UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

~~July 14~~March 20, ~~2006~~2007

~~OFFSHORE~~OSI ~~SYSTEMS~~GEOSPATIAL ~~INTERNATIONAL LTD~~INC.

(Translation of registrant’s name into English)

107-930 West 1^st Street.
North Vancouver, BC V7P 3N4, Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

~~News~~ OSI ~~Release~~Geospatial Inc.

~~FOR~~NOTICE ~~IMMEDIATE~~OF 2007 ~~RELEASE~~ANNUAL AND SPECIAL GENERAL MEETING

~~OSI~~INFORMATION ~~Geospatial Reports 2006 Second Quarter Financial Results~~CIRCULAR

~~July~~March 1219, ~~2006~~2007 ~~Vancouver, Canada~~

~~OSI~~TO ~~Geospatial~~OUR ~~Inc. (TSX: OSI; OTCBB: OSIIF) announced today its financial results for the~~SHAREHOLDERS second fiscal quarter ended May 31, 2006. Effective the second quarter of 2006, the company has changed its reporting currency to U.S. dollars from Canadian dollars. All amounts are reported in U.S. dollars and in accordance with U.S. GAAP, unless otherwise indicated.

~~For~~I ~~the~~am ~~second~~pleased ~~quarter~~to ofinvite ~~2006,~~you ~~OSI~~to ~~Geospatial~~attend ~~reported~~the ~~revenue~~Annual ofand ~~$6.1 million,~~Special upGeneral ~~from~~Meeting ~~$1.5 million for~~ (the ~~same~~“Meeting”) ~~quarter~~of shareholders inof ~~2005.~~OSI ~~The~~Geospatial $4Inc.~~6 million~~ ~~increase includes $2.4~~(OSI) ~~million~~to inbe ~~land~~held ~~and air~~on ~~systems~~Wednesday, ~~revenue~~April 18, ~~gained~~2007 ~~through~~at ~~the~~1:30 ~~company’s new U~~p.Sm. ~~systems operations. Marine systems~~ ~~revenue~~(Pacific ~~increased~~Time) ~~approximately~~at ~~$1.7 million~~the ~~and~~Metropolitan ~~mapping~~Hotel ~~revenue~~at ~~increased~~645 ~~approximately~~Howe ~~$585~~Street,~~000 compared~~ toVancouver, ~~the~~British ~~prior year’s quarter~~Columbia. ~~The increase in marine systems and mapping revenue reflects~~ ~~contract awards during the period from new and existing customers.~~

~~For~~The ~~the~~attached ~~second~~Notice ~~quarter~~ of ~~2006,~~Annual ~~the~~and ~~company~~Special ~~reported~~General ~~earnings~~Meeting ~~before taxes of $93,983~~ and aInformation ~~net loss~~Circular ~~after~~provide ~~taxes~~ details of ~~$2,137~~the ~~compared~~business to abe ~~net~~conducted ~~loss~~at ~~before~~the ~~taxes of $1~~Meeting.~~2 million~~ ~~and~~A acopy ~~net loss after tax~~ of ~~$1.4 million for~~ the ~~same~~Company’s ~~quarter~~Annual inReport ~~2005. The improvement~~ is ~~attributable to the~~also ~~substantial~~enclosed ~~increase in revenue~~ and ~~higher~~highlights ~~gross~~some ~~profit from an increase in software revenue. The net loss available to common shareholders was $715,055 or $0.02 per share for the second quarter~~ of ~~2006~~ ~~and~~OSI’s ~~includes~~significant ~~approximately~~achievements ~~$525,000~~over ~~for dividends paid to preferred shareholders. This compares to~~ the ~~net~~last ~~loss available to common shareholders of $5.6 million or $0.20 per share in the prior~~ year~~’s quarter~~.

~~“Overall~~Your wevote ~~had~~is aimportant ~~very~~to ~~strong quarter with substantial revenue growth~~us. ~~Contract~~Whether ~~awards~~or ~~were~~not ~~strong at~~you ~~$6.9 million.~~plan ~~Top~~to ~~line~~attend ~~results~~the ~~were solid in all of our businesses. Gross and operating margins rose and our business was profitable before taxes~~Meeting,” ~~said~~please ~~Ken Kirkpatrick~~sign, ~~president~~date and ~~chief~~ ~~executive~~return ~~officer~~the ofenclosed ~~OSI~~proxy ~~Geospatial.~~according ~~“This quarter we demonstrated excellent progress against our goals~~ to ~~grow company revenue, strengthen our leadership in~~ the ~~international~~instructions ~~defense~~on ~~and commercial market, and demonstrate our ability to penetrate~~ the Uform.~~S. defense, homeland security and~~ ~~commercial markets.”~~

~~Second~~I ~~Quarter~~look ~~Highlights~~forward to seeing you at the Meeting on April 18.

~~§ Secured land and air systems contracts totaling $2.7 million with the U.S. Department of Defense § Secured marine systems contracts totaling $2.8 million~~Sincerely, including a $1.8 million contract by L-3 Communications Marine Systems for a U.S. Navy program § Secured mapping contracts totaling $1.4 million, including the company’s first prime contract in California with a mapping project for Stanislaus County

~~OSIGeospatial~~OSI Geospatial Inc. ~~Suite107-930 West 1st StreetNorth Vancouver, BC V7P 3N4 Canada tel +1 604 904 4600| fax +1 604 987 2555www.osigeospatial.com~~

~~News~~ KENNETH ~~Release~~KIRKPATRICK President and Chief Executive Officer

§NOTICE ~~Announced~~OF ~~the~~ANNUAL ~~Royal~~AND ~~Norwegian~~SPECIAL ~~Navy~~GENERAL ~~has~~MEETING ~~selected~~OF the company’s surface and subsurface navigation systems for deployment on its mine warfare vessels and submarines § Launched the simplified voyage data recorder (S-VDR) product for the commercial shipping market that will enable ship operators to benefit from the company’s proven, world-leading navigation technology while meeting newly mandated International Maritime Organization (IMO) carriage requirementsSHAREHOLDERS

~~Outlook~~NOTICE IS HEREBY GIVEN that the 2007 Annual and Special General Meeting (the “Meeting) of the shareholders of OSI GEOSPATIAL INC. (the “Company”) will be held at the Metropolitan Hotel, 645 Howe Street, Vancouver, British Columbia, on Wednesday, April 18, 2007 at 1:30 p.m. (Pacific Time) for the following purposes:

~~“We~~(a) ~~continue~~to receive and consider the report of the directors; (b) to ~~show~~receive ~~steady~~and ~~progress~~consider ~~against~~the ~~all~~financial statements of ~~our~~the ~~goals~~Company for ~~fiscal~~the financial year ended November 30, 2006. ~~Since~~and the ~~last investor~~report ~~conference~~of ~~call~~the weauditors ~~have~~thereon; ~~announced~~(c) ato ~~very~~appoint ~~important~~an ~~contract~~auditor ~~with~~for ~~L-3~~the ~~Communications~~Company ~~Marine Systems~~for ~~which~~the ~~delivers~~ensuing onyear; ~~our~~(d) ~~stated~~to ~~objective~~fix tothe ~~win~~number aof ~~significant~~directors; ~~U.S.~~(e) ~~Navy~~to ~~contract,”~~elect ~~continued Mr. Kirkpatrick.~~directors ~~“We~~for ~~have~~the ~~also~~ensuing ~~expanded~~year; ~~our~~(f) ~~presence~~to inconsider ~~the~~and, ~~commercial~~if ~~maritime~~thought ~~market~~fit, –pass ~~signing our~~an ~~first~~ordinary ~~commercial~~resolution ~~customer~~approving inan ~~Europe~~amended and ~~announcing~~restated ashareholder ~~contract~~rights ~~with~~plan; ~~Teekay~~and ~~Shipping~~(g) to ~~install our~~transact ~~navigation~~such ~~systems~~other onbusiness ~~vessels~~as ~~under~~may ~~construction~~properly come before the Meeting, or any adjournment or adjournments thereof.”

~~Management~~The ~~reiterates~~text ~~revenue~~of ~~guidance~~the ofproposed ~~C$28 million~~ordinary resolution to ~~C$32 million~~approve ~~for~~the ~~fiscal~~amended ~~2006.~~and Inrestated ~~support~~shareholder rights plan of the ~~reporting~~Company ~~currency~~is ~~change~~set ~~from~~out ~~Canadian~~in ~~dollars~~the toaccompanying ~~U.S.~~Information ~~dollars,~~Circular in the ~~company~~section ~~has converted~~entitled ~~its~~“Particulars ~~Canadian~~of ~~dollar~~Matters ~~guidance~~ to ~~US$24 million~~be toActed ~~US$28 million~~Upon”.

~~Management~~The ~~has~~accompanying ~~outlined~~Information Circular provides additional information relating to the ~~following~~matters ~~goals~~to ~~for~~be dealt with at the ~~fiscal~~Meeting ~~year~~and ~~ending~~is ~~November 30~~deemed to form part of this Notice. Copies of any documents to be considered, ~~2006~~approved, ratified and isadopted or authorized at the Meeting will be available for ~~pleased~~inspection at the registered and records office of the Company at Suite 800 – 885 West Georgia Street, Vancouver, British Columbia, V6C 3H1, during normal business hours up to ~~report~~the date of the Meeting, ~~following~~and ~~progress:~~at the Meeting.

1.The ~~Revenue~~directors inof the ~~range~~Company have fixed March 14, 2007 as the record date for the determination of the ~~$24~~shareholders ~~million~~entitled to ~~$28~~receive ~~million~~this Notice.

•Accompanying ~~Reported~~this ~~$9.8~~Notice ~~million~~are inan ~~revenue~~Information ~~for~~Circular, form of proxy, request form respecting financial statements, the ~~first~~Company’s ~~half~~Annual ofReport, ~~fiscal~~which includes the Letter to Shareholders, and other corporate information, the consolidated financial statements for the years ended November 30, 2006 and 2005 with the auditor’s report thereon, and management’s discussion and analysis. The Information Circular contains information relating to the matters to be addressed at the Meeting.

2.A ~~Demonstrate~~shareholder ~~U.S.~~who ~~market~~is ~~penetration~~entitled byto ~~winning~~attend and vote at the Meeting, or an intermediary holding shares on behalf of an unregistered member, is entitled to appoint a ~~significant~~proxy Uto attend and vote in his or her stead.S. ~~Navy~~Any ~~contract~~shareholders who do not expect to attend the Meeting in person are requested to complete, sign and date the enclosed form of proxy or other form of proxy and return same within the time and to the location in accordance with the instructions set out in the form of proxy and Information Circular accompanying this Notice.

•DATED ~~Signed~~at aNorth ~~$1.8~~Vancouver, ~~million~~British ~~contract~~Columbia, ~~with~~this ~~L-3~~14th ~~Communications~~day ~~Marine Systems for the delivery~~ of ~~one~~March, ~~of the company’s command and control products for a U~~2007.~~S. Navy program~~

3.ON ~~Demonstrate~~BEHALF ~~market~~OF ~~development~~THE inBOARD ~~the~~OF ~~company’s~~DIRECTORS ~~existing~~OF OSI ~~customer~~GEOSPATIAL ~~base by securing a significant prime contract from the British Royal Navy~~INC.

• JOHN ~~The company is pursuing several opportunities and expects to meet this goal by the end of the third quarter of 2006~~SENTJENS Secretary

4.Table ~~Expand the company’s customer base by securing one new customer in each~~ of ~~the three defense domains: air, land, and sea~~Contents

• Announced contracts with the U.S. Office of the Naval Research and the Royal Norwegian Navy


PROXY SOLICITATIONS			2
APPOINTMENT OF PROXIES			2
REVOCATION OF PROXIES			2
CHANGES TO PROXY DELIVERY TO BENEFICIAL SHAREHOLDERS			2
ADVICE TO BENEFICIAL SHAREHOLDERS			3
VOTING OF PROXIES			4
VOTING IN PERSON			5
INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON			5
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES			5
ELECTION OF DIRECTORS			5
STATEMENT OF EXECUTIVE COMPENSATION			7
REPORT ON EXECUTIVE COMPENSATION			11
STOCK PERFORMANCE GRAPH			12
COMPENSATION OF DIRECTORS			13
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS			14
CORPORATE GOVERNANCE			14
AUDIT COMMITTEE AND RELATIONSHIP WITH AUDITOR			17
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS			17
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS			17
APPOINTMENT OF AUDITOR			17
MANAGEMENT CONTRACTS			17
PARTICULARS OF MATTERS TO BE ACTED UPON			17
DISCLOSURE RESPECTING SECURITY-BASED COMPENSATION ARRANGEMENTS			23
PARTICULARS OF OTHER MATTERS TO BE ACTED UPON			24
ADDITIONAL INFORMATION			25
BOARD APPROVAL			25
BOARD OF DIRECTORS’ MANDATE			26

5.INFORMATION ~~Accelerate U.S. and international market penetration by signing a teaming agreement with a top-tier defense contractor~~CIRCULAR

•THIS DOCUMENT ~~The~~CONTAINS ~~company~~INFORMATION isAS ~~making~~AT ~~solid~~MARCH ~~progress~~14, ~~towards~~2007. ~~completing~~UNLESSOTHERWISE ~~this~~INDICATED, ~~goal~~ALL AMOUNTS ARE IN CANADIAN DOLLARS.

6.PROXY ~~Diversify into new market sectors by leveraging the company’s core navigation technology in the development of new products~~SOLICITATIONS

•The ~~Launched~~form of proxy accompanying this Information Circular is being solicited on behalf of the management ~~S-VDR~~of ~~product~~OSI GEOSPATIAL INC. (“we”, “us” or the “Company”) for use at the ~~commercial~~Annual ~~maritime~~and ~~market~~Special General Meeting of Shareholders of the Company (and any adjournment thereof) (the “Meeting”) to be held on Wednesday, April 18, 2007 at the time and place and for the purposes set out in the accompanying Notice of Meeting.

~~Conference~~Management’s ~~Call~~solicitation of proxies will primarily be by mail, but some proxies may be solicited personally or by telephone by the regular employees of the Company at nominal cost. All costs of solicitation by management will be borne by the Company.

~~OSI~~APPOINTMENT ~~Geospatial~~OF ~~will present the results from the 2006 second quarter at 8:00 a.m. Eastern Time~~PROXIES (5:00 a.m. Pacific Time), today, July 12, 2006. The conference call may be accessed on the company’s investor site at www.osigeospatial.com. To listen to the conference call live by telephone, dial +1-866-400-2280 for participants in North America and +1-416-850-9143 for Toronto area and international participants approximately ten minutes before the start time. A telephone playback will available via telephone for two business days, beginning approximately two hours after the call. To listen to the

The individuals named in the accompanying form of proxy are directors and/or officers of the Company.

A shareholder wishing to appoint some other person (who need not be a shareholder) to represent him at the Meeting has the right to do so, either by striking out the names of those persons named in the accompanying form of proxy and inserting the desired person’s name in the blank space provided in the form of proxy or by completing another form of proxy.

A proxy will not be valid unless the completed form of proxy is received by Computershare Investor Services Inc., Attention: Proxy Department, 9^th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, or by fax at 1-866-249-7775, (the “Transfer Agent”) not less than 48 hours (excluding Saturdays, Sundays, and holidays) before the time for holding the Meeting or any adjournment thereof, or delivered to the Chair of the Meeting prior to the commencement of the Meeting.

REVOCATION OF PROXIES

A shareholder who has given a proxy may revoke it by an instrument in writing executed by the shareholder or by his attorney authorized in writing or, where the shareholder is a corporation, by a duly authorized officer or attorney of the corporation, and delivered to the registered and records office of the Company, at Suite 800 – 885 West Georgia Street, Vancouver, British Columbia, V6C 3H1, at any time up to and including the last business day preceding the day of the Meeting or if adjourned, any reconvening thereof, or to the Chair of the Meeting on the day of the Meeting or, if adjourned, any reconvening thereof or in any other manner provided by law. A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation.

CHANGES TO PROXY DELIVERY TO BENEFICIAL SHAREHOLDERS

There are two kinds of beneficial owners – those who object to their name being made known to the issuers of securities which they own (called OBOs for Objecting Beneficial Owners) and those who do not object to the issuers of the securities they own knowing who they are (called NOBOs for Non-Objecting Beneficial Owners). Up until September 2002, issuers (including the directors and officers of the Company) had no knowledge of the identity of any of their beneficial owners, including NOBOs.

~~News~~After ~~Release~~September 1, 2002, subject to the provision of National Instrument 54-101, “Communication with Beneficial Owners of Securities of Reporting Issuers”, issuers could request and obtain a list of their NOBOs from intermediaries via their transfer agents. Issuers may now obtain and use this NOBO list for distribution of proxy-related materials directly to NOBOs.

~~telephone~~This ~~replay~~year, ~~please~~the ~~dial~~Company +1has decided to take advantage of those provisions of National Instrument 54-~~888-567-0782~~101 ~~and~~that ~~for~~permit ~~international~~it ~~callers,~~to ~~dial~~directly +1deliver proxy-~~402-220-2884~~related materials to its NOBOs via its transfer agent. As a result, NOBOs can expect to receive a scannable Voting Instruction Form from the ~~Enter~~Company’s ~~access~~transfer ~~code~~agent, ~~2352238~~Computershare Trust Company of Canada (or Computershare Investor Services Inc.) (“Computershare”).

~~About~~ADVICE ~~OSI~~TO ~~Geospatial OSI~~BENEFICIAL ~~Geospatial Inc. delivers advanced systems and software to address the growing need for enhanced~~SHAREHOLDERS 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~~The ~~Statements~~information in this section is of significant importance to many shareholders, as a substantial number of shareholders do not hold common shares in their own name.

~~Certain~~Shareholders ~~statements~~who ~~made~~hold intheir ~~this~~common ~~news~~shares ~~release~~through ~~that~~their ~~are~~brokers, ~~not~~intermediaries, ~~based~~trustees, onor ~~historical information~~other ~~(including~~persons, ~~those~~or inwho ~~the~~otherwise ~~section~~do ~~entitled~~not ~~“Outlook”)~~hold ~~are~~their ~~forward-looking~~common ~~statements~~shares ~~which~~in ~~are~~their ~~made pursuant~~own toname ~~the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and Section 138.4~~(9)referred ofto ~~the~~in ~~Ontario Securities Act. These forward-looking statements are subject to~~this ~~risks~~Circular ~~and~~as ~~uncertainties.~~“Beneficial ~~Actual~~Shareholders”) ~~results~~should ~~may~~note ~~differ~~that ~~from~~only ~~these~~proxies ~~projections.~~deposited ~~The~~by ~~risks~~shareholders ~~associated~~who ~~with~~appear ~~the Company’s business include risks related to its reliance~~ on ~~international government contracts;~~ the ~~number~~records ofmaintained ~~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~~Company’s ~~ability~~ toregistrar ~~introduce, develop~~ and ~~implement~~transfer ~~new~~agent ~~products~~as ~~and enhancements to existing products that~~registered ~~respond~~holders ~~to customer requirements in a changing, complex, technological market. A complete discussion~~ of ~~the~~common ~~company’s~~shares ~~risk~~will ~~factors~~be isrecognized ~~presented in the company’s most recent annual reports, filed with the United States Securities~~ and ~~Exchange~~acted ~~Commission~~upon ~~(“SEC”)~~at ~~and~~ the ~~Canadian Securities Administrators (“CSA”), as well as other periodic reports filed with the SEC and the CSA~~Meeting. ~~The~~ ~~Company does not undertake any obligation to update the forward-looking statements.~~

~~Copyright~~If ©the ~~2006~~common ~~OSI~~shares ~~Geospatial~~are ~~Inc.~~listed ~~and~~in ~~its~~an ~~affiliated~~account orstatement ~~related~~provided ~~companies.~~to ~~ECPINS~~a ~~and~~Beneficial ~~COP-IDS~~Shareholder by a ~~are~~broker, those common shares will, in all likelihood, not be registered ~~trademarks~~in the shareholder’s name. Such common shares will more likely be registered under the name of ~~Offshore~~the ~~Systems~~shareholder’s ~~Ltd~~broker or an agent of that broker. In Canada, anthe ~~OSI~~vast ~~Geospatial~~majority ~~company~~of such shares are registered under the name of CDS & Co. ~~Other~~(the ~~company~~registration ~~brand~~name for The Canadian Depositary for Securities, which acts as nominee ~~product~~for ~~and~~many ~~service~~Canadian ~~names~~brokerage ~~are~~firms). ~~for~~Common ~~identification~~shares ~~purposes~~held ~~only~~by ~~and~~brokers ~~may~~(or betheir ~~either~~agents ~~trademarks,~~or nominees) on ~~service~~behalf ~~marks~~of a broker’s client can only be voted (for or ~~registered~~against ~~trademarks~~resolutions) at the direction of the Beneficial Shareholder. Without specific instructions, brokers and their ~~respective~~agents ~~owners~~and nominees are prohibited from voting shares for the broker’s clients. ~~Data~~Therefore, ~~subject~~each Beneficial Shareholder should ensure that voting instructions are communicated to ~~change~~the ~~without~~appropriate person well in advance ~~notice~~of the Meeting.

