-integrated client-server solution, includes Evo Client, Evo Server, Evo Browser, Evo BML Browser, Evo Future-Proof Framework TM (FPF), Evo SkinTones TM and applications such as Electronic Program Guide, Video on Demand, Digital Video Recorder, Content Portal, Games, and Triple Play.

Forward Looking Statement

This press release contains statements that are forward-looking in nature. Statements preceded by the words believe, expect, anticipate, plan, intend, continue, estimate, may, will, and similar expressions are forward-looking statements. Forward-looking statements are based on Espial's beliefs and assumptions based on information available at the time the assumption was made. Forward-looking statements relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, new services, market forces, commitments and technological developments, relating to the Espial. By its nature, such forward-looking information is subject to various risks and uncertainties which could cause Espial's actual results and experience to differ materially from the anticipated results or other expectations expressed. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this document, and Espial undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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