Press Release

Ottawa, Ontario – August 12, 2008 - Espial ® Group Inc. ("Espial" or the "Company"), (TSX: ESP ), a leader in the delivery of TV software, today announced its second quarter financial results for the three-month period ended June 30, 2008.

Q2 HIGHLIGHTS:

•  Announced acquisition of Kasenna, a leading Video on Demand software company

•  Signed a global software and distribution agreement with Motorola

•  Announced appointment of cable executive, Michael Lee, from Rogers Communications to the Espial board of directors

For the three-month period ended June 30, 2008 the Company reported revenues of $1,827,475 compared to revenues of $2,007,947 for the three months ended June 30, 2007. For the three-month period, net loss was $1,365,135, or $0.15 per share, compared to a net loss of $4,758,508 last year, or $1.79 per share.

“We are pleased with the significant progress we've made and momentum we've gained in Q2. The acquisition of Kasenna positions us as a leading supplier of TV software to the telco, cable and hospitality industries. The signing of the software license and distribution agreement with Motorola provides a new, tier 1 channel for our products and services” noted Jaison Dolvane, President and CEO of Espial. “It's also noteworthy that the addition of Michael Lee, Chief Strategy Officer for Rogers Communications, bolsters the experience of our board of directors with the insight and expertise of a seasoned cable executive."

“During the quarter we solidified our position in the industry with the Kasenna acquisition and significantly broadened our customer base. We also made strong progress in developing our pipeline directly and via channels. Through these, we will continue to strengthen the foundation of our business to leverage future industry growth” added Mr. Dolvane. “Our key objectives for the remainder of 2008 are to successfully integrate Kasenna operations, deploy our key customers for the Evo TV Service Platform, improve channel productivity, and to secure 2 new major customers for our high value products.

Q2 Financial Results

Second quarter revenues were $1,827,475 compared with revenues of $2,027,947 in the same period a year ago. Second quarter software license and royalty revenues were $1,243,644 compared to software license and royalty revenues of $1,424,957 in the second quarter of fiscal 2007. Professional services for the second quarters of 2008 and 2007 were $240,702 and $190,199 respectively. Maintenance and support revenues for the second quarter were $343,129 compared to $412,792 last year.

Gross margins for the second quarter of fiscal 2008 were 71% compared with 72% in the second quarter of fiscal 2007.

Operating expenses in the second quarter of fiscal 2008 were $2,736,182 compared to $5,444,142 in the second quarter of fiscal 2007.

Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) for the second quarter of fiscal 2008 was a loss of $1,412,930 compared to a loss of $1,802,831 in fiscal 2007.

Net loss in the second quarter was $1,365,135 compared to a loss of $4,758,508 last year.

Cash and cash equivalents at June 30, 2008 was $13,821,950.

The Company will be hosting a conference call to discuss the second quarter financial results on August 12, 2008 at 5:00 PM Eastern Standard Time (EST). The phone number to join the results discussion is:

•  Toll line - 416 644 3422

•  Toll free line - 800-814-4860

The playback for the call will be available until Friday, September 12, 2008 at the following numbers and passcode:

o Toll line: 416-640-1917 – passcode: 21280124#

o Toll free line: 877-289-8525 – passcode: 21280124#

About Espial (www.espial.com)

Espial provides intelligent and open TV software to service providers in the cable, telecommunications and hospitality industries. Its middleware and video-on-demand solutions provide superior service delivery, advanced service innovation tools and the ability to serve a wide range of market segments - including over-the-top, IPTV, hybrid IP, multi-dwelling unit and enterprise. With over 2.5 million licenses of its patented software technology in use, Espial is a leading supplier of TV software. Espial is headquartered in Ottawa, Canada. For more information please visit the Espial website @ www.espial.com.

Forward Looking Statement

This press release contains information that is forward looking information with respect to Espial within the meaning of Section 138.4(9) of the Ontario Securities Act (forward looking statements) and other applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of theses terms or other similar expressions concerning matters that are not historical facts. In particular, statements about the benefits and synergies of the Kasenna acquisition transaction, future opportunities for the company and products and any other statements regarding Espial's future expectations, beliefs, goals or prospects are or involve forward-looking information.

Forward-looking information is based on certain factors and assumptions. While the company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information, by its nature necessarily involves risks and uncertainties, including Espial's ability to effectively integrate Kasenna operations and effectively develop its distribution channels, and generate increased demand for its products. Additional risks and uncertainties affecting Espial can be found in Espial's Annual Report for the fiscal year ended December 31, 2007 and in its most recent quarterly report filed on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. Espial assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

Non-GAAP Financial Measures

In addition to our GAAP results, Espial discloses a “ Earnings before interest, foreign exchange, taxes, stock compensation, depreciation and amortization (EBITDA) ” , which is referred to as a “Non-GAAP Measure” . Because the Non-GAAP Measure is not calculated in accordance with GAAP, it is used by management as a supplement to, and not an alternative to, or superior to, financial measures calculated in accordance with GAAP.  

Inquiries from financial press or analysts:

ESPIAL GROUP INC.

Consolidated Balance Sheet

(in Canadian dollars)

ESPIAL GROUP INC.

Consolidated Statement of Operations and Comprehensive Loss

(in Canadian dollars except share data)