~~For~~Existing ~~more~~regulatory ~~information: Tracy~~policy ~~Rawa~~requires brokers and other intermediaries to seek voting instructions ~~Manager,~~from ~~Investor~~Beneficial ~~Relations~~Shareholders in advance of shareholders’ meetings. The various brokers and other +1intermediaries ~~604~~have ~~904~~their ~~4627~~own ormailing +1procedures ~~888~~and ~~880~~provide ~~9797~~their own return instructions to +1clients, ~~604~~which ~~987~~should ~~2555~~be ~~(FAX)~~carefully followed by Beneficial Shareholders in order to ensure that ~~invest@osigeospatial~~their common shares are voted at the Meeting.~~com~~

The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is substantially similar to the Instrument of Proxy provided directly to registered shareholders by the Company. However, its purpose is limited to instructing the registered Shareholder (i.e., the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder.

In Canada the vast majority of brokers now delegate responsibility for obtaining instructions from clients to ADP Investor Communications (“ADP”) and/or Computershare. ADP and Computershare typically prepare a machine-readable voting instruction form, mails those forms to Beneficial Shareholders and ask Beneficial Shareholders to return the forms to them, or otherwise communicate voting instructions by way of the Internet or telephone, for example. ADP and Computershare then tabulate the results of all instructions received and provide appropriate instructions respecting the voting of shares to be represented at the Meeting.

~~News~~A ~~Release~~Beneficial Shareholder who receives an ADP or Computershare voting instruction form cannot use that form to vote common shares directly at the Meeting. The voting instruction forms must be returned to ADP or Computershare (or instructions respecting the voting of common shares must otherwise be communicated to ADP or Computershare) well in advance of the Meeting in order to have the common shares voted. If you have any questions respecting the voting of common shares held through a broker or other intermediary, please contact that broker or other intermediary for assistance.

~~OSI~~Although ~~Geospatial~~a ~~Inc.~~Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of ~~Consolidated~~voting ~~Balance~~common ~~Sheets~~shares ~~(Unaudited)~~registered in the name of his broker, a Beneficial Shareholder may attend the (Meeting as proxyholder for the registered shareholder and vote the common shares in Uthat capacity.S. Beneficial ~~dollars~~Shareholders who wish to attend the Meeting and indirectly vote their common shares as proxyholder for the registered shareholder, ~~U.S.~~should ~~GAAP~~enter their own names in the blank space on the form of proxy provided to them and return the same to their broker (or the broker’s agent) in accordance with the instructions provided by such broker.

	May 31			November 30
	2006			2005
Assets
Current assets
Cash and cash equivalents	$	1,419,553		$	8,222,226
Marketable securities		159,685			—
Restricted cash		60,000			189,519
Accounts receivable		7,223,816			9,419,395
Inventory		1,109,450			937,554
Prepaid expenses and deposits		672,779			532,282
		10,645,283			19,300,976
Plant and equipment		1,080,632			869,398
Intangible and other assets		870,558			625,799
Goodwill		8,130,396			405,681
	$	20,726,869		$	21,201,854
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	3,017,715		$	3,359,656
Income taxes payable		62,022			242,411
Unearned revenue		874,823			454,220
		3,954,560			4,056,287
Deferred income taxes		342,697			200,998
		4,297,257			4,257,285
Stockholders’ Equity
Issued and outstanding
30,262 Class A preference shares – Series A (2005 – 30,262)		19,227			19,227
317,240 Class B preference shares – Series 2 (2005 – 341,240)		8,750,314			9,040,914
32,857,048 common shares (2005 – 30,367,309)		17,060,916			15,373,529
		25,830,457			24,443,670
Warrants		4,286,060			4,286,060
Additional paid in capital		3,860,761			3,995,835
Accumulated deficit		(20,202,694	)		(18,061,619	)
Accumulated other comprehensive income		2,655,028			2,290,623
		16,429,612			16,944,569
	$	20,726,869		$	21,201,854

All references to shareholders in this Information Circular and the accompanying form of proxy and Notice of Meeting are to registered shareholders unless specifically stated otherwise.

VOTING OF PROXIES

Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided.

If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this proxy with signing capacity stated.

This proxy should be signed in the exact manner as the name appears on the proxy.

If this proxy is not dated, it will be deemed to bear the date on which it is mailed by management to the holder.

THE SECURITIES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE HOLDER, HOWEVER, IF SUCH A DIRECTION IS NOT MADE IN RESPECT OF ANY MATTER, THIS PROXY WILL BE VOTED AS RECOMMENDED BY MANAGEMENT.

The securities represented by this proxy will be voted or withheld from voting, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.

This proxy confers discretionary authority in respect of amendments to matters identified in the Notice of Meeting or other matters that may properly come before the meeting.

This proxy should be read in conjunction with the accompanying documentation provided by management.

~~News~~VOTING ~~Release~~IN PERSON

~~OSI~~Any ~~Geospatial~~shareholder ~~Inc.~~attending the Meeting to vote personally or as proxyholder for another shareholder ~~Consolidated~~shall ~~Statements~~be required to produce identification satisfactory to the Chair of ~~Earnings~~the ~~(Loss)~~Meeting ~~(Unaudited)~~establishing ~~(in~~his ~~U.S.~~or ~~dollars,~~her Uidentity.~~S. GAAP)~~

	Three months ended May 31						Six months ended May 31
	2006			2005			2006			2005
Revenue
Marine systems	$	2,435,442		$	783,226		$	3,717,882		$	2,372,381
Land and air systems		2,370,118			—			4,221,681			—
Mapping		1,334,309			750,019			1,863,057			998,748
		6,139,869			1,533,245			9,802,620			3,371,129
Cost of sales		3,544,897			1,216,568			6,013,942			2,049,336
Gross profit		2,594,972			316,677			3,788,678			1,321,793
Expenses
General and administrative		1,514,184			836,773			2,859,976			1,678,981
Research and development		450,592			372,761			992,859			633,270
Sales and marketing		605,817			543,530			1,158,039			992,314
Depreciation and amortization		137,878			63,712			269,905			107,478
Interest expense		6,218			6,950			12,264			17,234
Interest income		(6,849	)		(31,347	)		(19,683	)		(31,437	)
Foreign exchange loss (gain)		(21,147	)		62,307			267			24,328
Technology Partnerships Canada royalty		107,668			30,459			164,572			74,861
Technology Partnerships Canada contribution		(293,372	)		(378,386	)		(503,840	)		(594,399	)
		2,500,989			1,506,759			4,934,359			2,902,630
Net earnings (loss) before income taxes		93,983			(1,190,082	)		(1,145,681	)		(1,580,837	)
Income tax expense (recovery)
Deferred income tax expense (recovery)		(23,321	)		113,378			(7,594	)		(94,440	)
Current income tax expense		119,441			66,587			93,706			82,116
		96,120			179,965			86,112			(12,324	)
Net loss	$	(2,137	)	$	(1,370,047	)	$	(1,231,793	)	$	(1,568,513	)
Net loss available to common shareholders	$	(715,055	)	$	(5,560,039	)	$	(2,120,971	)	$	(5,780,204	)
Loss per share
Basic and diluted earnings per share	$	(0.02	)	$	(0.20	)	$	(0.07	)	$	(0.21	)
Weighted average number of common shares outstanding
Basic and diluted		32,301,357			27,488,074			31,790,928			27,488,074

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

None of the directors or senior officers of the Company, nor any person who has held such a position since the beginning of the last completed financial year of the Company, nor any proposed nominee for election as a director of the Company, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than the election of directors.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

As of March 14, 2007, the Company had 36,858,810 common shares without par value, 30,262 Class A Preference Shares Series A Convertible and 250,570 Class B Series 2 Convertible Preference Shares issued and outstanding.

The holders of common shares, Class A Preference Series A Convertible Shares (“Class “A”, Series A Shares”) and Class B Series 2 Convertible Preference Shares (“Class “B” Series 2 Shares”) are entitled to receive notice of and to attend and vote at any meetings of the shareholders of the Company.

Only shareholders of record at the close of business on March 14, 2007 (the “Record Date”) who either personally attend the Meeting or who have completed and delivered a form of proxy in the manner and subject to the provisions described above shall be entitled to vote or to have their shares voted at the Meeting.

To the knowledge of the directors and senior officers of the Company no person holds, directly or indirectly, shares carrying more than 10% of the voting rights attached to all classes of voting shares of the Company.

ELECTION OF DIRECTORS

Management of the Company proposes that the number of directors for the ensuing year be fixed at seven. Shareholders will therefore be asked to approve an ordinary resolution that the number of directors elected be fixed at seven. Management intends to nominate the persons named in the following table for election as directors of the Company. Each of management’s nominees currently serves as a director of the Company. Each director elected will hold office until the next annual general meeting or until his successor is duly elected or appointed, unless his office is earlier vacated in accordance with the Articles of the Company or he becomes disqualified to act as a director. In fiscal 2006 the Company had an Audit Committee, a Human Resources and Compensation Committee, and an Executive Committee. The members of such committees are indicated below.

The following information concerning the proposed nominees has been furnished by each of them:

News Release


			No. of Shares
			Beneficially Owned,
Name and Present	Principal Occupation for the		Controlled or
Position in the Company	Past Five Years	Director Since	Directed⁽¹⁾

RAYMOND W. JOHNSTON Chair of the Board & Director⁽³⁾⁽⁴⁾	President of Chamber of Maritime Commerce, December 1999 to present; CEO, Canada Steamship Lines, May 1992 to June 1999.	November 14, 2000 (and from December 21, 1994 to September 28, 1998)	54,000 common shares

KENNETH KIRKPATRICK President, Chief Executive Officer & Director⁽³⁾	President and CEO of the Company, November 7, 2005 to present; COO of the Company, June 2001 to November 2005.	November 7, 2005	55,500 common shares

HELMUT F. LOBMEIER Director⁽²⁾	Independent Businessman and formerly co-owner of PSL Steel Ltd.	April 26, 1990	731,695 common shares

CAPTAIN WALTER P. PURIO Director⁽⁴⁾	Independent Marine Consultant, 2000 to present; President, P and H Marine Associates, Inc., 1993 to 2000; Shipmaster — Oceans, General Dynamics, American Overseas Marine Corporation, 1985 to present.	January 14, 1999	133,000 common shares

GERALD J. SHIELDS Director	Principal of Providia Investment November, 2006 to present; Lawyer engaged in private practice with the firms of Godinho Sinclair Shields, and from July 2005 to November 2006 with Clark Wilson LLP.	April 8, 2005	50,000 common shares

JOSEPH A. STROUD Director⁽²⁾⁽³⁾	Partner at General Management Partners LLC, 2005 to present; Consultant at J.J. Lehman Equity Investors I, LP, 1997 to present.	March 15, 2006	100,000 common shares

DONALD W. YOUNG^(2) (3) Director	Retired, October 2005 to present; Audit Partner KPMG LLP 1979 to September 2005.	March 15, 2006	50,000 common shares

~~OSI Geospatial Inc.~~NOTES: ~~Consolidated Statements of Cash Flows (Unaudited)~~ ~~(in U.S. dollars, U.S. GAAP)~~

	Three months ended May 31						Six months ended May 31
(1)	The approximate number of shares of the Company carrying the right to vote in all circumstances beneficially owned, directly or indirectly, or over which control or direction is exercised by each proposed nominee as of the date of this Information Circular.
	2006			2005			2006			2005
(2)	Member of Audit Committee.
Cash flows provided by operating activities
(3)	Member of Executive Committee.
Net loss for the period	$	(2,137	)	$	(1,370,047	)	$	(1,231,793	)	$	(1,568,513	)
(4)	Member of Human Resources and Compensation Committee.
Items not affecting cash
Depreciation and amortization		201,225			95,068			388,578			164,107
Stock-based compensation		78,569			10,725			103,743			12,961
Deferred income taxes		2,414			114,050			(7,594	)		(78,239	)
		280,071			(1,150,204	)		(747,066	)		(1,469,684	)
Changes in non-cash working capital items
Accounts receivable		(1,636	)		1,165,596			3,636,020			1,975,522
Inventory		(15,732	)		(24,397	)		(109,663	)		(198,072	)
Prepaid expenses and deposits		32,421			88,843			92,307			(153,706	)
Accounts payable and accrued liabilities		630,745			1,073,781			(1,148,540	)		379,972
Income taxes payable		(30,699	)		60,915			(171,219	)		60,915
Unearned revenue		126,302			(2,095	)		377,912			(6,623	)
		741,401			2,362,643			2,676,817			2,058,008
		1,021,472			1,212,439			1,929,751			588,324
Cash flows used in investing activities
Purchase of CHI Systems Inc., net of cash acquired		(239,642	)		—			(8,122,800	)		—
Purchase of Mapcon Mapping Consultants Inc., net of cash acquired		—			(972,421	)		—			(972,421	)
Decrease (increase) in marketable securities		98,531			—			(159,685	)		—
Decrease (increase) in restricted cash		(60,000	)		(175,271	)		129,519			(175,271	)
Additions to plant and equipment		(39,249	)		(60,771	)		(87,017	)		(82,910	)
Additions to intangibles and other assets		(52,723	)		(19,211	)		(92,999	)		(30,278	)
		(293,083	)		(1,227,674	)		(8,332,982	)		(1,260,880	)
Cash flows provided by (used in) financing activities
Payment to operating line of credit		—			(442,386	)		—			—
Issue of common shares		6,480			—			6,480			—
Issue of Class B Series 2 preference shares and warrants, net of issue costs		—			13,798,195			—			13,798,195
Repurchase of Class B Series 2 preference shares		—			(2,298,327	)		—			(2,298,327	)
Class B preference share dividends declared and paid		(526,406	)		(132,972	)		(526,406	)		(201,921	)
		(519,926	)		10,924,510			(519,926	)		11,297,947
Translation adjustment		62,209			(243,712	)		120,484			(171,500	)
Increase (decrease) in cash		270,672			10,665,563			(6,802,673	)		10,453,891
Cash and cash equivalents – beginning of period		1,148,881			—			8,222,226			211,672
Cash and cash equivalents – end of period	$	1,419,553		$	10,665,563		$	1,419,553		$	10,665,563

All of the above persons are ordinarily resident in Canada except Messrs. Purio and Stroud, who are ordinarily resident in Australia and the United States of America respectively.

~~MANAGEMENT’S~~STATEMENT ~~DISCUSSION~~OF ~~AND~~EXECUTIVE ~~ANALYSIS~~COMPENSATION

~~for~~Executive ~~the six months ended May 31, 2006~~Compensation

~~OSI~~The ~~Geospatial~~table ~~Inc. 107~~below –sets ~~930~~out ~~West~~particulars ~~1st~~of ~~Street North~~compensation ~~Vancouver,~~paid BCto ~~V7P~~Named ~~3N4 Tel:~~Executive ~~604.904.4600~~Officers the following ~~Fax:~~Executive ~~604.987.2555~~Officers for services to the Company during the three most recently completed financial ~~www~~years.~~osigeospatial.com~~ The following executive officers are “Named Executive Officers”:

~~MANAGEMENT~~(a) the Company’Ss ~~DISCUSSION~~chief ~~AND~~executive ~~ANALYSIS~~officer (“CEO”) during the most recently completed financial year; (b) the individual who served as our chief financial officer or acted in a similar capacity (“CFO”) during the most recently completed financial year; (c) each of ~~Financial~~our ~~Condition~~three most highly compensated executive officers, other than the CEO and ~~Results~~CFO, who was serving as an executive officer at the end of ~~Operations~~ the most recently completed financial year and whose total salary and bonus exceeded $150,000 per year; and (d) any additional individuals for whom disclosure would have been provided except that the individual was not serving as an executive officer of the Company at the end of the most recently completed financial year.

The following ~~Management~~are the Company’s ~~Discussion~~Named ~~and~~Executive ~~Analysis~~Officers ~~(“MD&A”) provides a review of activities, results of operations, and financial condition of OSI Geospatial Inc.~~ for the ~~six~~purposes ~~months~~of ~~ended May 31, 2006 in comparison with those for~~ the ~~six months ended May 31, 2005. The~~ following ~~discussion~~ ~~should~~disclosure: beKenneth ~~read~~Kirkpatrick in(President ~~conjunction~~and ~~with the unaudited consolidated interim financial statements of OSI Geospatial~~CEO), ~~including~~John ~~the~~Sentjens ~~notes~~(Vice ~~thereto~~President, ~~for the six months ended May 31~~Finance), ~~2006, and the audited~~ ~~annual~~Andrew ~~consolidated~~Carniel ~~financial~~(Vice ~~statements~~President, ~~prepared~~Business inDevelopment, ~~accordance~~Wayne ~~with~~Zachary ~~United~~(Vice ~~States~~President ~~generally accepted~~& ~~accounting~~GM ~~principles~~of (“U.S. Systems ~~GAAP”~~Operations) and ~~the~~Wayne ~~MD&A~~Hoyle ~~for~~(Vice ~~the~~President ~~year~~& ~~ended~~GM ~~November 30,~~of ~~2005~~International ~~as set~~Systems ~~out in our 2005 annual report~~Operations). ~~Except where otherwise indicated, the reader may assume that the~~ ~~economic and industry factors are substantially unchanged from the 2005 year-end MD&A.~~

~~Effective~~Summary ~~December 1,~~Compensation ~~2004, we elected to report our consolidated financial statements in~~Table accordance with U.S. GAAP as permitted by Canadian regulators. All references in this report to financial information concerning OSI Geospatial are in accordance with U.S. GAAP and all dollar amounts are in U.S. dollars unless otherwise indicated. A reconciliation of our results to Canadian generally accepted accounting principles (“Canadian GAAP”) is provided in note 13 of the notes to the interim consolidated financial statements.

~~Beginning~~The infollowing ~~the~~sets ~~first~~forth ~~quarter~~compensation offor ~~fiscal~~the ~~2006, we have changed our financial reporting segments in order to reflect changes in management~~Company’s ~~analysis~~Named ofExecutive ~~our~~Officers ~~business.~~for ~~Our~~the ~~consolidated revenue~~fiscal ~~categories~~years ~~have changed to marine systems, land and air systems, and mapping and our reportable~~indicated: ~~segments are now U.S. Systems Operations, International Systems Operations, Mapping Operations, and Corporate and Public Company costs.~~

This report contains forward-looking statements within the meaning of securities laws including Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding the future achievement of corporate objectives, advancement of additional project interests, analysis and development of acquisition opportunities, various project interests and other matters. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed in or implied by these forward-looking statements. These risks include risks related to the effects of general economic conditions, changing foreign exchange rates, actions by government authorities, uncertainties associated with contract negotiations, and industry supply, as well as other factors discussed below and those risks which are discussed under the heading “Risks and Uncertainties”. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ form those set forth in the forward-looking statements.

ANNUAL COMPENSATION

LONG-TERM COMPENSATION

AWARDS

PAYOUT

Restricted

Securities

Shares or

Under

Restricted

Other

Options

Share

LTIP

All

Name

Year

Salary

`Bonus

Annual

Granted

Units

Payouts

Other

($)

(#)

($)

Kenneth H. Kirkpatrick
President and CEO⁽¹⁾

2006
2005
2004

$249,909
$156,461
$138,269

$78,000
$22,500
$10,000

$9,423
$6,154
$5,385

Nil
288,333
45,000

Nil
Nil
Nil

John T. Sentjens
VP Finance and Secretary

2006
2005
2004

$131,731
$108,230
$97,923

$39,000
$15,000
7,500

Nil
Nil
Nil

Nil
222,000
18,000

Nil
Nil
Nil

Andrew Carniel
VP Business Development

2006
2005
2004

$165,961
$140,000
$138,269

33,000
$7,500
$10,000

$6,006
Nil
$1,679

Nil
188,333
45,000

Nil
Nil
Nil

~~ECPINS and COP-IDS are registered trademarks of Offshore Systems Ltd., an OSI Geospatial company.~~7 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 is subject to change without notice.

Additional information relating to OSI Geospatial, including our Annual Information Form and our Form 20-F report is filed on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and is also available on the company’s investor web site at www.osigeospatial.com. This management’s discussion and analysis is dated July 10, 2006.

