OSI Geospatial Inc.
OTC Bulletin Board : OSIIF

OSI Geospatial Inc.

November 02, 2006 11:30 ET

OSI Geospatial Selected for UK Royal Navy Prime Contract Valued at US$29 Million

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 2, 2006) - OSI Geospatial Inc. (TSX:OSI)(OTCBB:OSIIF) announced today that its international systems operations has been selected as the preferred bidder for a prime contract by the United Kingdom Ministry of Defence for the provision of warship automatic identification systems (W-AIS). The contract is valued at approximately US$29 million, including all options. The terms of the contract set out initial systems purchases totaling approximately US$6.2 million, a four-year support and maintenance program of approximately US$2.2 million and a 26 year long-term support and maintenance program of approximately US$14.5 million. In addition, the contract provides options for further systems totaling approximately $1.6 million, a four year support and maintenance program of approximately US$600,000 and a 26 year long-term support program totaling approximately US$3.6 million. The company expects to sign the final contract before the end of November 2006.

W-AIS systems are capable of sending ship information such as identification, position, course and speed to other ships and to shore based facilities. By providing AIS data on the bridge as well as in the operations room, customers experience enhanced situational awareness, added effectiveness to collision avoidance and increased surveillance capability.

"This award delivers on our very important strategic goal to secure a significant prime contract in the UK. We continue to strengthen and diversify our product offering and expand our presence from the bridge of naval warships into the operations room," said Ken Kirkpatrick, president and CEO of OSI Geospatial. "This contract is another example of how we are leveraging the proven and world-leading capabilities of our core navigation technology to develop innovative new systems that provide enhanced situational awareness to our customers. Today's win highlights our technology leadership in the military naval market and expands on our solid relationship with the Royal Navy."

About OSI Geospatial

OSI Geospatial Inc. delivers advanced systems and software to address the growing need for enhanced situational awareness in command, control, communications, and intelligence applications. By providing essential tactical and geospatial information, the company's systems and software help decision-makers know the precise location of mission operations across all military forces while integrating information with allies. OSI Geospatial systems are in use by military, government, and commercial customers around the world. The company is publicly traded on the Toronto Stock Exchange (OSI) and the Over the Counter Bulletin Board (OSIIF). For additional information please visit www.osigeospatial.com.

Forward-Looking Statements

Certain statements made in this news release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 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 the Company's business include 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 United States Securities and Exchange Commission ("SEC") and the Canadian Securities Administrators ("CSA"), as well as other periodic reports filed with the SEC and the CSA. The Company does not undertake any obligation to update the forward-looking statements.

Copyright (C) 2006 OSI Geospatial Inc. and its affiliated or related companies. ECPINS and COP-IDS are registered trademarks of Offshore Systems Ltd., 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.

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