ANNUAL COMPENSATION

LONG-TERM COMPENSATION

AWARDS

PAYOUT

Restricted

Securities

Shares or

Under

Restricted

Other

Options

Share

LTIP

All

Name

Year

Salary

`Bonus

Annual

Granted

Units

Payouts

Other

($)

(#)

($)

Wayne Zachary
VP & GM of U.S. Systems Operations⁽²⁾

2006
2005
2004

$161,783
—
—

$34,053
—
—

$8,175
—
—

Nil
—
—

Nil
Nil
—

Nil
—
—

Wayne Hoyle
VP & GM of International Systems Operations⁽³⁾

2006
2005
2004

$126,923
$105,092
$89,009

Nil
Nil
Nil

$58,218
$63,671
$96,477

Nil
45,000
Nil

Nil
Nil
Nil

Page 2 of 16

(1)		Mr. Kirkpatrick was promoted from COO to President and CEO on November 7, 2005.

(2)		Mr. Zachary joined the organization on December 15, 2005 through its acquisition of CHI Systems.

(3)		Mr. Hoyle’s remuneration arrangement includes compensation paid under a commission arrangement tied to the closing of sales. The above figures include variable compensation paid to him under this arrangement of $58,218 (fiscal 2006) $63,671 (fiscal 2005) and $96,477 (fiscal 2004).

~~OVERVIEW~~Long-Term Incentive Plans — Awards in Financial Year Ended November 30, 2006

~~Founded~~The inCompany ~~1977~~has ~~and~~no ~~headquartered~~long-term incentive plans in ~~North~~place. ~~Vancouver,~~A ~~Canada,~~“Long-Term ~~OSI~~Incentive ~~Geospatial~~Plan” ~~designs,~~is ~~develops,~~a ~~and~~plan under ~~markets~~which ~~software~~awards ~~and~~are ~~systems~~made ~~for~~based ~~enhancing~~on ~~situational~~performance ~~awareness~~over ina ~~command,~~period ~~control~~longer than one financial year, other than ~~communications~~a plan for options, ~~and~~SARs ~~intelligence~~(stock ~~applications~~appreciation rights) or restricted share compensation.

WeStock ~~are~~Option ~~the~~Grants ~~market~~During ~~leader in military navigation systems. Our advanced software and systems strengthen~~ the ~~analytical~~Financial ~~and~~Year ~~decision-making~~Ended ~~ability~~November 30, ~~of navies and commercial maritime operators~~2006 ~~around the world by enabling them to know their precise location as well as the details of their surroundings.~~

~~Our~~The ~~principal~~following ~~product~~table issets ~~the~~forth ~~proprietary~~grants ~~ECPINSÒ line~~ of ~~electronic~~stock ~~chart~~options ~~navigation~~during ~~systems for~~the ~~commercial~~2006 ~~and~~fiscal ~~military~~year ~~customers. ECPINSÒ helps~~ to ~~reduce~~ the ~~risk of navigation-related~~Named ~~incidents~~Executive ~~by giving bridge crews a precise, real-time display of their position, course, and speed,~~Officers: against a background of fixed obstacles and other navigational hazards. We have developed a strong market position in military navigation, and ECPINSÒ has been deployed with the Canadian and United States Coast Guards, the Royal Australian Navy, the Canadian Navy, the Royal Danish Navy, the Royal New Zealand Navy, the Royal Norwegian Navy, the Royal Navy of the United Kingdom and the United States Navy. Six NATO and allied navies have adopted our systems as their fleet standard.

InMarket ~~the~~Value ~~second~~Total ~~quarter~~Options ofOf ~~2006,~~Securities weGranted ~~released~~to aUnderlying ~~new~~Securities ~~Integrated~~Under ~~Electronic~~Employees ~~Chart~~in ~~Display~~Exercise ~~and Information~~or ~~System~~Options ~~(ECDIS) and~~on ~~Simplified~~the ~~Voyage~~Name ~~Data~~Options ~~Recorder~~Granted ~~(S-VDR)~~Financial ~~for~~Year ~~the~~Base ~~commercial~~price ~~shipping market.~~Date ~~This~~of ~~new~~Grant ~~product~~Expiration ~~will~~Date ~~enable~~(#) ~~commercial~~(%) ~~ship~~($/Security) ~~operators~~($/Security) toKenneth ~~benefit~~H. ~~from~~Kirkpatrick ~~our~~President ~~world-leading navigation~~and ~~technology~~CEO ~~while~~Nil ~~meeting~~Nil ~~newly~~Nil ~~mandated~~Nil ~~International~~Nil ~~Maritime~~John ~~Organization~~T. ~~(IMO) carriage~~Sentjens ~~requirements.~~VP ~~Under~~Finance ~~the~~and ~~latest~~Secretary ~~IMO~~Nil ~~carriage~~Nil ~~requirements,~~Nil ~~all~~Nil ~~existing~~Nil ~~ships~~Andrew ~~over~~Carniel ~~3,000 gross~~VP ~~tons~~Business ~~engaged~~Development inNil ~~international~~Nil ~~voyages~~Nil ~~must~~Nil ~~install~~Nil anWayne ~~S-VDR~~Zachary byVP ~~July 1,~~& ~~2010~~GM of U.S. WeSystems ~~are~~Operations ~~working with~~Nil ~~Radio~~Nil ~~Holland~~Nil ~~Group~~Nil toNil ~~provide~~Wayne ~~our~~Hoyle ~~customers~~VP ~~with~~& ~~installation,~~GM ~~maintenance,~~of ~~and~~International ~~certification services~~Systems inOperations ~~major~~Nil ~~ports~~Nil ~~around~~Nil ~~the~~Nil ~~world.~~ Nil

~~The need for interoperability during coalition operations combined with a growing emphasis on~~8 geospatial intelligence to support strategic decision-making is driving demand for enhanced situational awareness in land and air systems. Our advanced technology systems provide critical capability for defense and intelligence forces by enabling multiple users to share information from a variety of data sources. Our command and control applications address the needs of the Navy, Army, Air Force, Special Forces and joint forces operations.

~~Our~~Aggregated ~~Common~~Stock ~~Operational~~Option ~~Picture~~Exercises ~~product~~During ~~line launched in 2003 targets command and control, mission planning, navigation and mobile asset management applications for~~ the ~~situational~~Financial ~~awareness~~Year ~~market. In~~Ended November ~~2005~~30, we2006 ~~were contracted for its first full deployment with the Royal Danish Navy~~ and in ~~May 2006~~Financial ~~we won a $1.8 million sale to the U.S. Navy through L~~Year-3End ~~Communications~~Option ~~Marine Systems.~~Values

In 2002, the company entered the land-based mapping market, utilizing the skills and experience gained in the production and distribution of marine charts. Through our U.S. mapping operations, we have developed visibility in high growth areas of the mapping market and are focused on securing prime contract work in the U.S. with government, military, and commercial customers.


				Value of Unexercised
			Unexercised Options	in-the-money Options
	Securities Acquired	Aggregate Value	at FY-End (#)	at FY-End ($)
Name	on Exercise (#)	Realized ($)	Exercisable/Unexercisable	Exercisable/Unexercisable

Kenneth H. Kirkpatrick President and CEO	Nil	$Nil	350,000 exercisable Nil unexercisable	Nil exercisable Nil unexercisable

John T. Sentjens VP Finance and Secretary	Nil	$Nil	250,000 exercisable Nil unexercisable	Nil exercisable Nil unexercisable

Andrew Carniel VP Business Development	Nil	$Nil	250,000 exercisable Nil unexercisable	Nil exercisable Nil unexercisable

Wayne Zachary VP & GM of U.S. Systems Operations	Nil	$Nil	100,000 exercisable Nil unexercisable	Nil exercisable Nil unexercisable

Wayne Hoyle VP & GM of International Systems Operations	Nil	$Nil	45,000 exercisable Nil unexercisable	Nil exercisable Nil unexercisable

~~Our~~Stock ~~long-term~~Option ~~goal is to become the leading provider of software~~ and ~~systems~~SAR ~~for enhancing~~Repricings situational awareness in command, control, communications, and intelligence applications. We plan to grow through internal growth, focused on new and existing customers in the military agencies of Canada, U.S., European NATO and other allies of Canada, and national and international commercial marine transportation companies. In addition, we are pursuing strategic alliances, investments, and acquisitions that are complementary to our existing lines of business.

~~Page~~During 3the ofmost 16recently completed financial year, the Company did not reprice downward any stock options held by any Named Executive Officer. The Company does not have any SARs.

~~SELECTED~~Defined ~~DATA~~Benefit or Actuarial Plan

The ~~following~~Company ~~tables~~does ~~contain~~not ~~financial~~have ~~information~~a ~~that~~pension isplan ~~derived~~or ~~from~~actuarial ~~the~~plan ~~unaudited~~under ~~consolidated financial~~which ~~statements~~benefits ~~for~~are ~~the six months ended May 31, 2006 and from the audited consolidated~~determined ~~financial~~primarily ~~statements~~by ~~for~~final ~~the~~compensation ~~year~~(or ~~ended~~average ~~November 30,~~final ~~2003, 2004 and 2005~~compensation).

	For the six months ended						For the year ended
Operations:	May 31						November 30
	2006			2005			2005			2004			2003
	$			$			$			$			$
Revenue		9,802,620			3,371,129			11,126,693			10,411,096			8,101,876
Gross profit		3,788,678			1,321,793			5,430,414			6,019,444			4,468,585
Gross profit percentage		38.6	%		39.2	%		48.8	%		57.8	%		55.2	%
Net earnings (loss)		(1,231,793	)		(1,568,513	)		(2,748,774	)		191,467			325,265
Net loss attributable to common shareholders		(2,120,971	)		(5,780,204	)		(8,427,876	)		(44,972	)		(398,021	)
Loss per share – basic and diluted		(0.07	)		(0.21	)		(0.30	)		(0.00	)		(0.02	)
Weighted average common shares outstanding – basic		31,790,928			27,488,074			27,989,832			27,147,246			25,977,123
Weighted average common shares outstanding — diluted		31,790,928			27,488,074			27,989,832			29,856,412			27,142,492

Termination of Employment, Change in Responsibilities and Employment Contracts

Financial position:	At May 31				At November 30
	2006		2005		2005		2004		2003
	$		$		$		$		$
Cash and cash equivalents, including restricted cash		1,639,238		10,840,834		8,411,745		211,672		2,949,362
Working capital(1)		6,690,723		15,483,498		15,244,689		6,986,341		6,125,422
Current assets		10,645,283		18,230,848		19,300,976		9,241,933		7,942,659
Total assets		20,726,869		20,033,916		21,201,854		10,377,481		8,982,214
Current liabilities		3,954,560		2,747,349		4,056,286		2,255,592		1,817,237
Long term liabilities		342,697		—		200,998		—		103,108
Total liabilities		4,297,257		2,747,349		4,257,285		2,255,592		1,920,345
Shareholders’ equity		16,429,612		17,286,567		16,944,569		8,121,890		7,061,868

The following is a summary of the material terms and conditions of the employment contracts between the Company and each of the Named Executive Officers as of the Company’s financial year ended November 30, 2006.

Kenneth Kirkpatrick serves as President and CEO pursuant to an employment contract dated November 7, 2005. The employment contract is for no fixed term. The contract may be terminated by the Company at any time for cause, and at any time without cause upon 18 months notice or payment of 18 months base salary in lieu of notice. Mr. Kirkpatrick’s current base salary under the contract is $245,000. He is also eligible to receive stock options as well as cash bonuses at the discretion of the Board of Directors, based on the Company meeting certain performance objectives (1subject to a maximum of 40% of his base salary). ~~Working~~In ~~capital~~addition, Mr. Kirkpatrick is ~~defined~~eligible asto ~~current~~participate ~~assets~~in ~~less~~a plan ~~current~~offered ~~liabilities~~to all employees whereby the Company will pay a maximum of 4% of his base salary earned during the year to a designated registered retirement savings plan provided that he matches such payment. ~~Working~~The ~~capital~~employment ~~does~~contract ~~not~~provides ~~have~~that in the event of a ~~standardized~~change ~~meaning~~of orcontrol ~~comparable~~of ~~measure~~the Company, ~~under~~that ~~generally~~the ~~accepted~~Company ~~accounting~~is ~~principles~~taken ~~and~~over by a third party, Mr. Kirkpatrick may ~~not~~at behis ~~comparable~~option terminate the contract, in which event he is entitled to ~~similar~~a ~~measures~~severance ~~presented~~payment byequal ~~other~~to ~~companies~~18 months base salary The employment contract also includes provisions in favor of the Company related to the confidentiality, proprietary rights and intellectual property, and non-competition and non-solicitation of employees and customers of the Company.

Dividends declared
per share:	At May 31				During Year ended November 30
	2006		2005		2005		2004		2003
	$		$		$		$		$
Common shares		—		—		—		—		—
Class A preference shares		—		—		—		—		—
Class B preference shares – series 1		—		—		2.24		3.05		0.64
Class B preference shares – series 2		1.59		0.41		3.41		—		—

John Sentjens serves as Vice President, Finance pursuant to an employment contract dated November 14, 2005. The employment contract is for no fixed term. The contract may be terminated by the

~~Page 4 of 16~~9

~~For~~Company ~~the~~at ~~six~~any time for cause, and at any time without cause upon 12 months ~~ended~~notice ~~May~~or payment of 12 months base salary in lieu of notice. Mr. ~~31,~~Sentjens’ ~~2006,~~current webase ~~have~~salary ~~delivered~~under ~~engineering~~the ~~services~~contract is $150,000. ~~software~~He ~~and system~~is ~~products~~also eligible to receive stock options as well as cash bonuses at the ~~U.S.~~discretion ~~Air~~of the ~~Force~~Board of Directors, Ubased on the Company meeting certain performance objectives (to a maximum of 30% of his base salary).S. ~~Army~~In addition, UMr.S. Sentjens ~~Navy,~~is ~~Royal~~eligible ~~Australian~~to ~~Navy~~participate ~~through~~in a plan offered ~~Nautronix~~to ~~Ltd~~all employees whereby the Company will pay a maximum of 4% of his base salary earned during the year to a designated registered retirement savings plan provided that he matches such payment. The employment contract also includes provisions in favor of the Company related to the confidentiality, proprietary rights and ~~the~~intellectual ~~Canadian~~property, ~~Navy~~and non-competition and non-solicitation of employees and customers of the Company.

~~Our~~Andrew ~~results~~Carniel ~~are~~serves ~~primarily~~as ~~influenced~~Vice-President, Business Development pursuant to an employment contract dated November 14, 2005, as amended. The employment contract is for no fixed term. The contract may be terminated by the ~~level,~~Company ~~timing~~at any time for cause, and ~~duration~~at any time without cause upon 12 months notice in writing or payment of ~~customer~~severance ~~orders~~equal ~~and~~to 12 months base salary in lieu of notice. Mr. ~~customer~~Carniel’s ~~product~~current ~~delivery~~base ~~requirements~~salary under the contract is $165,000. WeHe ~~depend~~is ~~heavily~~also eligible to receive stock options as well as cash bonuses at the discretion of the Board of Directors, based on ~~government~~the ~~contracts~~Company meeting ~~and~~certain ~~derive~~performance objectives (to a maximum of 30% of his base salary. In addition, Mr. ~~significant~~Carniel ~~amount~~is eligible to participate in a plan offered to all employees whereby the Company will pay a maximum of ~~revenue~~4% ~~from~~of his base salary earned during the year to a ~~few~~designated ~~customers,~~registered ~~which~~retirement savings ~~may~~plan ~~result~~provided that he matches such payment. The employment contract also includes provisions in ~~varying~~favor ~~revenue~~of the Company related to the confidentiality, ~~gross~~proprietary rights and ~~profit~~intellectual property, and ~~earnings~~non-competition and non-solicitation of employees and customers of the Company.

Wayne Zachary serves as Vice President & General Manager of OSI’s U.S. Systems Operations pursuant to an employment contract dated December 14, 2005. The ~~increase~~employment incontract ~~revenue~~is for a 3 year fixed term, subject to earlier termination, with the ~~six~~option ~~months~~to ~~ended~~extend ~~May~~for successive 1 31year periods. The contract may be terminated by the Company at any time for cause, ~~2006~~and asat ~~compared~~any totime without cause upon the ~~six~~continuation of base salary for a period of 12 months ~~ended May~~following termination. Mr. 31Zachary’s current base salary under the contract is US$200,000. ~~2005~~He is ~~largely~~also ~~due~~eligible to receive stock options at the ~~addition~~discretion of ~~$4.2 million~~the inBoard ~~land~~of ~~and~~Directors ~~air~~as ~~systems~~well ~~revenue~~as ~~gained~~cash bonuses based on the Company meeting ~~through~~certain ~~our~~performance ~~recent~~objectives U(to a maximum of 40% of his base salary).S In addition, Mr. Zachary is ~~Systems~~entitled ~~acquisition~~to a company leased or owned automobile with an MSRP not to exceed $30,000 during 2006. The ~~Our~~employment ~~revenue~~contract isalso ~~influenced~~includes byprovisions ~~the~~in ~~timing~~favor of ~~new~~the Company related to the ~~contracts~~confidentiality, ~~that~~proprietary ~~are~~rights ~~awarded~~and intellectual property, and ~~the~~non-competition ~~delivery~~and non-solicitation ~~schedules~~of employees and customers of ~~existing~~the ~~contracts~~Company.

~~Fluctuations~~Wayne inHoyle ~~gross~~serves ~~profit~~as ~~are~~Vice ~~influenced~~President & General Manager of OSI’s International Systems Operations pursuant to an employment contract dated July 17, 2006. The employment contract is for no fixed term. The contract may be terminated by the ~~proportion~~Company ofat ~~engineering~~any ~~labor~~time for cause, ~~third-party~~and at any time without ~~systems~~cause orupon ~~third-party~~12 months ~~labor~~notice or ~~portions~~payment of ~~all~~12 months ~~three~~base ~~required~~salary ~~for~~in alieu ~~project~~of notice. Mr. Hoyle’s current base salary under the contract is $165,000 and ahe ~~high~~is ~~proportion~~eligible to receive stock options at the discretion of ~~these~~the ~~factors~~Board ~~can~~of ~~result~~Directors. inUp ~~increased~~until ~~cost~~November 30, of2006, ~~sales~~Mr. Hoyle ~~Certain~~is ~~contracts~~also ~~awarded~~eligible ~~may~~to receive ~~require~~cash commissions on the ~~inclusion~~ gross sales of ~~engineering~~the ~~labor~~Navigation Systems business unit. Those commissions totaled $58,217.66 ~~third-party~~for ~~systems~~fiscal or2006. ~~third-party~~Starting ~~labor~~fiscal 2007, Mr. Hoyle Inwill ~~order~~no tolonger ~~maintain~~be ~~competitiveness~~eligible onfor ~~these~~commissions; ~~contracts,~~he wewill ~~may~~be ~~elect~~eligible tofor ~~reduce~~cash ~~our~~bonuses ~~usual~~at ~~margins~~the discretion of the Board of Directors based on the ~~third-party~~Company meeting certain performance objectives (to a maximum of 30% of his ~~components~~base salary). In addition, Mr. Hoyle is eligible to participate in a plan offered to all employees whereby the ~~product~~Company ~~mix~~will pay a maximum of ~~services~~4% ~~revenue,~~of ~~software,~~his ~~mapping,~~base ~~and~~salary ~~systems~~earned ~~and~~during the year to a ~~systems~~designated ~~components~~registered retirement savings plan provided that he matches such payment. The employment contract also includes provisions in ~~any~~favor ~~given~~of ~~period~~the ~~may~~Company ~~impact~~related to the ~~gross~~confidentiality, proprietary ~~profit~~rights ~~for~~and intellectual property, and non-competition and non-solicitation of employees and customers of the ~~period~~Company.

~~The lower gross profit percentage for the six months ended May 31, 2006 as compared to the six~~10 months ended May 31, 2005 is the result of lower software revenue and the addition of engineering services revenue generated in our acquired operations. Software revenue generates more favorable margins than our other revenue streams and services revenue generates less favorable margins than other revenue streams.

~~RESULTS~~Composition OFof ~~OPERATIONS~~the Human Resources and Compensation Committee

~~Overall~~The ~~Performance~~members of the Human Resources and Compensation Committee were Brint Coxe, Walter Purio, and Raymond Johnston, all of whom served on the Committee throughout the financial year ended November 30, 2006. All of the members of the Committee are independent directors, have no indebtedness to the Company and have no interest in any material transactions with the Company.

Three months ended May 31	2006			2005			2006 to 2005
Earnings (loss) before income taxes	$	93,983		$	(1,190,082	)	$	1,284,065
Net loss	$	(2,137	)	$	(1,370,047	)	$	1,367,910
Net loss attributable to common shareholders	$	(715,055	)	$	(5,560,039	)	$	4,844,984
Loss per share — basic and diluted	$	(0.02	)	$	(0.20	)	$	0.18

REPORT ON EXECUTIVE COMPENSATION

Six months ended May 31	2006			2005			2006 to 2005
Loss before income taxes	$	(1,145,681	)	$	(1,580,837	)	$	435,156
Net loss	$	(1,231,793	)	$	(1,568,513	)	$	336,720
Net loss attributable to common shareholders	$	(2,120,971	)	$	(5,780,204	)	$	3,659,233
Loss per share — basic and diluted	$	(0.07	)	$	(0.21	)	$	0.14

The Company’s compensation policies are designed to recognize and reward the services of highly skilled executives, as well as provide compensation packages, with incentives, commensurate with industry standards.

~~Page~~Compensation 5packages reflect responsibilities and the marketplace and are designed to be competitive with (i) that of 16other publicly traded companies involved in industries similar to that of the Company and (ii) other publicly traded companies of comparable size in terms of revenue. In addition, the Company has analyzed compensation surveys and studies to compare the compensation packages to generally accepted practices for publicly traded companies. The major elements of the executive compensation packages consist of base salary, annual performance-based cash incentives, incentive stock options and a registered retirement savings plan contribution matching program. The Human Resources and Compensation Committee (the “Committee”) has the responsibility to annually review and recommend for approval by the Board, corporate goals and objectives relevant to the CEO’s compensation package, as well as review and approve the CEO’s compensation based on the Committee’s evaluation of the CEO’s performance. The Committee is also responsible to review, evaluate, and recommend compensation packages for (i) the directors of the Board, including the Chair of the Board (ii) each executive officer who reports to the CEO, and (iii) any other employee that the Committee determines appropriate from time to time.

~~The~~Base ~~net~~salary ~~loss~~has ~~reported~~been determined for each Named Executive Officer based upon individual performance and, in ~~the~~relation ~~six~~to ~~months~~comparable ~~ended~~positions ~~May 31~~within corporations of comparable size in similar industries. The compensation awarded to Kenneth Kirkpatrick, ~~2006~~President and CEO, John Sentjens, Vice President, Finance and Corporate Secretary, and Andrew Carniel, Vice President, Business Development was ~~largely~~determined ~~driven~~with reference to a report dated October 19, 2005, prepared by ~~lower~~Watson Wyatt ~~gross~~& Company in connection with an assessment of the salaries to be paid to senior management of ~~profit~~CHI ~~percentage~~Systems ~~driven~~Inc., a corporation of a size comparable to the Company which was acquired by the Company ~~mix~~in December of ~~contracts~~2005. ~~executed~~The inreport was based on a review of four published survey sources of compensation data for high tech companies. In electing to use that report, the ~~period~~Human Resources and Compensation ~~higher~~Committee ~~operating expenses~~noted ~~due~~that CHI Systems Inc. is of a comparable size to the ~~addition~~Company in terms of ~~costs~~revenues ~~from~~and ~~our~~total ~~acquired~~number ~~operations~~of employees, ~~product~~and ~~launch~~is ~~activities~~in a similar industry. Base salary levels are intended to attract and retain executives, anprovide fair and competitive compensation commensurate ~~increase~~to inan ~~staff~~executive’s experience, as well as to ~~support~~reward ~~our~~individual ~~growth~~performance ~~plans,~~and one’s achievement of objectives. Annual performance-based incentives are designed to encourage and aaward ~~negative~~improved performance ~~foreign~~from ~~exchange~~year ~~impact~~to year.

~~Backlog~~In 2007 the Board awarded the following bonuses to the Named Executive Officers in respect of the performance of the Company in the financial year ended November 30, 2006:

Total backlog is the sum of the firm and option backlogs. As at May 31, 2006, total backlog was $32.8 million compared to $17.5 million at May 31, 2005.


Kenneth Kirkpatrick	$	78,000
John Sentjens	$	39,000
Wayne Zachary	$	34,053
Andrew Carniel	$	33,000

~~Firm backlog consists of firm, fixed, or signed orders issued and executable subsequent to the~~11 ~~balance sheet date. Firm backlog as at May 31, 2006 was at $12.4 million compared to $6.6 million at May 31, 2005.~~

~~Option~~The ~~backlog~~compensation of Kenneth Kirkpatrick, the President and CEO, (who was appointed to those positions on November 7, 2005) consists of ~~unexercised~~the ~~contract~~same ~~options~~elements atas are included in the ~~balance~~compensation ~~sheet~~of other ~~date~~executive officers as described above and ~~indefinite-quantity~~ ~~contracts~~is ~~executable~~established ~~subsequent~~by tothe Board in consultation with the ~~balance~~Human ~~sheet~~Resources ~~date.~~and ~~Option~~Compensation ~~backlog~~Committee based on its opinion as atto a fair and reasonable ~~May 31~~compensation package, ~~2006~~taking ~~was~~into ataccount ~~$20.4 million~~his ~~compared~~contribution to ~~$10.9 million~~the atCompany’s ~~May 31~~performance, ~~2005~~long-term growth and corporate remuneration practices in Canada and abroad.

~~There~~The isCompany’s noexecutive ~~guarantee~~compensation orprograms ~~certainty~~are ~~that~~also ~~our~~designed ~~customers~~to ~~will~~attract ~~elect~~and toretain ~~exercise~~highly qualified ~~their~~senior ~~contract~~executives ~~option~~and recognize that long-term performance incentives are an integral ~~backlog.~~part ~~Should~~of ~~our~~aligning ~~customers~~the ~~elect~~interest toof ~~exercise~~executive ~~contract~~officers ~~options~~and orthe ~~place~~Company’s ~~orders~~shareholders. ~~against indefinite~~Long-~~quantity~~term incentives ~~contracts,~~are principally in the ~~option~~form ~~backlog~~of ~~converts~~stock tooptions. ~~firm~~When ~~backlog,~~determining ~~which~~whether ~~then~~and ~~may~~how ~~convert~~new stock tooptions ~~revenue~~are asto ~~contract~~be ~~execution~~granted, ~~occurs.~~the ~~Backlog~~Human ~~metrics~~Resources ~~are~~and ~~non-GAAP~~Compensation ~~measures.~~Committee ~~These~~considers ~~measures~~a donumber of ~~not~~factors ~~have~~including asalary, ~~standardized~~level ~~meaning~~of orresponsibility ~~comparable~~and ~~GAAP~~the ~~measure~~amount and ~~are~~terms ~~likely~~of ~~not~~outstanding ~~comparable~~stock options. Stock options to ~~similar~~executive officers are typically granted early in each fiscal year, vest ~~measures~~immediately, ~~presented~~and byexpire ~~other~~in ~~companies~~three to five years.

The ~~timing~~Company ofalso ~~major~~has ~~contracts~~in ~~award~~place ~~can~~a ~~significantly~~plan ~~impact~~for ~~our~~the ~~total~~executive ~~backlog~~officers ~~position~~ and ~~revenue.~~ ~~Historically,~~all ~~major~~other ~~contracts~~employees, ~~awarded~~including the ~~have~~Named ~~taken~~Executive upOfficers, towhereby ~~three~~the ~~years~~Company towill ~~finalize.~~pay ~~The contracting~~a ~~process~~maximum ~~involves~~of ~~lengthy~~4% ~~discussions~~of ~~and~~an ~~negotiations~~employee’s ~~with~~base salary ~~several~~earned ~~groups~~during ~~of people within~~ the ~~prospective~~year ~~customer’s~~to ~~organization.~~a Wedesignated ~~have~~registered ~~continually~~retirement ~~pursued~~savings plan, ~~and~~provided ~~will~~that ~~continue to~~the ~~pursue,~~employee ~~major~~matches ~~contracts~~such ~~with~~payment. ~~lengthy~~The ~~sales~~plan ~~cycles,~~is ~~and~~intended asto aencourage ~~result,~~employees ~~there~~to ~~could~~save befor ~~large variations~~their inretirement ~~our~~while ~~total~~providing ~~backlog~~an ~~and~~incentive ~~revenue~~package ~~from~~which ~~quarter~~is tocompetitive ~~quarter~~with those offered by similar companies.

~~Multi-year~~Submitted ~~contracts with government agencies have a termination-for-convenience clause because governments approve budget expenditures on an annual basis. This allows contracts to be terminated~~ by the ~~contracting~~Human ~~government~~Resources ~~agency~~and ~~should~~Compensation ~~future~~Committee ~~budget~~for ~~funding not be approved. Historically,~~ the ~~termination-for-convenience~~financial ~~clause~~year ~~has~~ended ~~not been exercised by any of our customers. We have~~November ~~included~~30, ~~the full value of these government contracts in total backlog.~~2006:

~~Revenue~~E. Brinton Coxe

			% of				% of
			total				total
Three months ended May 31	2006		revenue		2005		revenue		2006 to 2005
Marine systems	$	2,435,442		39.7	$	783,225		51.1	$	1,652,217
Land and air systems		2,370,117		38.6		—		—		2,370,117
Mapping		1,334,310		21.7		750,020		48.9		584,290
	$	6,139,869		100.0	$	1,533,245		100.0	$	4,606,624

Raymond W. Johnston

			% of				% of
			total				total
Six months ended May 31	2006		revenue		2005		revenue		2006 to 2005
Marine systems	$	3,717,882		37.9	$	2,367,597		70.2	$	1,350,285
Land and air systems		4,221,681		43.1		–		—		4,221,681
Mapping		1,863,057		19.0		1,003,532		29.8		859,525
	$	9,802,620		100.0	$	3,371,129		100.0	$	6,431,491

Walter P. Purio

~~Page~~STOCK 6PERFORMANCE ~~of 16~~GRAPH

~~Our~~The ~~core~~following ~~revenue~~graph ~~stream~~compares isthe ~~derived~~total ~~from~~cumulative ~~three~~shareholder ~~sources:~~return ~~marine~~for ~~systems,~~$100 ~~land~~invested ~~and~~in ~~air systems,~~the ~~and~~common ~~mapping.~~shares ~~Our land and air systems through our U.S. Systems operations delivered 43.1%~~ of ~~our revenue for~~ the ~~six~~Company ~~months~~traded ~~ended~~on ~~May 31, 2006. Our principal developed and manufactured product, ECPINS®, delivers~~ the ~~majority~~Toronto ofStock ~~the~~Exchange ~~marine~~(“TSX”) ~~systems~~with ~~revenue. We also derive revenue from~~ the ~~delivery~~ ofTSX ~~the ECPINS® software component of our system product. Combined, ECPINS® systems and~~S&P ~~software~~Composite ~~delivered~~Index ~~37.9%~~during ~~and 70.2% in~~ the ~~six~~period ~~months ended May~~December 311, ~~2006~~2000 ~~and~~through ~~2005~~November 30, ~~respectively~~2006.

~~Our results are primarily affected by the level, timing, and duration of customer orders and~~12 customer product delivery requirements. The main customers for our products and services in the first half of fiscal 2006 were U.S. Air Force, U.S. Army, U.S. Navy’s Naval Aviation, the Royal Australian Navy through Nautronix, and the Canadian Navy. Revenue from these customers accounted for 65.6% of the consolidated revenue. In the first half of fiscal 2005, the main customers for our products and services, accounting for 58.8% of the consolidated revenue, were the Royal Navy of the United Kingdom through Lockheed-Martin UK, the Royal New Zealand Navy through Air Affairs Ltd, and the Royal Australian Navy through Nautronix Ltd.

~~Revenue~~COMPENSATION byOF ~~Segment~~DIRECTORS

			% of				% of
			total				total
Three months ended May 31	2006		revenue		2005		revenue		2006 to 2005
International Systems operations	$	2,435,442		39.7	$	783,225		51.1	$	1,652,217
U.S. Systems operations		2,370,117		38.6		—		—		2,370,117
Mapping operations		1,334,310		21.7		750,020		48.9		584,290
	$	6,139,869		100.0	$	1,533,245		100.0	$	4,606,624

Cash Compensation

			% of				% of
			total				total
Six months ended May 31	2006		revenue		2005		revenue		2006 to 2005
International Systems operations	$	3,717,882		37.9	$	2,367,597		70.2	$	1,350,285
U.S. Systems operations		4,221,681		43.1		—		—		4,221,681
Mapping operations		1,863,057		19.0		1,003,532		29.8		859,525
	$	9,802,620		100.0	$	3,371,129		100.0	$	6,431,491

During the fiscal year ended November 30, 2006, each member of the Board of Directors of the Company who was not an employee of the Company was entitled to receive $1,500 for each Board meeting attended in person, and $1,000 for each Board meeting which was held by means of telephone conference call if of significant length or involving significant preparation. Canadian directors are paid in Canadian funds and all other directors are paid in U.S. funds. During the fiscal year, the Board held four face-to-face meetings and six telephone conference call meetings. The directors as a group were paid an aggregate of approximately $56,540 for attending or participating in these meetings. In addition, the Chair of the Board was paid an annual retainer of $50,000. Each of the remaining directors was paid an annual retainer of $15,000. The Audit Committee chair was paid an annual retainer of $10,000 and the Human Resources and Compensation Committee chair was paid an annual retainer of $5,000. Members of the Audit Committee, members of the Human Resources and Compensation Committee and members of the Executive Committee were paid $1,500 for each committee meeting attended. Members of the Committees were paid a total of approximately $47,364 for attending or participating in a total of ten Committee meetings.

~~Revenue~~Stock ~~from the International Systems operations for the three and six months ended May 31,~~Options ~~2006 increased 210.9% and 57.0% respectively due to the timing of new contracts awarded, the delivery schedules of existing contracts and the mix of products and services delivered.~~

~~Revenue~~The ~~from~~following ~~the~~directors ~~U.S.~~received ~~Systems~~stock ~~operations~~options ~~has~~under nothe ~~comparatives~~Company’s as1998 ~~this~~stock ~~revenue~~option ~~comes~~plan ~~from~~in ~~CHI Systems~~their ~~Inc.,~~capacity ~~which~~as ~~was~~a ~~acquired~~director ~~December~~during the financial year ended November 1530, ~~2005.~~2006:

Revenue from our Mapping operations for the three and six months ended May 31, 2006 as compared to the three and six months ended May 31, 2005 increased 77.9% and 85.6% respectively primarily the result of changes in our strategy implemented to improve our market position in the U.S. through the acquisition of a U.S. land mapping company based in Salt Lake City, Utah.


			Market Value of
			Securities
		Exercise or Base	Underlying Options
	Securities Under	Price of	on the Date of Grant
Name of Director	Options Granted (#)	($/Security)	($/Security)	Expiration Date
Raymond W. Johnston ⁽¹⁾	25,000	$0.73	$0.73	April 12/11
Walter P. Purio	25,000	$0.73	$0.73	April 12/11
Helmut F. Lobmeier	25,000	$0.73	$0.73	April 12/11
E. Brinton Coxe	25,000	$0.73	$0.73	April 12/11
Gerald J. Shields	25,000	$0.73	$0.73	April 12/11
Donald W. Young	3,750 45,000	$0.73 $0.73	$0.73 $0.73	March 15/11 April 12/11
Joseph A. Stroud	3,750 45,000	$0.73 $0.73	$0.73 $0.73	March 15/11 April 12/11

~~We continue to invest significant corporate, sales, and marketing resources in identifying and~~Notes: ~~pursuing new opportunities and contracts, both in our existing customer base and with new prospective customers.~~

~~Page~~(1) 7Mr. Johnston serves as the Chair of 16 the Board of Directors

~~Gross~~Fees ~~Profit~~for Services as Consultants or Advisors

Three months ended May 31	2006			2005			2006 to 2005
Gross profit	$	2,594,972		$	316,677		$	2,278,295
Gross profit percentage		42.3	%		20.6	%		21.7	%

During fiscal 2006 the Company engaged the services of a law firm of which Gerald Shields, a director, had an interest. The Company paid to that law firm a total of $202,954 in legal fees, disbursements and taxes during the fiscal year. The law firm provided legal services as well as general corporate and securities law services. Fees paid to that law firm in the prior year were $165,935. As of November 17, 2006, Mr. Shields no longer has an interest in any law firm that provided legal services to the Company.

Six months ended May 31	2006			2005			2006 to 2005
Gross profit	$	3,788,678		$	1,321,793		$	2,466,885
Gross profit percentage		38.6	%		39.2	%		(0.6	)%

~~Gross~~SECURITIES ~~profit~~AUTHORIZED ~~increased~~FOR ~~over~~ISSUANCE ~~eight~~UNDER ~~times~~EQUITY inCOMPENSATION ~~the three months ended May 31, 2006 compared to the~~PLANS three months ended May 31, 2005 and the gross profit percentage was 21.7% higher period-over-period. Gross profit increased by 186.6% in the six months ended May 31, 2006 compared to the six months ended May 31, 2005 while the gross profit percentage was 0.6% lower period-over-period. The reduced gross profit percentage compared to the prior six month period is due to higher software sales realized in the second quarter of fiscal 2006 in combination with the addition of lower margin revenue in our acquired operations.

~~Gross~~The ~~Profit~~only compensation plans under which equity securities of the Company are authorized for issuance are the three Stock Option Plans of the Company, all of which have been approved by ~~Segment~~the shareholders. The following table sets out a summary of the number of securities to be issued upon the exercise of outstanding options as at the Company’s year-end of November 30, 2006.

Three months ended May 31	2006			2005			2006 to 2005
	Number of Securities to beIssued Upon Exercise ofOutstanding Options,Warrants and Rights			Weighted-Average ExercisePrice of OutstandingOptions, Warrants andRights			Number of SecuritiesRemaining Available forFuture Issuance UnderEquity Compensation Plans(Excluding SecuritiesReflected inColumn (a))
Gross profit:
Plan Category		(a)			(b)			(c)
International Systems operations	$	1,614,222		$	93,515		$	1,520,707
Equity compensation plans approved by securityholders		3,417,584			$0.95			946,910
U.S. Systems operations		544,238			—			544,238
Equity compensation plans not approved by securityholders		0			0			0
Mapping operations		436,512			223,162			213,350
Total		3,417,584			$0.95			946,910
	$	2,594,972		$	316,677		$	2,278,295
Gross profit percentage:
International Systems operations		66.3	%		11.9	%		54.4	%
U.S. Systems operations		23.0	%		—			23.0	%
Mapping operations		32.7	%		29.8	%		2.9	%
		42.3	%		20.6	%		21.7	%

Six months ended May 31	2006			2005			2006 to 2005
Gross profit:
International Systems operations	$	2,292,925		$	1,073,096		$	1,219,829
U.S. Systems operations		967,280			—			967,280
Mapping operations		528,473			248,699			279,774
	$	3,788,678		$	1,321,795		$	2,466,883
Gross profit percentage:
International Systems operations		61.7	%		45.3	%		16.4	%
U.S. Systems operations		22.9	%		—			22.9	%
Mapping operations		28.4	%		24.8	%		3.6	%
		38.6	%		39.2	%		(0.6	)%

CORPORATE GOVERNANCE

~~Gross~~Board ~~profit~~of ~~from the International Systems operations increased over 17 times and gross~~Directors profit percentage was 54.4% higher for the three months ended May 31, 2006 when compared to the same period last year. Gross profit increased 113.7% for the six months ended May 31, 2006 compared to the

~~Page~~As 8of the date of 16this Information Circular, the directors of the Company are Raymond Johnston, Kenneth Kirkpatrick, Brinton Coxe, Helmut Lobmeier, Walter Purio, Gerald Shields, Joseph Stroud and Donald Young. Messrs. Johnson, Lobmeier, Purio Shields, Stroud and Young are independent directors, while Messrs. Kirkpatrick and Coxe are not independent.

~~six~~A ~~months~~member ~~ended~~of ~~May~~the Board is considered not to be “independent” if he or she has a direct or indirect “material relationship” with the Company as set out in Section ~~31,~~1.2 ~~2005~~of National Instrument 58-101. Mr. Kirkpatrick ~~The~~is ~~increases~~not ~~are~~an ~~the~~independent ~~result~~director inasmuch as he serves as President and CEO of ~~higher~~the Company. ~~revenues~~Mr. Coxe inis not an independent director due to the fact that the Company paid him fees for ~~International Systems~~providing ~~operations~~advisory inservices ~~second~~to ~~quarter~~the ~~and~~Company during the ~~first~~financial ~~six~~year ~~months~~ended ofNovember 30, ~~fiscal~~2005. Directors ~~2006~~who ~~and~~have an ~~increase~~interest in ~~our high~~a ~~margin~~transaction ~~software~~involving ~~revenue~~the ~~compared~~Company are required to ~~the~~declare ~~first~~such interests ~~six~~and ~~months~~abstain offrom ~~fiscal~~voting ~~2005~~on any resolution respecting the transactions.

~~Gross~~The ~~profit~~following ~~from~~directors of the ~~U.S.~~Company ~~Systems~~are ~~operations~~currently ~~did~~directors ~~not~~of ~~exist~~other ~~for~~reporting ~~the~~issuers ~~six~~as ~~months ended May 31, 2005~~noted asopposite ~~CHI~~their ~~Systems was acquired in the current period.~~names:

~~Gross~~Name ~~profit~~Name from the Mapping operations for the three months ended May 31, 2006 increased 95.6% compared to the same period last year. Gross profit for the six months ended May 31, 2006 increased 112.5% compared to the same period last year. The increases are the result of ~~our~~Reporting ~~successful entrance~~Issuers ~~into~~Gerald ~~the U~~J.S. ~~mapping~~Shields ~~market~~Rainy ~~through~~River ~~the~~Resources ~~acquisition of Mapcon Mapping~~Ltd. ~~Gross~~Heartland ~~profit percentage~~Resources ~~increased 2~~Inc.9% ~~and 3~~E.6% ~~period~~Brinton ~~over~~Coxe ~~period~~InNexus ~~respectively,~~Biotechnology ~~consistent with the mix of contracts in the business unit~~Inc.

~~Operating Expenses~~14

			% of					% of
			total					total
Three months ended May 31	2006		revenue			2005		revenue			2006 to 2005
General and administrative	$	1,514,184		24.7	%	$	836,773		54.6	%	$	677,411
Research and development		450,592		7.3	%		372,761		24.3	%		77,831
Sales and marketing		605,817		9.9	%		543,530		35.4	%		62,287

During the course of meetings of the Board of Directors, the Board regularly holds in-camera sessions at which members of management, including Mr. Kirkpatrick, the President and CEO, are excused. The independent directors do not regularly hold meetings consisting only of the independent directors due to the size of the board.

			% of					% of
			total					total
Six months ended May 31	2006		revenue			2005		revenue			2006 to 2005
General and administrative	$	2,859,976		29.2	%	$	1,678,981		49.8	%	$	1,180,995
Research and development		992,859		10.1	%		633,270		18.8	%		359,589
Sales and marketing		1,158,039		11.8	%		992,314		29.4	%		165,725

Mr. Johnston, who serves as Chair of the Board (which is not a full-time position), is an independent director. The responsibilities of the Chair include ensuring that the Board discharges its obligations, understands the boundaries between the responsibilities of the Board and those of management, ensuring that all Board meetings are run in an orderly manner, assisting and scheduling Board meetings, ensuring that the Board complies with the Company’s Corporate Governance Policies, ensuring that the Board meets on a regular basis without management.

~~General~~From ~~and~~December 1, ~~administrative~~2005 ~~(“G&A”)~~to ~~expenses~~November 30, ~~consist~~2006, ~~mainly~~the ofBoard ~~salaries~~held four face-to-face meetings and ~~benefits~~six meetings by way of ~~management~~ ~~and~~telephone ~~administrative~~conference ~~personnel,~~call. ~~professional~~All ~~fees,~~of ~~public~~the ~~company~~current ~~expenses,~~directors ~~related facility~~participated ~~costs,~~in ~~and~~all ~~other~~of the ~~general~~meetings ~~administrative~~except ~~expenses~~Mr. Purio, ~~and~~who ~~other~~missed ~~income~~one conference call meeting.

~~G&A~~Board ~~increased by 80.9% for the three months ended May 31, 2006 and by 70.3% for six months ended May 31, 2006 compared to the same periods last year. As a percentage~~ of ~~revenue,~~Directors’ ~~G&A was lower~~Mandate 29.9% and 20.6% respectively when compared to the same periods last year. The dollar increases for the second quarter of 2006 over the second quarter of 2005, and the first six months of 2006 over first six months of 2005 are the result of the addition of our U.S. Systems operations and the increase of staff to support our growth plans.

~~Research~~The ~~and~~Board ~~development~~of ~~(“R&D”)~~Directors’ ~~expenses~~mandate ~~consist~~is ~~mainly~~published ofon ~~salaries~~the ~~and~~Company’s ~~benefits~~website ofat ~~software~~www.osigeospatial.com. ~~and~~A ~~hardware~~true ~~engineering~~copy ~~personnel,~~of ~~sub-contractor~~the ~~costs,~~Board’s ~~facilities~~mandate ~~expenses,~~is ~~and~~attached ~~related~~as ~~expenses.~~Schedule A ~~We expense~~to ~~research~~this ~~and~~Information ~~development costs in the period incurred~~Circular.

~~R&D~~Position ~~costs increased by 20.9% for the three months ended May 31, 2006 and by 56.8% in the six months~~Descriptions ended May 31, 2006 compared to the same periods last year. The increases are related to higher staff levels and expenses for new product activities for the six months ended May 31, 2006 and approximately $200,000 in engineering labor costs charged to cost of sales from R&D for the six months ended May 31, 2005 compared to the six months ended May 31, 2006, where there were no costs similarly charged. These engineering labor costs are to support the needs of specific customer orders. We believe that in order to maintain our technological leadership, we must continue to develop existing products and introduce innovative new products that challenge and redefine the industry standards.

~~Sales~~The ~~and~~Board ~~marketing~~has ~~(“S&M”)~~developed ~~expenses~~a ~~consist~~written ~~primarily~~position description for the Chair. The Board has not developed written position descriptions for the Chairs of ~~compensation~~any of ~~sales~~the ~~and~~Board ~~marketing~~committees. However, by Company ~~personnel~~practice, asthe ~~well~~Chair asof ~~expenses~~each ~~associated~~committee is charged with ~~advertising,~~the ~~trade~~responsibility ~~shows,~~of ~~facilities,~~scheduling committee meetings and ~~other~~putting forth the proposed agenda for the meetings, ensuring that the committee ~~expenses~~fulfils ~~related~~its tomandate as set out in the ~~sales~~Company’s ~~and~~Corporate ~~marketing~~Governance Policy, ensuring that proper minutes of ~~our~~the ~~products~~meetings are taken and ~~services~~preparing and submitting reports to the Board respecting the proceedings of the committees.

~~Page~~The 9Company ofhas 16developed, and the Board has approved, a written position description for the CEO.

~~S&M~~Orientation ~~expenses increased by 11.5% for the three months ended May 31, 2006~~ and byContinuing ~~16.7% in the six~~Education months ended May 31, 2006 compared to the periods in fiscal 2005. The increases in S&M expenses are primarily due to the addition of our U.S. Systems operations. We believe our current level of S&M staff continues to allow us to pursue business development activities relating to our expansion efforts targeting new and existing customers in the military agencies of Canada, the U.S., European NATO, and other allies of Canada, and national and international commercial marine transportation companies. To increase our profile and our products, and to broaden our customer base in international markets, we have established marketing agreements with companies local to the targeted regions. Some of these activities may not result in closing orders during the current year but may yield orders in subsequent fiscal years.

~~Depreciation~~New directors are given extensive briefings by the Chair of the Board, the CEO, and ~~Amortization~~other members of senior management with respect to the business and operations of the Company, and they make an on-site visit to the Company’s headquarters. New directors are also provided with a record of public and other pertinent information concerning the Company, as well as a corporate manual. Directors are provided with summaries of developments and regulatory amendments to corporate governance policies on an ongoing basis. At the last Board meeting of each year a proposed schedule for Board meetings for the forthcoming year is presented, and the time commitment required of the Board and committee members is reviewed to ensure that all directors and committee members are made aware of what is expected of them.

Three months ended May 31		2006				2005				2006 to 2005
Depreciation and amortization		$	137,878			$	63,712			$	74,166

Ethical Business Conduct

Six months ended May 31		2006				2005				2006 to 2005
Depreciation and amortization		$	269,905			$	107,478			$	162,427

The Company has adopted a Code of Ethics for Directors and Senior Officers (the “Code”) which has been distributed to them, as well as a Code of Ethics for Employees which has been distributed to all directors, officers, employees and consultants. Copies of the Code are available from the Company on written request and are available for viewing on www.sedar.com and the Company’s investor website at www.osigeospatial.com. If a person knows or suspects a violation of the Code to which he or she is subject, that person must immediately report the alleged violation to the Chair of the Board or, if he or she is not available, then the Chair of the Audit Committee. In addition, the Board has adopted a

~~Total depreciation and amortization increased 116.4% for the three months ended May 31, 2006~~15 and 151.1% in the six months ended May 31, 2006 over the same periods for fiscal 2005 reflecting our U.S. acquisition in the period, the mix of plant and equipment at May 31, 2006, and the amortization of intangibles related to our U.S. acquisitions. For the six months ended May 31, 2006 and 2005, a portion of the depreciation, $120,051 and $56,546 respectively, was included in cost of sales for equipment used in revenue-generating activities.

~~Interest~~whistle ~~expense~~blower policy for directors, officers and employees and a whistler blower policy for third parties (i.e. persons who are not employed by the Company) which permit people to anonymously report unethical conduct concerning directors, officers and employees of the Company.

Three months ended May 31		2006				2005				2006 to 2005
Interest expense		$	6,218			$	6,950			$	(732	)

Nomination of Directors

Six months ended May 31		2006				2005				2006 to 2005
Interest expense		$	12,264			$	17,234			$	(4,970	)

Due to the relatively small size of the Board, the Board does not have a nominating committee; rather, the Board as a whole assumes responsibility to assess and make recommendations regarding Board effectiveness and to establish a process for identifying, recruiting, appointing, re-appointing, and providing ongoing education and development for directors.

~~Interest expense decreased in the first six months of fiscal 2006 over the first six months of~~Compensation ~~fiscal 2005 as the result of the company not utilizing our operating line credit facility of $2.0 million.~~

~~Interest~~The ~~income~~Human Resource and Compensation Committee is mandated to review, and recommend to the Board for approval, the remuneration of senior management and directors. Compensation is reviewed not less than annually. The Human Resource and Compensation Committee and the Board consider responsibilities, risks, time commitment, and comparative remuneration in determining compensation.

Three months ended May 31		2006				2005				2006 to 2005
Interest income		$	6,849			$	31,347			$	(24,498	)

The Human Resources and Compensation Committee retained the firm of Watson Wyatt & Company to prepare a survey of compensation in connection with the consideration of compensation set for John Sentjens, Vice President, Finance and Corporate Secretary, and Andrew Carniel, Vice President, Business Development. Watson Wyatt was mandated to provide salary ranges for senior executives holding those positions in companies of comparable size in the high tech industry. See “Report on Executive Compensation” for further particulars.

Six months ended May 31		2006				2005				2006 to 2005
Interest income		$	19,683			$	31,437			$	(11,754	)

The Human Resources and Compensation Committee set Mr. Kirkpatrick’s compensation in those capacities with reference to the report received from Watson Wyatt & Company referred to above.

~~Interest~~Other ~~income~~Board ~~decreased in the first six months of fiscal 2006 as the result of the company~~Committees ~~having surplus cash for the period after the Preferred Share financing closed on April 11, 2005 until the acquisition of CHI Systems on December 14, 2005.~~

~~Page~~In 10addition to the Audit Committee and the Human Resources and Compensation Committee, the Board has one other standing committee, namely the Executive Committee. The responsibilities of 16the Executive Committee are to:

~~Foreign~~(a) ~~Exchange~~ recommend corporate governance procedures; (b) define limits of management’s responsibilities; (c) assist the Board in identifying new directors for nomination to the Board and to assess directors on an ongoing basis; (d) oversee the adequacy of operating capital to implement the Company’s business plan; (e) approve the engagement of individual directors of outside advisors at the Company’s expense at appropriate circumstances; and (f) oversee the Company’s activities in the area of investor relations and relations with the capital markets.

Three months ended May 31		2006				2005				2006 to 2005
Foreign exchange loss (gain)		$	(21,147	)		$	62,307			$	(83,454	)

Assessments

Six months ended May 31		2006				2005				2006 to 2005
Foreign exchange loss (gain)		$	267			$	24,328			$	(24,061	)

Pursuant to the Company’s Board of Directors’ Mandate, attached as Schedule “A” to this Information Circular, the Board is responsible for annually assessing the effectiveness of the Board as a whole, its committees and the contributions of individual directors.

~~Foreign exchange loss is the result of exchange rate movements of the Australian dollar and~~16 ~~our Canadian dollar exposure which were not in the company’s favor during the six months ended May 31 2006, as compared to the six months ended May 31, 2005.~~

~~Technology~~AUDIT ~~Partnerships~~COMMITTEE ~~Canada~~AND RELATIONSHIP WITH AUDITOR

Three months ended May 31	2006			2005			2006 to 2005
Royalty	$	107,668		$	30,459		$	77,209
Contribution		(293,372	)		(378,386	)		85,014

Pursuant to Multilateral Instrument 52-110 Audit Committees, the Company has provided disclosure with respect to its Audit Committee in the Company’s annual information form. Please refer to the annual information form for this information. The annual information form is available on SEDAR at www.sedar.com.

Six months ended May 31	2006			2005			2006 to 2005
Royalty	$	164,572		$	74,861		$	89,711
Contribution		(503,840	)		(594,399	)		90,559

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

~~The~~None ~~company~~of ~~has~~the ~~entered~~directors ~~into~~or ~~two~~executive ~~agreements~~officers ~~with~~of ~~Technology~~the ~~Partnerships~~Company ~~Canada~~was ~~(“TPC”) whereby~~indebted ~~TPC~~to ~~granted~~the ~~financial~~Company ~~assistance~~at ~~for~~any time during the ~~purpose~~financial ofyear ~~funding~~ended ~~research~~November 30, ~~and~~2006. ~~development activities~~The toCompany bedoes ~~completed~~not onhave orany ~~before~~programs ~~March 31,~~under which ~~2007.~~it ~~The~~loans ~~contributions~~money weto ~~received~~directors ~~are~~or ~~based~~executive ~~on the~~officers ~~eligible~~to ~~expenditures~~purchase wesecurities ~~make~~of ~~during~~the ~~each period~~Company.

WeINTEREST ~~are~~OF ~~required~~INFORMED toPERSONS ~~pay~~IN aMATERIAL ~~royalty of 3% on annual gross revenue in our subsidary Offshore Systems~~TRANSACTIONS Ltd. for the period December 1, 1999 to November 30, 2008. In addition, we are required to pay a royalty of 1.4% on annual gross revenue in our subsidary Offshore Systems for the period January 1, 2006 to December 31, 2008 and a royalty of 2.5% on annual gross revenue for the period January 1, 2009 to December 31, 2013.

~~Income~~Other ~~Taxes~~than as set forth in this or any previous Information Circular, and other than transactions carried out in the normal course of business of the Company or any of its affiliates, none of the directors or senior officers of the Company, any member beneficially owning shares carrying more than 10% of the voting rights attached to the shares of the Company, nor an associate of affiliate of any of the foregoing persons, had since December 1, 2005, being the date of commencement of the Company’s last completed financial year, any material interest, direct or indirect in any transactions which materially affected the Company or in any proposed transaction which has or would materially affect the Company.

Three months ended May 31	2006			2005		2006 to 2005
Deferred income tax recovery	$	(23,321	)	$	113,378	$	(136,699	)
Current income tax expenses		119,441			66,587		52,854

APPOINTMENT OF AUDITOR

Six months ended May 31	2006			2005			2006 to 2005
Deferred income tax recovery	$	(7,594	)	$	(94,440	)	$	(86,846	)
Current income tax expenses		93,706			82,116			11,590

Ernst & Young LLP, Chartered Accountants, of 700 West Georgia Street, 23^rd Floor, Vancouver, British Columbia, V7Y 1C7 will be nominated at the meeting for reappointment as auditor of the Company at a remuneration to be fixed by the directors. Ernst & Young LLP, was first appointed auditor on April 17, 2003.

~~Based~~MANAGEMENT ~~on the information available at the time of the issue of the audited annual financial~~CONTRACTS statements for the year ended November 30, 2005, we estimated that we would not have sufficient taxable earnings in Canada in future periods to utilize a portion of our Canadian approximately $5 million non-capital losses carried forward and other Canadian tax balances. We have recognized deferred tax recovery in the six months ended May 31, 2006 related to year-to-date losses recognized and temporary timing differences between accounting income and income for tax purposes in our U.S. subsidiaries as we believe that it is more likely than not that these differences will be realized in the current fiscal year. In accordance with U.S. GAAP, we provided a valuation allowance against deferred tax assets where realization did not meet the requirements of “more likely than not” under the liability method of tax allocation. We continue to evaluate our taxable position quarterly and consider factors such as estimated taxable income, the history of losses for tax purposes, and the growth of the Company, among others.

~~Page~~Management 11services for the Company are not, to any material degree, performed by persons other than the directors and executive officers of 16the Company.

~~LIQUIDITY~~PARTICULARS ~~AND~~OF ~~CAPITAL~~MATTERS ~~RESOURCES~~TO BE ACTED UPON

	May 31, 2006		November 30, 2005		2006 to 2005
Cash	$	1,419,553	$	8,222,225	$	(6,802,672	)
Current assets		10,645,283		19,300,976		(8,655,693	)
Current liabilities		3,954,560		4,056,287		(101,727	)
Working capital (1)		6,690,723		15,244,689		(8,553,966	)

Restated Shareholder Rights Plan

~~(1) Working capital is defined as current assets less current liabilities. Working~~Introduction ~~capital does not have a standardized meaning or comparable measure under generally accepted accounting principles and may not be comparable to similar measures presented by other companies.~~

WeOn ~~strive~~April 19, to2001, ~~maintain~~the ~~cash-contributing~~Board ~~profitable~~of ~~operations~~Directors ~~that~~of ~~provide~~the anCompany ~~adequate liquidity~~adopted ~~and~~the ~~capital~~Shareholder ~~resource~~Rights ~~base~~Plan ~~for~~(the “2001 ~~growth~~Rights Plan”). WeThe ~~believe~~2001 ~~that~~Rights ~~cash~~Plan ~~flow~~was ~~from~~approved ~~operating~~by the Toronto Stock Exchange (the “TSX”) ~~activities,~~as ~~together~~well ~~with~~as ~~line~~confirmed ofby ~~credit~~the ~~borrowings~~shareholders of $2the Company at an annual and special meeting in April 2001.0 On April ~~million~~24, ~~available~~2004 ~~under~~the ~~our~~shareholders ~~revolving~~of the Company voted in favour of the continued existence ~~credit~~of ~~facilities~~the Rights Plan until the close of business on April 19. 2007 Since the 2001 Rights Plan was implemented, ~~will~~the beCompany ~~sufficient~~changed toits ~~fund~~name ~~currently~~and ~~anticipated~~its ~~working~~authorized share capital,. ~~planned~~The provincial ~~capital~~corporate ~~spending,~~legislation that governs the Company and ~~debt~~securities ~~service~~laws ~~requirements~~relating ~~for~~to ~~the~~take ~~next~~over ~~12 months~~bids have also changed since 2001. WeAs ~~expect~~a ~~cash~~result ~~flow~~of ~~from~~these changes, the Board of Directors has adopted an ~~operations~~amended and restated shareholder rights plan (the “Rights Plan”). Shareholders will ~~continue~~be asked to consider ~~improve~~a ~~for~~resolution ~~the~~approving, ~~remainder~~ratifying ofand confirming the ~~year~~Rights asPlan ~~scheduled~~and ~~contract~~all ~~milestone~~rights (the ~~payments~~“Rights”) ~~will~~issued bepursuant ~~made~~to onthe ~~several~~Rights ~~contracts~~Plan. The ~~expenditures~~Rights ~~associated~~Plan ~~with~~is ~~these~~similar ~~contracts~~to ~~have~~plans adopted by other ~~been~~Canadian ~~incurred~~companies inand ~~prior~~approved ~~periods~~by their shareholders. With the exception to amendments to change the

~~At May 31, 2006 our current assets and working capital decreased primarily due to the acquisition~~17 ~~of our U.S. Systems operations.~~

Wename ~~have credit facilities consisting~~ of anthe ~~operating line~~Company, ~~standby~~reducing ~~letters~~the ofredemption ~~credit,~~price ~~and~~to ~~forward exchange contract facilities~~$0.0001 ~~The~~per ~~credit~~right, ~~facilities~~adding ~~permit~~rights usattaching to the ~~borrow~~Company’s ~~funds~~Class A ~~directly~~Series A ~~for~~Shares ~~general corporate~~the ~~purposes,~~Class B ~~including~~Series 1 ~~acquisitions,~~Preference atShares ~~floating~~and ~~rates.~~the ~~At May~~Class ~~31,~~B ~~2006, we had no~~Series ~~borrowings~~2 ~~against~~Shares, ~~our~~changing ~~Canadian~~the orexpiry ~~U.S. dollar operating line. We have an operating line~~ of ~~$2.0 million~~a ~~available~~take ~~with~~over abid ~~Canadian~~to ~~chartered~~35 days ~~bank~~from ~~collateralized~~21 days bymaking ~~accounts~~some ~~receivable. During~~typographical ~~fiscal 2005~~changes, ~~we utilized~~ the ~~facility~~Rights ~~which~~Plan ~~increased~~is ~~interest~~in ~~expense for~~ the ~~year.~~same ~~There~~form ~~were~~as ~~no borrowings in~~ the ~~six~~2001 ~~months~~Rights ~~ended May 31, 2006~~Plan. WeThe ~~had~~Rights ~~issued~~Plan ais ~~standby~~subject to ~~letter~~the approval of ~~credit~~the ~~totaling Australian~~TSX ~~$283,886~~as ~~during~~well ~~fiscal~~as ~~2005.~~confirmation Weby ~~had utilized~~ the ~~standby~~shareholders ~~letter~~ of ~~credit~~the toCompany ~~support~~at the ~~certain~~Meeting. ~~performance~~Shareholders ~~obligations~~will tobe ~~our~~asked ~~customers.~~to ~~This~~consider ~~standby~~a ~~letter~~resolution ofapproving, ~~credit~~ratifying ~~has~~and ~~since been~~confirming ~~cancelled.~~the WeRights ~~utilize~~Plan ~~our~~and ~~forward~~all ~~exchange~~rights ~~contract~~(the ~~facility~~“Rights”) toissued ~~reduce~~pursuant ~~our exposure~~ to ~~exchange rate~~the ~~movements~~Rights Plan.

~~Cash~~A ~~Flows~~true copy of the agreement which gives effect to the Rights Plan (the “Rights Agreement”) may be reviewed by shareholders of the Company at the Company’s registered and records office at Suite 800, 885 West Georgia Street, Vancouver, British Columbia, V6C 3H1 during normal business hours and can be found on SEDAR at www.sedar.com.

Three months ended May 31	2006			2005			2006 to 2005
Cash flows provided by (used in):
Operating activities	$	1,021,472		$	1,212,439		$	(190,967	)
Investing activities		(293,083	)		(1,227,674	)		934,591
Financing activities		(519,926	)		10,924,510			11,444,436
Exchange impact on acquired cash balances		62,209			(243,712	)		305,921

Directors’ Recommendation

Six months ended May 31	2006			2005			2006 to 2005
Cash flows provided by (used in):
Operating activities	$	1,929,751		$	588,324		$	1,341,427
Investing activities		(8,332,982	)		(1,260,880	)		(7,072,102	)
Financing activities		(519,926	)		11,297,947			(11,817,873	)
Exchange impact on acquired cash balances		120,484			(171,500	)		291,984

The Board of Directors has unanimously determined that the Rights Plan is in the best interests of the Company and its shareholders and recommends that shareholders vote in favour of the Rights Plan.

~~Cash~~Background ~~flows~~and ~~provided~~Purpose ~~by operating activities for the six months ended May 31, 2006, were the result~~ of the ~~decrease~~Rights ~~in accounts receivable offset by the loss for the six months ended May 31,~~Plan 2006 and a decrease in accounts payable and accrued liabilities. Cash flows provided by operating activities for the three months ended May 31, 2006 were the result of a decrease in accounts payable and non-cash income statement items.

~~Page~~The 12objectives of 16the Rights Plan are to ensure, to the extent possible, that all shareholders of the Company are treated equally and fairly in connection with any take-over offer for the Company. Take-over offers may not always result in shareholders receiving equal or fair treatment or full value for their investment. In addition, current Canadian securities legislation only requires a take-over offer to remain open for 35 days. The Board believes that this period may be insufficient for the shareholders to evaluate a bid, or for the Board to pursue alternatives which could maximize shareholder value, and make informed recommendations to shareholders.

~~Cash~~The ~~flows~~Rights ~~used~~Plan inis ~~investing~~designed ~~activities~~to discourage discriminatory or unfair take-over offers for the ~~six~~Company and ~~months~~gives ~~ended~~the ~~May 31~~Board time, ~~2006~~if ~~were~~appropriate, ~~primarily~~to pursue alternatives to maximize shareholder value in ~~reflective~~the event of ~~our~~an ~~U.S.~~unsolicited ~~systems~~Take-over ~~acquisition~~Bid asfor ~~well~~the asCompany. ~~the~~The ~~acquisitions~~Rights ofPlan ~~plant,~~will ~~equipment~~encourage ~~and~~an ~~intangibles~~Offeror ~~commensurate~~to ~~with~~proceed ~~our~~by ~~plans~~way of a Permitted Bid or to ~~obtain~~approach ~~additional~~the ~~systems~~Board ~~and~~with ~~facilities~~a view to ~~accommodate~~negotiation by ~~our~~creating ~~current~~the ~~and~~potential ~~future~~for ~~anticipated~~substantial ~~growth.~~dilution ~~Cash~~of ~~flows~~the ~~used~~Offeror’s inposition. ~~investing~~The ~~activities~~Permitted ~~for~~Bid provisions of the ~~three months~~Rights ~~ended~~Plan ~~February 28~~are designed to ensure that, ~~2005~~in ~~were~~any ~~the~~Take-over ~~result~~Bid, ofall ~~acquisitions~~shareholders are oftreated ~~plant~~equally, ~~equipment~~receive the maximum value for their investment and ~~intangibles~~are given adequate time to properly assess the Take-over Bid on a fully informed basis.

~~Cash~~The ~~flows~~Rights ~~used~~Plan was not adopted in ~~financing~~response ~~activities~~to, ~~for~~or in anticipation of, any acquisition or take-over offer. Furthermore, in adopting the ~~three~~Rights ~~and~~Plan, ~~six~~the ~~months~~Board ~~ended~~does ~~May 31~~not intend to prevent a take-over of the Company, ~~2005~~to ~~were~~secure continuance of current management or the directors in office or to deter ~~result~~fair offers for the voting shares of ~~Class B~~the ~~preference~~Company. ~~share~~The ~~dividends~~Rights Plan may, however, increase the price to be paid by a potential Offeror to obtain control of the Company and may discourage certain transactions, including a Take-over Bid for less than all the voting shares of the Company. Accordingly, the Rights Plan may deter some Take-over Bids.

AsThe aRights ~~result~~Plan ofis ~~the~~not ~~above~~intended ~~mentioned changes~~to, ~~cash~~and ~~decreased~~ultimately bydoes $6not,~~802,672~~ deter full and fair offers for the shares ~~six~~of ~~months~~the ~~ended~~Company. The Rights Plan does not impose any additional burden on the Company’s ~~May 31,~~operations ~~2006~~or financial capacity. ~~For~~The adoption of the ~~three~~Rights ~~months~~Plan ~~ended~~will ~~May 31,~~not ~~2006,~~in any way lessen or affect the duty of the Board to act honestly and in good faith with a ~~$62,209~~view ~~foreign~~to ~~exchange~~the ~~benefit~~best ~~was~~interests of ~~realized~~the Company and ~~cash~~its ~~increased $270,672~~shareholders.

~~There~~In ~~can~~recent beyears, nounsolicited ~~assurance~~bids ~~that~~were wemade ~~will~~for ~~have~~the ~~adequate~~shares ~~financial~~of ~~resources,~~a ~~financing,~~number orof ~~cash~~Canadian ~~flows~~public tocompanies. ~~support~~Most ~~the~~of ~~company~~these ~~into~~companies had shareholder rights plans which were used by the ~~future.~~target’s Board of

~~Contractual Obligations~~18

			Payments due by period
			Less
			than 1		1 to 3		4 to 5		After 5
	Total		year		years		years		years
Facility leases	$	1,778,075	$	599,919	$	574,644	$	436,610	$	166,902
Equipment leases		69,363		45,134		22,248		1,981		—
Total contractual obligations	$	1,847,438	$	645,053	$	596,892	$	438,591	$	166,902

Directors to gain time to seek alternatives to the bid with the objective of enhancing shareholder value. In a number of these transactions, a change of control ultimately occurred at a price in excess of the original bid price, demonstrating that the existence of the Rights Plan will not necessarily prevent successful unsolicited Take-over Bids for the common shares.

~~Off-Balance~~Terms ~~Sheet~~of ~~Arrangements~~the Rights Plan

~~Guarantees~~The following is a summary of the terms of the Rights Plan. This summary is qualified in its entirety by the Rights Agreement.

WeIssue warrant that our software and hardware products will operate substantially in conformity with product documentation and that the physical media will be free from defect. The specific terms and conditions of ~~the warranties are generally one year but may vary depending on the country in which~~Rights the products are sold. We accrue for known warranty issues if a loss is probable and can be reasonably estimated, and accrue for estimated incurred but unidentified warranty issues based on historical activity. To date, we have had no material warranty claims.

~~Transactions~~Under ~~with~~the ~~Related~~Rights ~~Parties~~Plan, share purchase rights (the “Rights”) are to be created on May 25, 2007 in respect of the shares of the Company at the rate of one Right for each share outstanding as at 5:00 p.m. (Pacific Time) on such date (the “Record Date”) and each “voting share” (a share that entitles the holder to vote on the election of directors) (together “Common Shares”) issued after the Record Date but before the earlier of the Separation Time and the Expiration Time (as those terms are defined below).

InSeparation ~~the second quarter of 2005, E. Brinton Coxe, a member of our Board of Directors, became a~~Time related party by virtue of the fact that we have paid him compensation of Canadian $815,908 and 350,000 common share purchase warrants in consideration of the provision of advisory services in connection with the private placement completed on April 8, 2005. Mr. Coxe has also participated in the financing by purchasing 100 units personally. Mr. Coxe was paid an additional Canadian $145,940 for professional services provided during the year and to be provided to April 2006. For the six months ended May 31, 2006, $20,856 was charged to expenses.

OnUntil ~~April 8~~the Separation Time, ~~2005~~the Rights will trade together with the Common Shares, ~~Gerald~~will J.be represented ~~Shields~~by ~~was~~the ~~elected~~Common toShare ~~our~~certificates ~~Board~~and ofwill ~~Directors.~~not Mrbe exercisable. ~~Shields~~ ~~provides~~Certificates for Common ~~legal~~Shares ~~services~~issued after the Record Time but prior to the ~~company~~earlier ~~through~~of athe ~~law~~Separation ~~firm~~Time inand ~~which~~the Expiration heTime ~~has~~(as andefined ~~interest.~~below) ~~The~~will ~~fees~~bear ~~billed~~a to legend incorporating the ~~company~~Rights byAgreement Mrby reference. ~~Shields’~~ ~~firm~~Promptly ~~for~~following the ~~three~~Separation ~~months~~Time, ~~and~~separate ~~six~~certificates ~~months~~evidencing ~~ended~~the ~~May 31,~~Rights (“Rights ~~2006~~Certificates”) ~~were~~will be mailed to the holders of record of Common Shares as of the ~~$100,305~~Separation ~~and~~Time. ~~$135~~After such time,~~873,~~ ~~respectively~~the ~~(three~~Rights ~~and~~Certificates ~~six~~alone ~~months~~will ~~ended~~represent ~~May 31~~the Rights, ~~2005~~and ~~–$42,285)~~the Rights will be transferable separately from the Common Shares.

~~Page~~The 13“Separation Time” is the close of 16business on the eighth business day (or such later day as may be determined by the Board) after the earlier of:

~~Proposed~~ (a) the ~~Transactions~~“Stock Acquisition Date”, which is the date of the first public announcement of facts indicating that a person has become an Acquiring Person (as defined below);

We (b) the ~~are~~date ~~not~~of ~~currently~~the ~~engaged~~commencement inof, or first public announcement of the intent of any person ~~proposed~~(other ~~transactions.~~than the Company or a subsidiary of the Company) to commence, a take-over bid (other than a Permitted Bid or Competing Permitted Bid (each as defined below)) to acquire Beneficial Ownership of shares of the Company to which is attached a right to vote for the election of all directors generally which, together with such person’s voting shares, constitute in the aggregate more than 20% of the voting shares; and

~~SELECTED~~ (c) the ~~QUARTERLY~~date ~~DATA The~~upon ~~following~~which ~~tables~~a ~~contain~~Permitted ~~financial~~Bid ~~information~~or ~~that~~Competing isPermitted ~~derived~~Bid ~~from~~(each ~~the~~as ~~unaudited consolidated~~defined ~~financial~~below) ~~statements~~ceases ~~from~~to ~~the~~be ~~named periods~~such.

	May 31			February 28			November 30			August 31
For the three months ended	2006			2006			2005			2005
Revenue	$	6,139,869		$	3,662,751		$	5,137,424		$	2,618,150
Gross profit		2,594,972			1,193,706			2,636,483			1,472,145
Gross profit percentage		42.3	%		32.6	%		51.3	%		56.2	%
Net loss		(2,137	)		(1,293,000	)		(894,918	)		(359,156	)
Net loss attributable to common shareholders		(715,055	)		(1,468,223	)		(1,555.992	)		(1,076,828)
Loss per share – basic and diluted		(0.02	)		(0.05	)		(0.06	)		(0.04	)

After the Separation Time, and prior to the Expiration Time (as defined below), each Right may be exercised to purchase one Common Share of the Company at the Exercise Price (defined below).

	May 31			February 28			November 30			August 31
For the three months ended	2005			2005			2004			2004
Revenue	$	1,533,245		$	1,837,884		$	3,053,762		$	2,248,010
Gross profit		316,677			1,005,116			1,639,914			1,124,610
Gross profit percentage		20.6	%		54.7	%		53.7	%		50.0	%
Net loss		(1,370,047	)		(178,822	)		(183,290	)		(342,670	)
Net loss attributable to common shareholders		(5,560,039	)		(241,299	)		(218,095	)		(400,334	)
Loss per share – basic and diluted		(0.20	)		(0.01	)		(0.01	)		(0.01	)

The Rights Plan has a term of approximately three years and will expire at the close of the annual general meeting of shareholders next following April 18, 2010 (the “Expiration Time”) unless the

~~CRITICAL ACCOUNTING POLICIES~~19

~~These~~Rights ~~items~~ are ~~substantially~~earlier ~~unchanged~~redeemed asor ~~dicussed~~exchanged inby the Company’s, ~~MD&A~~or ~~for~~ the ~~year~~Rights ~~ended November 30,~~Plan ~~2005~~is asextended ~~contained~~by ~~in our 2005 Annual Report filed on SEDAR at www.sedar.com or~~further ~~our~~approval ~~annual~~of ~~Form~~the ~~20-F report filed on EDGAR at www~~shareholders.~~sec.gov .~~

~~CHANGE~~Acquiring ~~IN REPORTING CURRENCY~~Person

~~Effective~~Subject ~~March 1~~to certain exceptions set forth in the Rights Agreement, ~~2006~~the dilutive effects of the ~~Company~~Rights are ~~adopted~~triggered by a person becoming an Acquiring Person upon the ~~U.S.~~acquisition ~~dollar~~of asBeneficial ~~its~~Ownership of ~~reporting~~20% ~~currency~~or more of the voting shares. InA ~~general this~~person ~~change~~will ~~results~~not ~~from~~trigger anthe ~~increase~~separation inand exercisability of the ~~overall~~Rights ~~proportion~~if he becomes the Beneficial Owner of ~~business~~20% ~~activites~~or ~~conducted~~more inof the shares as a result of: (a) a ~~U.S.~~voting ~~dollars.~~share ~~Under~~Reduction ~~U.S.~~which, ~~GAAP~~by reducing the number of shares outstanding, increases the percentage ~~change~~of ~~was~~shares ~~effected~~Beneficially Owned by ~~translating~~such ~~assets~~person ~~and~~to ~~liabilities~~20% ator ~~the~~more; (b) a Pro-Rata Acquisition; ~~existing~~or ~~U.S./Canadian~~(c) share ~~dollar~~acquisitions ~~foreign~~made ~~exchange~~pursuant ~~spot~~to ~~rate~~a Permitted Bid or otherwise on terms approved by the Board ~~last~~of ~~day~~Directors, provided that if he becomes the Beneficial Owner of 20% or more of the ~~month~~voting shares by such means and he subsequently becomes the Beneficial Owner of additional shares, ~~while~~other ~~earnings~~than ~~were~~by ~~translated~~such atmeans, then, as of the ~~average~~date ~~rate~~of ~~for~~such ~~each~~additional ~~month.~~acquisition, ~~Equity~~he ~~transactions~~shall ~~have~~become ~~been~~an ~~translated~~Acquiring atPerson. ~~historical~~A ~~rates;~~person ~~with~~who ~~opening~~is ~~equity~~an ~~restated~~Acquiring Person as at the ~~rate~~Record ofTime ~~exchange~~may onacquire ~~December 1,~~additional ~~2001.~~shares ~~The~~to ~~resulting~~a ~~net~~maximum ~~translation~~of ~~adjustment~~1% ~~has~~of ~~been~~the ~~credited~~voting toshares without triggering the ~~cumulative~~dilutive ~~translation~~effects of the ~~adjustment~~Rights.

~~Prior~~Beneficial ~~to March 1, 2006 the reporting currency of the company was Canadian dollars.~~Ownership

~~Page~~In 14general, a person “Beneficially Owns” voting shares held by the person and voting shares actually held by others in circumstances where those holdings are or should be grouped together for purposes of 16the Rights Plan. Included are holding by the person’s “Affiliates” (generally, a person that controls, is controlled by, or under common control with the other person) and “Associates” (generally, a corporation with more than 10% of its shares controlled by the person, a partner of the person, a trust in which the person has a substantial beneficial interest or of which the person is the trustee and the spouse or relatives of the person sharing the person’s residence). Also included are securities which the person or any of the person’s Affiliates or Associates has the right to acquire within 60 days (other than customary agreements with and between underwriters and/or banking group and/or selling group members with respect to a distribution of securities, and other than pledges of securities in the ordinary course of business).

~~CHANGES~~A INperson ~~ACCOUNTING~~is ~~POLICIES~~also deemed to “Beneficially Own” any securities that are Beneficially Owned by any other person with which the person is acting jointly or in concert.

InInvestment ~~December 2004,~~advisors ~~the~~(for ~~Financial~~fully ~~Accounting~~managed ~~Standards~~accounts) ~~Board~~and ~~issued~~trust ~~Statement~~companies of(acting ~~Financial~~in ~~Accounting Standard~~their ~~123R,~~capacities ~~Share-Based~~as trustees ~~Payment,~~and ~~(“SFAS 123(R~~administrators)”) aacquiring ~~revision~~greater tothan ~~SFAS~~20% ~~123.~~of ~~SFAS~~the ~~123(R)~~Company’s ~~requires all~~shares ~~share-based~~will ~~payments~~not be considered to be ~~recognized~~the inBeneficial ~~the~~Owners ~~financial~~of ~~statements~~such ~~based~~shares, onand ~~their~~so ~~values~~will ~~using either~~be aexempt ~~modified-prospective~~from ortriggering ~~modified-retrospective~~the dilutive ~~transition~~effects ~~method.~~of ~~The~~the ~~standard~~Rights, noprovided ~~longer permits~~that ~~pro~~they ~~forma~~are ~~disclosure~~not, either alone or ~~prospective~~as ~~recognition~~part of a group, making a Take-over Bid.

~~Prior~~Rights toExercise ~~December 1, 2005, the company’s stock-based employee compensation plans were accounted for~~Privilege under the recognition and measurement provisions of Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees” (“APBO 25”) and related Interpretations, as permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation (“SFAS 123”). The company generally did not recognize stock-based compensation costs in its statement of operations for periods prior to December 1, 2005, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of the grant.

~~Effective~~The ~~December 1,~~Rights ~~2005,~~will ~~the~~separate ~~company~~from ~~adopted~~ the ~~fair~~shares ~~value~~and ~~recognition~~become ~~provisions~~exercisable of8 ~~SFAS~~business ~~No. 123(R),~~days ~~using~~after ~~the~~a ~~modified-prospective-transition~~person ~~method.~~has acquired ~~Under~~20% ~~this~~or ~~transition~~more ~~method~~of, ~~stock-based compensation~~or ~~cost~~commences ~~recognized~~or inannounces ~~the~~a ~~first~~Take-over ~~three~~Bid ~~months~~for, ofthe ~~2006~~Company’s ~~includes~~outstanding common ~~(a) compensation~~shares, ~~costs~~other ~~for all~~than ~~unvested~~by ~~stock-based~~an ~~awards~~acquisition ~~based~~pursuant onto ~~the~~a ~~grant-date~~Permitted ~~fair~~Bid. ~~value,~~The ~~including~~acquisition ~~those~~by ~~granted,~~an ~~modified~~Acquiring orPerson ~~settled~~of ~~prior~~20% toor ~~September 1,~~more ~~2005,~~of ~~that~~the ~~were~~Company’s ~~previously~~shares ~~disclosed~~is onreferred ato ~~pro~~as ~~forma basis,~~a ~~and~~“Flip-in ~~(b) compensation~~Event”. ~~cost~~Prior to ~~for~~the ~~all~~Rights ~~stock-based~~being ~~awards~~triggered ~~granted~~by ~~subsequent~~a toFlip-in ~~December 1~~Event, ~~2005, based~~the onRights ~~the~~will ~~grant-date~~have ~~fair~~no value ~~estimated~~and inwill ~~accordance~~have ~~with~~no dilutive ~~the~~effect ~~provisions~~on ofthe ~~SFAS 123(R)~~ shares.

AsWhen a ~~result~~Flip-in ofEvent ~~adopting~~occurs ~~SFAS~~each ~~123~~Right (R)except onfor ~~December 1,~~the ~~2005,~~Rights ~~the~~beneficially ~~company’s~~owned ~~loss~~by ~~from~~an ~~operations~~Acquiring Person or certain transferees of an Acquiring Person, ~~loss before~~which ~~income~~Rights ~~taxes~~shall ~~and~~be ~~net~~void) ~~loss~~becomes ~~for~~a ~~the~~right to ~~six~~purchase ~~months~~from ~~ended~~the ~~May 31~~Company, ~~2006~~upon ~~increased~~exercise bythereof ~~$10,328.~~in accordance with the terms of the Rights

~~FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS~~20

~~Foreign~~Agreement, ~~Exchange~~common ~~Forward~~shares ~~Contracts~~having an aggregate market price of twice the Exercise Price (as defined below) for an amount equal to the Exercise Price. Accordingly, a Flip-in Event that is not approved by the Board of Directors will result in significant dilution to an Acquiring Person. The Rights Plan is designed to require any person interested in acquiring more than 20% of the Company’s shares to do so by way of a Permitted Bid or to make an offer which the Board considers to represent the full value of the shares.

WeExercise ~~use~~Price ~~foreign exchange forward contracts to hedge transactions denominated in U.S. dollars, Australian dollars,~~ and ~~euros.~~Anti-Dilution ~~The purpose of our hedging activities is to reduce the level of~~Adjustments exposure to exchange rate movements. At May 31, 2006 we had foreign exchange forward contracts to sell Australian $500,000 and buy Canadian funds. The exchange rates set in the foreign exchange forward contracts ranged between Canadian $0.8373 and $0.8374 for Australian $1.00. The contracts mature September 30, 2006. At May 31, 2006 we also had foreign exchange forward contracts to sell U.S. $1,518,726 and buy Canadian funds. The exchange rates set in the foreign exchange forward contracts ranged between Canadian $1.0978 and $1.1030 for U.S. $1.00. The contracts mature between July 21, 2006 and January 31, 2007.

~~Derivative~~The ~~financial~~price ~~instruments~~at ~~are~~which ~~utilized~~a byholder ~~the~~of ~~company~~a toRight ~~reduce~~may ~~our~~purchase ~~exposure~~the toCommon ~~fluctuations~~Shares issuable upon exercise of insuch ~~foreign~~right ~~exchange~~(the on“Exercise ~~certain~~Price”) ~~committed~~will ~~and~~initially ~~anticipated~~be ~~transactions~~$30.00 Weper ~~formally~~Right. ~~document~~The ~~the~~Rights Agreement provides ~~relationships~~for ~~between~~adjustments ~~derivative~~to ~~financial~~the ~~instruments~~number ~~and~~of ~~hedged~~Rights ~~items~~outstanding, asthe ~~well~~number asof ~~the~~shares ~~risk~~which may be acquired ~~management~~pursuant ~~objective~~to each Right and ~~strategy.~~the WeExercise ~~assess,~~Price on(or ana ~~ongoing~~combination ~~basis,~~of ~~whether~~the foregoing) in certain circumstances or upon the ~~derivative~~occurrence ~~financial~~of certain events, including consolidations or subdivisions of ~~instruments~~the ~~continue~~shares, tothe bepayment ~~effective~~of individends, ~~offsetting~~limitations ~~changes~~that may exist from time to time in ~~fair~~respect ~~values~~of the Company’s authorized but unissued share capital or ~~cash~~the ~~flows~~exchange of ~~the~~existing shares for other ~~hedged~~shares ~~transactions~~or securities of the Company.

~~Derivatives~~Permitted ~~are~~Bid ~~recorded~~and asCompeting ~~assets~~Permitted ~~or liabilities, measured at fair value. Derivatives that are not~~Bid hedges are adjusted to fair value through income or loss. If the derivative is a hedge, depending upon the nature of the hedge, changes in the fair value of the derivative are either offset against the fair value of assets, liabilities, or firm commitments through income or loss, or recognized in other comprehensive income or loss until the hedged item is recognized in income. The ineffective portion of a derivative’s change in fair value is immediately recognized into income or loss. The requirement to record derivatives at their fair market value has not had a material impact on our financial statements.

~~Page~~A 15Permitted Bid will not trigger the dilutive effects of 16the Rights Plan. The Permitted Bid requirements include the following:

~~DISCLOSURE~~(i) OFthe ~~OUTSTANDING~~offer ~~SHARE~~must ~~DATA~~ be made for all shares and must be made by way of a Take-over Bid circular to all holders of the Company’s shares; (ii) the Offeror must not Beneficially Own more than 10% of the outstanding shares (this restriction does not apply to Offerors who Beneficially Own 10% or more of the outstanding shares as at the Record Time provided that they do not increase their Beneficial Ownership by more than 1% of the outstanding shares after the Record Time); (iii) the offer must be outstanding for a minimum of 60 days to permit shareholders of the Company to properly assess the bid and to allow competing bids to emerge. This also gives the Board of Directors of the Company sufficient time to review the offer, seek or formulate alternatives and communicate its recommendation to shareholders of the Company. Should more than 50% of shares held by the shareholders other than the Offeror be tendered to the offer, shareholders of the Company are to be provided with an additional 10 clear business days during which to tender any shares not already tendered to the offer; (iv) the offer must provide that shares may only be taken up and paid for if more than 50% of the shares held by shareholders of the Company other than the Offeror have been deposited or tendered and not withdrawn; (v) when the offer has been made, no further shares may be acquired by the Offeror except pursuant to the Permitted Bid; and (vi) if the consideration offered is not payable entirely in cash, a fairness opinion must be provided to the shareholders of the Company in connection with the offer.

AsA atPermitted ~~May 31~~Bid, ~~2006,~~even weif ~~had~~not ~~32.8 million~~approved ~~issued~~by ~~and~~the ~~outstanding common shares and 3.7 million outstanding stock options. We also had 30~~Board,~~262~~ ~~issued~~may ~~and~~be ~~outstanding~~made ~~class~~directly Ato ~~preference~~the ~~shares~~shareholders ~~and 317,240 issued and outstanding class B Series 2 preference shares convertible into common shares at conversion ratios~~ of ~~1:1 and 1:58~~the Company.~~82353~~ ~~respectively~~Shareholders’ ~~which~~approval ~~represents 18.7 million common shares. Also~~ at ~~May 31,~~a ~~2006,~~special wemeeting ~~had~~will ~~13.8 million~~not ~~outstanding~~be ~~common~~required ~~share~~for ~~purchase warrants convertible to common shares at~~ a ~~conversion~~Permitted ~~ratio of 1:1, representing 13~~Bid.~~8 million common shares.~~

~~If all preferred shares were converted, and all warrants and options were exercised, there would be~~21 a total of 69,055,426 common shares outstanding at May 31, 2006 (May 31, 2005 – 66,696,813). As a result of the exercise of all warrants and options, the company would receive cash of $14,133,042 (May 31, 2005 — $11,572,200).

~~RISKS~~Instead, ~~AND~~shareholders ~~UNCERTAINTIES~~of the Company will initially have at least 60 days to decide whether to deposit their shares.

~~The~~A ~~primary~~“Competing ~~risks~~Permitted ~~and~~Bid” ~~uncertainties~~is a Take-over Bid that ~~affect~~is ~~and~~made ~~may~~after ~~affect~~a usPermitted ~~and~~Bid ~~our~~has ~~business,~~been ~~financial~~made, ~~condition~~but prior to its expiry, and ~~results~~satisfies all the requirements of ~~operations~~a ~~substantially~~Permitted ~~unchanged~~Bid as ~~dicussed~~described inabove, except ~~the~~that ~~company’s~~a ~~MD&A~~Competing Permitted Bid is not required to remain open for 60 days so long as it is open until the ~~year~~later ~~ended~~of ~~November~~35 ~~30,~~days ~~2005~~after asthe ~~contained~~date inthe ~~our~~Competing ~~2005~~Permitted ~~Annual~~Bid ~~Report~~was ~~filed~~made onand ~~SEDAR at~~60 days ~~www.sedar.com~~after orthe ~~our~~earliest ~~annual~~date ~~Form~~on ~~20-F~~which ~~report~~a ~~filed~~Permitted onBid ~~EDGAR~~then atin ~~www.sec.gov~~existence was made.

~~Page~~If 16one or more Permitted Bids or Competing Permitted Bids are made, the Board of 16Directors may require that in order for any such bid to retain its status as a Permitted Bid or Competing Permitted Bid, it must provide that no voting shares will be taken up or paid for prior to the latest time at which Permitted Bid or Competing Permitted Bid expires (the “Extension Time”), provided that the Extension Time is not later than 90 days after the date on which such Take-over Bid was made

~~OSI~~Redemption ~~Geospatial~~and ~~Inc.~~Waiver

~~(formerly~~The ~~Offshore~~Board ~~Systems~~of ~~International~~Directors ~~Ltd~~may, at its option, at any time prior to the Separation Time, elect to redeem all but not less than all of the Rights at a redemption price of $0.)0001 per Right and, in that event, the right of holders of Rights to exercise the Rights will terminate.

~~Interim~~The ~~Consolidated~~Board ~~Financial~~of ~~Statements~~Directors ~~(Unaudited) Three~~may, ~~and~~prior ~~Six~~to ~~Months~~the ~~Ended~~occurrence ~~May 31~~of the relevant Flip-in Event, ~~2006~~waive ~~and~~the application ~~2005~~of ~~(expressed~~the Rights Plan to a Flip-in UEvent that may occur by reason of a take-over bid made by take-over bid circular to all holders of record of voting shares.S. ~~dollars)~~However, if the Board waives ~~(Prepared~~the inapplication ~~accordance~~of the Rights Plan, the Board shall be deemed to have waived the application of the Rights Plan with ~~United~~respect ~~States~~to ~~Generally~~any ~~Accepted~~other ~~Accounting~~Flip-in ~~Principles)~~Event occurring by reason of such take-over bid made prior to the expiry of a bid for which a waiver is, or is deemed to have been, granted.

~~OSI~~The ~~Geospatial~~Board ~~Inc.~~of ~~U.S.~~Directors ~~GAAP~~may, ~~Consolidated~~prior ~~Balance~~to ~~Sheets~~the ~~(unaudited)~~occurrence ~~(Incorporated~~of ~~under~~the relevant Flip-in Event, with the ~~laws~~prior consent of the ~~Province~~holders of ~~British~~voting ~~Columbia~~shares, ~~Canada)~~waive ~~(expressed~~the application of the Rights Plan to a Flip-in Event Uthat may occur by reason of an acquisition of voting shares otherwise than pursuant to a take-over bid made by means of a take-over bid circular to all holders of record of voting shares.S. In ~~dollars)~~the event that the Board proposes such waiver, the Board shall extend the Separation Time to a date that is no later than 10 business days following the date of the meeting of holders of voting shares called to approve such waiver.

	May 31, 2006			November 30, 2005
Assets
Current assets
Cash and cash equivalents	$	1,419,553		$	8,222,226
Marketable securities		159,685			—
Restricted cash		60,000			189,519
Accounts receivable (note 6)		7,223,816			9,419,395
Inventory (note 7)		1,109,450			937,554
Prepaid expenses and deposits		672,779			532,282
		10,645,283			19,300,976
Plant and equipment		1,080,632			869,398
Intangible and other assets		870,558			625,799
Goodwill (note 5)		8,130,396			405,681
	$	20,726,869		$	21,201,854
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	3,017,715		$	3,359,656
Income taxes payable		62,022			242,411
Unearned revenue		874,823			454,220
		3,954,560			4,056,287
Deferred income taxes		342,697			200,998
		4,297,257			4,257,285
Stockholders’ Equity
Issued and outstanding
30,262 Class A Series A preference shares (2005 – 30,262) (note 8(a))		19,227			19,227
317,240 Class B Series 2 preference shares (2005 – 341,240) (note 8(b))		8,750,314			9,040,914
32,857,048 common shares (2005 – 30,367,309) (note 8(c))		17,060,916			15,373,529
		25,830,457			24,443,670
Warrants (note 8(d))		4,286,060			4,286,060
Additional paid in capital		3,860,761			3,995,835
Accumulated deficit		(20,202,694	)		(18,061,619	)
Accumulated other comprehensive income		2,655,028			2,290,623
		16,429,612			16,944,569
	$	20,726,869		$	21,201,854
Contingency (note 9)

Amendments

Following shareholder ratification of the Rights Agreement, the Company may, from time to time, amend the Rights Agreement without the approval of the holders of shares or Rights, to correct any clerical or typographical error. The ~~accompanying~~Company ~~notes~~may ~~are~~also, anwith ~~integral~~the ~~part~~consent of ~~these~~the ~~unaudited~~holders ~~interim~~of ~~consolidated~~shares, at ~~financial~~any ~~statements~~time prior to the Separation Time, amend, vary or rescind any of the provisions of the Rights Agreement. After the Separation Time, the Rights Agreement may be amended only with the consent of the holders of Rights.

~~OSI~~Shareholder ~~Geospatial~~Approval ~~Inc.~~and ~~U.S.~~Future ~~GAAP Consolidated Statement of Earnings (Loss) (unaudited) (expressed in U.S. dollars)~~Ratification

	Three Months Ended May 31,						Six Months Ended May 31,
	2006			2005			2006			2005
Revenue
Marine systems	$	2,435,442		$	783,226		$	3,717,882		$	2,372,381
Land and air systems		2,370,118			—			4,221,681			—
Mapping		1,334,309			750,019			1,863,057			998,748
		6,139,869			1,533,245			9,802,620			3,371,129
Cost of sales		3,544,897			1,216,568			6,013,942			2,049,336
Gross profit		2,594,972			316,677			3,788,678			1,321,793
Expenses
General and administrative		1,514,184			836,773			2,859,976			1,678,981
Research and development		450,592			372,761			992,859			633,270
Sales and marketing		605,817			543,530			1,158,039			992,314
Depreciation and amortization		137,878			63,712			269,905			107,478
Interest expense		6,218			6,950			12,264			17,234
Interest income		(6,849	)		(31,347	)		(19,683	)		(31,437	)
Foreign exchange loss (gain)		(21,147	)		62,307			267			24,328
Technology Partnerships Canada royalty		107,668			30,459			164,572			74,861
Technology Partnerships Canada contribution		(293,372	)		(378,386	)		(503,840	)		(594,399	)
		2,500,989			1,506,759			4,934,359			2,902,630
Earnings (loss) before income taxes		93,983			(1,190,082	)		(1,145,681	)		(1,580,837	)
Income tax expense (recovery) (note 11)
Deferred income tax expense (recovery)		(23,321	)		113,378			(7,594	)		(94,440	)
Current income tax expense		119,441			66,587			93,706			82,116
		96,120			179,965			86,112			(12,324	)
Net loss		(2,137	)		(1,370,047	)		(1,231,793	)		(1,568,513	)
Net loss available to common shareholders (note 8(f))	$	(715,055	)	$	(5,560,039	)	$	(2,120,971	)	$	(5,780,204	)
Loss per share (note 8(f))
Basic and diluted loss per share		(0.02	)		(0.20	)		(0.07	)		(0.21	)
Weighted average number of common shares outstanding (note 8(f))
Basic and diluted		32,301,357			27,488,074			31,790,928			27,488,074

The Rights Plan requires shareholder approval and, accordingly, at the Meeting, shareholders will be asked to approve the Rights Plan as summarized in this information circular and as more particularly described in the full text of the Rights Plan available for review at the Company’s registered and records office. The following is the text of the proposed resolution:

~~The accompanying notes are an integral part of these unaudited interim consolidated financial statements.~~22

~~OSI~~“BE ~~Geospatial~~IT ~~Inc.~~RESOLVED Consolidated Statements of Stockholders’ Equity and Accumulated Deficit (unaudited) For the six months ended May 31, 2006 (Incorporated under the laws of the Province of British Columbia) (expressed in U.S. dollars)THAT:

Class A preference shares
1.	The Shareholder Rights Plan Agreement dated as of April 19, 2001 and amended and restated on March 19, 2007, between the Company and Computershare Investor Services Inc., as Rights Agent, as adopted by the Board of Directors of the Company on March 19, 2007, and the issuance of the rights to holders of common shares of the Company substantially in accordance with the terms and conditions of such Shareholder Rights Plan Agreement, is hereby ratified, confirmed and approved; and
Balance at November 30, 2005	#	30,262		$	19,227
2.	any director or senior officer of the Company be, and is hereby authorized and directed, for and on behalf of and in the name of the Company, to do all such acts and things and to execute, whether under the corporate seal of the Company or otherwise, and deliver all such documents and instruments as may be considered necessary or desirable to give effect to the foregoing.”
Balance at May 31, 2006	#	30,262		$	19,227
Class B preference shares
Balance at November 30, 2005	#	341,240		$	9,040,914
Accretion of discount on Class B preference shares		—			362,772
Class B preference shares converted to common shares		(24,000	)		(669,038	)
Tax benefit related to share issue costs		—			15,666
Balance at May 31, 2006	#	317,240		$	8,750,314
Common shares
Balance at November 30, 2005	#	30,367,309		$	15,373,529
Shares Issued to CHI shareholders (note 5)		1,067,975			752,948
Class B preference shares converted to common shares		1,411,764			927,959
Exercise of stock options		10,000			6,480
Balance at May 31, 2006	#	32,857,048		$	17,060,916
Warrants
Balance at November 30, 2005	#	13,788,365		$	4,286,060
Balance at May 31, 2006	#	13,788,365		$	4,286,060
Additional paid-in capital
Balance at November 30, 2005				$	3,995,835
Class B preference shares converted to common shares					(238,817	)
Stock-based compensation					103,743
Balance at May 31, 2006				$	3,860,761
Accumulated deficit
Balance at November 30, 2005				$	(18,061,619	)
Accretion of discount on Class B preference shares					(362,772	)
Class B preference shares converted to common shares					(20,104	)
Dividends on Class B preference shares					(526,406	)
Net loss for the period					(1,231,793	)
Balance at May 31, 2006				$	(20,202,694	)
Accumulated other comprehensive income
Foreign currency translation adjustment
Balance at November 30, 2005				$	2,290,623
Adjustment for the three months ended February 28, 2006					147,709
Balance at February 28, 2006					2,438,332
Adjustment for the three months ended May 31, 2006					216,696
Balance at May 31, 2006				$	2,655,028
Total stockholders’ equity				$	16,429,612

~~The~~If ~~accompanying~~the ~~notes~~Rights ~~are~~Plan anResolution ~~integral~~is ~~part~~not ofapproved, ~~these~~the ~~unaudited~~Rights ~~interim~~Plan ~~consolidated~~will ~~financial~~immediately ~~statements~~terminate.

OSI Geospatial Inc.		U.S. GAAP
Consolidated Statement of Cash Flows (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

In addition, the Rights Agreement provides that the continued existence of the Rights Plan must be ratified by a majority of the shareholders of the company at its extraordinary general meeting three years following the Meeting. Subject to shareholder approval and future shareholder ratification, the Rights Plan will have a term of six years.

	Three Months Ended May 31,						Six Months Ended May 31,
	2006			2005			2006			2005
Cash flows from operating activities
Net loss for the period	$	(2,137	)	$	(1,370,047	)	$	(1,231,793	)	$	(1,568,513	)
Items not affecting cash
Depreciation and amortization		201,225			95,068			388,578			164,107
Stock-based compensation		78,569			10,725			103,743			12,961
Deferred income taxes		2,414			114,050			(7,594	)		(78,239	)
		280,071			(1,150,204	)		(747,066	)		(1,469,684	)
Changes in non-cash working capital items
Accounts receivable		(1,636	)		1,165,596			3,636,020			1,975,522
Inventory		(15,732	)		(24,397	)		(109,663	)		(198,072	)
Prepaid expenses and deposits		32,421			88,843			92,307			(153,706	)
Accounts payable and accrued liabilities		630,745			1,073,781			(1,148,540	)		379,972
Income taxes payable		(30,699	)		60,915			(171,219	)		60,915
Unearned revenue		126,302			(2,095	)		377,912			(6,623	)
		741,401			2,362,643			2,676,817			2,058,008
		1,021,472			1,212,439			1,929,751			588,324
Cash flows used in investing activities
Purchase of CHI Systems Inc., net of cash acquired		(239,642	)		—			(8,122,800	)		—
Purchase of Mapcon Mapping Consultants Inc., net of cash acquired		—			(972,421	)		—			(972,421	)
Decrease (increase) in marketable securities		98,531			—			(159,685	)		—
Decrease (increase) in restricted cash		(60,000	)		(175,271	)		129,519			(175,271	)
Additions to plant and equipment		(39,249	)		(60,771	)		(87,017	)		(82,910	)
Additions to intangibles and other assets		(52,723	)		(19,211	)		(92,999	)		(30,278	)
		(293,083	)		(1,227,674	)		(8,332,982	)		(1,260,880	)
Cash flows from (used in) financing activities
Payment to operating line of credit		—			(442,386	)		—			—
Issue of common shares		6,480			—			6,480			—
Issue of Class B Series 2 preference shares and warrants, net of issue costs		—			13,798,195			—			13,798,195
Repurchase of Class B Series 1 preference shares		—			(2,298,327	)		—			(2,298,327	)
Class B preference share dividends declared and paid		(526,406	)		(132,972	)		(526,406	)		(201,921	)
		(519,926	)		10,924,510			(519,926	)		11,297,947
Translation adjustment		62,209			(243,712	)		120,484			(171,500	)
Increase (decrease) in cash		270,672			10,665,563			(6,802,673	)		10,453,891
Cash and cash equivalents – beginning of period		1,148,881			—			8,222,226			211,672
Cash and cash equivalents – end of period	$	1,419,553		$	10,665,563		$	1,419,553		$	10,665,563

DISCLOSURE RESPECTING SECURITY-BASED COMPENSATION ARRANGEMENTS

The ~~accompanying~~TSX ~~notes~~requires that issuers disclose the terms of any security based compensation arrangements which they have in place. The only security based compensation arrangements which the Company has in place are anits ~~integral~~three ~~part~~incentive stock option plans (collectively the “Stock Option Plans”) which were adopted in 1994, 1996 and 1998. All three Stock Option Plans were approved by the TSX and by the shareholders of ~~these~~the ~~unaudited~~Company ~~interim~~by ~~consolidated~~way ~~financial~~of ~~statements~~disinterested vote, and terms of all three are the same in all material respects except for the number of shares reserved for issuance under them. The Company has three Stock Option Plans because, historically, as the number of shares available for granting under one Stock Option Plan was depleted, the Company would adopt another plan. Since 1998 the Company has amended its 1998 Stock Option Plan on three occasions to replenish the number of shares available for granting under the plans, rather then adopting a new plan. The information set out below is with respect to all three Stock Option Plans and amendments combined as if they were all one plan. This information is being provided to meet the Company’s disclosure obligations under TSX policies. The Company is not seeking shareholder approval to amend any of the Stock Option Plans or to otherwise obtain approval for any security based compensation arrangements.

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

Eligible Participants

1)Stock ~~Basis~~options ofmay presentation On April 12, 2006 at the Company’s annual general meeting its shareholders voted in favor of changing the Company’s name from Offshore Systems International Ltd. to OSI Geospatial Inc. The name change was effective June 5, 2006. For the purposes of this report, the Company is referred to by its new legal identity. These unaudited interim consolidated financial statements have been prepared by management and include the accounts of OSI Geospatial Inc. and its subsidiaries, collectively referred to as the Company. These unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and all amounts herein have been expressed in U.S. dollars unless otherwise noted. These unaudited interim consolidated financial statements do not include all the information and footnote disclosures required for compliance with U.S. GAAP for annual financial statements applied on a consistent basis. These unaudited interim consolidated financial statements should be ~~read~~issued in conjunction with the Company’s audited consolidated financial statements and notes thereto. These unaudited interim consolidated financial statements conform in all material respects with Canadian generally accepted accounting principles (“Canadian GAAP”), except as disclosed in note 13. The preparation of these unaudited interim consolidated financial statements and the accompanying notes requires management to ~~make estimates and assumptions that affect the amounts reported. In the opinion of management~~directors, ~~these~~senior unaudited interim consolidated financial statements reflect all adjustments necessary to state fairly the results for the periods presented. Actual results could vary from these estimates and the operating results for the interim period presented are not necessarily indicative of the results expected for the full year. 2) Nature of Operations OSI Geospatial Inc. designsofficers, ~~develops~~employees, ~~and markets software and systems for enhancing situational awareness in command~~contractors, ~~control~~consultants, and other ~~intelligence~~service ~~applications.~~providers ~~OSI Geospatial’s principal product is the proprietary ECPINS® line~~ of ~~electronic chart navigation systems for commercial and military customers. Collectively, OSI Geospatial and its subsidiaries are referred to as~~ the Company. ~~OSI~~or Geospatial conducts its operations through three business units – International Systems Operations, U.S. Systems Operations and Mapping Operations. The Company’s International and U.S. Systems business units develop and produce geographic information display systems and software for the marine navigation, and command and control markets, and situational awareness products for land-based and aeronautical command and control markets. The Company’s Mapping business unit (formally the Geomatics business unit) provides digital land map and electronic nautical chart production services, and produces and distributes electronic nautical chart data. 3) Adoption of ~~Accounting~~any ~~Policies In December 2004, the Financial Accounting Standards Board issued Statement~~ of ~~Financial~~its ~~Accounting~~affiliates Standard 123R, Share-Based Payment, (“SFAS 123(R)”) a revision to SFAS 123. SFAS 123(R) requires all share-based payments to be recognized in the financial statements based on their values using either a modified-prospective or ~~modified-retrospective transition method~~subsidiaries. Prior to December 1, 2005, the Company’s stock-based employee compensation plans were accounted for under the recognition and measurement provisions of Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related Interpretations, as permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation (“SFAS 123”). The Company did not recognize stock-based compensation costs in its statement of operations for periods prior to December 1, 2005, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of the grant.

~~Page~~Number 1of Securities Issued and Issuable

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

Each stock option granted under the Stock Option Plans is exercisable into one common share of the Company. As of the date of this information circular, a total of 3,417,584 stock options have been granted and are unexercised, representing 8.9% of the total issued and outstanding common shares of the Company. In addition, a total of 946,910 stock options are issuable under the Stock Option Plans as of the date hereof, representing 2.5% of the number of common shares currently outstanding. The total number of stock options issued and issuable under the Stock Option Plans as of the date hereof represent 11.4% of the total issued and outstanding shares of the Company.

		Effective December 1, 2005, the Company adopted the fair value recognition provisions of SFAS No. 123(R), using the modified-prospective-transition method. Under this transition method, stock-based compensation cost recognized in the first three months of 2006 includes (a) compensation costs for all unvested stock-based awards based on the grant-date fair value, including those granted, modified or settled prior to September 1, 2005, that were previously disclosed on a pro forma basis, and (b) compensation cost for all stock-based awards granted subsequent to December 1, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R) .
		As a result of adopting SFAS 123(R) on December 1, 2005, the Company’s loss before income taxes and net loss for the three and six month periods ended May 31, 2006 increased by $3,431 and $10,328 respectively.
4)		Accounting change
		Change in reporting currency
		Effective March 1, 2006 the Company adopted the U.S. dollar as its reporting currency. In general this change results from an increase in the overall proportion of business activities conducted in U.S. dollars. Under U.S. GAAP, the change was effected by translating assets and liabilities at the existing U.S./Canadian dollar foreign exchange spot rate on the last day of the month, while earnings were translated at the average rate for each month. Equity transactions have been translated at historical rates; with opening equity restated at the rate of exchange on December 1, 2001. The resulting net translation adjustment has been credited to the cumulative translation adjustment.
		Prior to March 1, 2006 the reporting currency of the Company was Canadian dollars.
5)		Acquisitions
		a) CHI Systems Inc.
		On December 14, 2005, the Company acquired CHI Systems Inc., a United States defense contracting company. CHI Systems has multiple offices in the United States and is a supplier of technology and services to the U.S. Department of Defense and key defense prime contractors. Under the terms of the agreement, the Company paid approximately $9,000,000 for 100% of the outstanding shares of CHI Systems, of which $8,101,780 was paid in cash with the balance paid by the issuance of 1,067,975 common shares of the Company. The results of CHI Systems’ operations have been included in the consolidated financial statements commencing December 14, 2005.
		The following table summarizes the fair value of the assets acquired and liabilities assumed by the Company at December 14, 2005, the date of acquisition. The acquisition was accounted for using the purchase method whereby assets acquired and liabilities assumed were recorded at their fair values at December 14, 2005. The excess of the purchase price over the fair market value was recorded as goodwill. The allocation of the purchase price is preliminary and the final allocation may be subject to refinement in the next six months subject to the final review by an independent business valuator.

~~Page~~Maximum 2Stock Options per Person

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

The number of shares reserved for issuance to any one stock option holder pursuant to stock options granted under the Stock Option Plans may not exceed 5% of the outstanding common shares of the Company at the time of grant.

Assets
Current assets	$	2,058,446
Plant and equipment		224,834
Intangible and other assets		375,000
Goodwill		7,724,715
Total assets acquired	$	10,382,995
Liabilities
Current liabilities not including deferred tax liabilities		715,285
Deferred tax liabilities		164,959
Total liabilities assumed	$	880,244
Net assets acquired (cash and common share consideration)	$	8,848,552
Direct acquisition costs incurred by the Company		654,199
Total acquisition costs		9,502,751
Less fair value of net identifiable assets acquired		1,778,036
Goodwill	$	7,724,715
Cash of acquired operations	$	627,004

Exercise Price

The ~~fair~~exercise ~~value~~price of stock options granted under the ~~assets~~Stock ~~acquired,~~Option ~~including~~Plans ~~goodwill,~~is ~~and~~set ~~liabilities~~by ~~assumed~~the inBoard at the ~~acquisition~~time ~~have~~that ~~been~~the ~~“pushed~~stock ~~down”~~options toare ~~CHI~~granted. ~~Systems~~The ~~resulting~~exercise inprice ~~foreign~~must ~~currency~~be ~~revaluation~~not atless than a price equal to ~~each~~the ~~reporting~~closing price of the Company’s common shares on the TSX on the date immediately preceding the date of grant.

~~The~~No ~~following table presents details of the purchased intangible assets:~~Assignment

	Estimated useful life	Amount
Patents	5 years	$	130,012
Customer contracts	2 to 24 months		135,000
Customer relationships	1 to 3 years		109,988
Total intangible assets		$	375,000

The stock options may not be assigned or transferred.

~~The pro forma OSI Geospatial consolidated operating results assuming the acquisition of CHI~~Vesting ~~Systems International Inc. had occurred as of December 1, 2004 are as follows:~~

	3 Months Ended May 31,						6 Months Ended May 31,
	2006			2005			2006			2005
Revenue	$	6,139,869		$	4,599,708		$	10,184,977		$	9,091,587
Net Earnings (loss)		(2,137	)		(1,218,449	)		(1,261,998	)		(1,342,649	)
Net Earnings (loss) per share – basic and diluted		0.00			(0.04	)		(0.04	)		(0.05	)

The Board has discretion to impose terms and conditions as to the vesting of stock options. Any vesting provisions are set at the time that the stock options are granted.

~~b) Mapcon Mapping Consultants Inc.~~Term

OnThe ~~April 8,~~term ~~2005,~~of ~~the~~stock ~~Company~~options ~~acquired~~is ~~all~~set ofby the ~~issued~~Board ~~and~~at ~~outstanding~~the ~~shares~~time of ~~Mapcon Mapping Consultants Inc~~grant. ~~(“Mapcon~~No ~~Mapping”)~~maximum ofterm ~~Salt~~is ~~Lake City, Utah for cash consideration of~~prescribed ~~$1,113,907.~~under ~~The~~the ~~acquisition~~Stock ~~was~~Option ~~effective April 1, 2005~~Plans. ~~Mapcon~~To ~~Mapping~~date ~~was~~no aoptions ~~privately-held land~~have ~~mapping~~ever ~~company~~been ingranted ~~the~~by ~~U.S. digital mapping production market. Information regarding this acquisition can be found in~~ the ~~company’s~~Board ~~audited consolidated financial statements~~ for ~~the year~~a ~~ended November 30, 2005 as reported in our 2005 Annual Report filed on SEDAR at~~term ~~www.sedar.com~~exceeding orfive ~~our annual Form 20-F report filed on EDGAR at www~~years.~~sec.gov.~~

~~Page~~Termination 3of Options

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

The provisions respecting termination of stock options may be set by the Board. If the Board does not so specify, stock options held by an optionee terminate after the earliest of (i) three months after the optionee’s employment terminates by reason of his disability or retirement, (ii) 12 months after his or her death (in which case his or her estate may exercise them), (iii) 30 days from the date of termination of the optionee’s employment with the Company other than by reason of death, disability or retirement. Generally speaking, if an employee is terminated without cause, the Board will allow the employee to retain his or her stock options for the unexpired term of the stock options.

6)Amendments ~~Accounts~~to ~~receivable~~Stock Option Plans

	May 31, 2006			November 30, 2005
Trade	$	3,117,571		$	6,218,403
Unbilled revenue		3,674,284			2,564,049
Technology Partnerships Canada contribution		309,788			625,167
Other		139,852			48,026
Allowance for doubtful accounts		(17,679	)		(36,250	)
	$	7,223,816		$	9,419,395

No material amendments may be made to the Stock Option Plans without the approval of the TSX and the Company’s shareholders by way of disinterested vote.

7)Financial ~~Inventory~~Assistance

		May 31, 2006				November 30, 2005
Materials and components		$	1,109,450			$	937,554

The Company does not provide financial assistance to optionees to facilitate the exercise of their options. The Company’s Stock Option Plans contain provisions for the creation of a payroll deduction plan to fund option exercises, but the Company has not implemented such a plan.

8)PARTICULARS ~~Capital~~OF ~~Stock~~OTHER MATTERS TO BE ACTED UPON

a)Management ~~Class A~~of ~~preference~~the ~~shares~~Company knows of no matters to come before the Meeting other than those referred to in the Notice of Meeting accompanying this Information Circular. However, if any other matters properly come before the Meeting, it is the intention of the persons named in the form of

~~The Company has 30,262 (November 30, 2005 – 30,262) Class A preference shares outstanding~~24 that have a nominal value for financial statement purposes. These Class A preference shares are being held in escrow but are no longer subject to any escrow restrictions and may be converted at any time into common shares of the Company, by notice in writing from the holders.

b)proxy ~~Class B~~accompanying ~~preference~~this ~~shares~~Information Circular to vote the same in accordance with their best judgment of such matters.

	For the six months ended
	May 31, 2006
	Number of Class B
	preference
	shares			Amount
Balance – beginning of period		341,240		$	9,040,914
Accretion of discount – Series 2		—			362,772
Converted to common		(24,000	)		(669,038	)
Tax benefit related to share issue costs		—			15,666
Balance – end of period		317,240		$	8,750,314

ADDITIONAL INFORMATION

~~Page~~Additional 4information respecting the Company is available on the SEDAR website at www.sedar.com or the Company’s web site at www.osigeospatial.com. Securityholders may contact the Company to request copies of the Company’s financial statements and management’s discussion and analysis at the following address:

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

OSI GEOSPATIAL INC.
Suite 107 – 930 West 1st Street
North Vancouver, British Columbia, V7P 3N4
Canada
Phone: 604-904-4600
Email: invest@osigeospatial.com

c)Financial ~~Issued~~information is provided in the Company’s comparative financial statements and management’s ~~outstanding~~discussion ~~common~~and ~~shares~~analysis for the financial year ended November 30, 2006.

	For the six months ended
	May 31, 2006
	Number of
	common
	shares		Amount
Balance – beginning of period		30,367,309	$	15,373,529
Shares issued to CHI shareholders (Note 4)		1,067,975		752,948
Class B Series 2 preference shares converted		1,411,764		927,959
Exercise of stock options		10,000		6,480
Balance – end of period		32,857,048	$	17,060,916

BOARD APPROVAL

~~During the three months ended May 31, 2006 24,000 Preference shares were converted into 1,411,764 common shares with an aggregate fair market value of $927,959.~~ The ~~Preference~~contents ~~shares were~~and ~~reduced~~sending ~~by $669,039, the carrying value~~ of ~~the~~this ~~shares~~Information ~~converted,~~Circular ~~and~~have ~~the~~been ~~beneficial conversion~~approved ~~feature~~by ~~attributed to~~ the ~~converted~~Board ~~shares resulted in a deduction~~ of ~~$238,817 from~~Directors ~~additional paid in capital. The conversion resulted in an increase~~ of ~~$20,104~~the ~~to deficit~~Company.

d)ON ~~Warrants~~BEHALF OF THE BOARD OF DIRECTORS

	For the six months ended
	May 31, 2006
	Number of
	warrants		Amount
Balance – beginning of period		13,788,365	$	4,286,060
Balance – end of period		13,788,365	$	4,286,060

KENNETH KIRKPATRICK
President and Chief Executive Officer

e) JOHN ~~Stock~~T. ~~option plans~~SENTJENS Secretary

~~A summary of the status of the Company’s stock option plans at May 31, 2006 is as follows:~~25

				Weighted average
	Number of shares			exercise price
Outstanding – November 30, 2005		3,674,417		$	0.87
Granted		247,500			0.67
Forfeited		(130,000	)		0.83
Expired		(63,333	)		0.90
Exercised		(10,000	)		0.68
Outstanding and Exercisable – May 31, 2006		3,718,584		$	0.86

SCHEDULE A
TO THE INFORMATION CIRCULAR OF OSI GEOSPATIAL INC. (“OSI”)

~~Page~~BOARD 5OF DIRECTORS’ MANDATE

OSI Geospatial Inc.		U.S. GAAP
Notes to the Consolidated Financial Statements (unaudited)
Three and Six Months Ended May 31, 2006 and 2005
(expressed in U.S. dollars)

The board of directors of the Corporation has overall responsibility for the stewardship of the Corporation, including responsibility for:

~~Stock-based~~(a) ~~compensation~~ adoption of a strategic planning process and approval and review, on at least an annual basis, of a strategic plan which takes into account, among other things, the opportunities and risks of the Corporation’s business; (b) identification of the principal risks of the Corporation’s business and ensuring the implementation of appropriate systems to manage these risks; (c) succession planning, including appointing, training and monitoring senior management in general and the CEO in particular; (d) communication policies for the Corporation, which policies should (i) address how the Corporation interacts with analysts, investors, other key stakeholders and the public; (ii) contain measures for the Corporation to comply with its continuous and timely disclosure obligations and to avoid selective disclosure; and (iii) be reviewed at least annually; (e) the integrity of the Corporation’s internal control and management information systems; (f) developing the Corporation’s approach to corporate governance issues; and (g) assessing the effectiveness of the Board, the recruitment of new directors and the provision of orientation and education programs for new directors.

~~For~~Strategic ~~the three and six months ended May 31, 2006, the Company incurred non-cash stock-based~~Planning compensation expense of $78,569 and $103,743 respectively, related to stock options granted to the end of May 31, 2006 (three and six month period ended May 31, 2005 — $10,725 and $12,961). The expense was included in general and administrative costs and was recorded in additional paid-in capital.

OfSenior management of the ~~$78,569,~~Corporation ~~$74,142~~must ~~relates~~develop long-term strategies with respect to the Corporation’s ~~222,500~~operations ~~stock~~to ~~options~~be ~~granted~~adopted ~~during~~by the ~~quarter~~board ~~ended~~of directors. The strategies are to be ~~May 31~~reviewed and updated not less than annually and otherwise as reasonably required. Included in the development of these long-term strategies will be annual strategic, ~~2006~~operating and capital plans. The strategic plan is to take into account, among other things, the opportunities and risks of the Corporation’s business.

~~The~~Identification ~~fair~~and ~~value~~Management of ~~stock options was estimated using the Black-Scholes option pricing model~~Risks ~~using the following weighted average assumptions by grant period:~~

	2006			2005
Risk-free interest rate		4.14	%		2.20	%
Volatility		53	%		58	%
Estimated average option lives	5 years			3 years
Dividend yield		0.0	%		0.0	%

The board of directors has the responsibility to identify the principal risks of the Corporation’s business and must, with management, establish systems and procedures to ensure that these risks are monitored. These systems and procedures must include the effective management of the Corporation’s assets and financial resources, and must ensure compliance with all regulatory obligations.

f)Supervision ~~Loss~~and ~~per~~Succession ~~share~~of Management

	For the three months ended May 31,
	2006			2005
Net loss for the period	$	(2,137	)	$	(1,370,047	)
Less: Class B preference share dividends		(526,406	)		(201,921	)
Accretion of discount on Class B Series 1 preference shares		—			(316,103	)
Accretion of discount on Class B Series 2 preference shares		(186,512	)		(91,029	)
Accretion of beneficial conversion feature on Class B Series 2 preference shares		—			(3,881,098	)
Excess of carrying value of Class B Series 1 preference shares and beneficial conversion feature over repurchase consideration paid		—			300,159
Net loss available to common shareholders	$	(715,055	)	$	(5,560,039	)
Weighted average number of common shares outstanding – basic and diluted		32,301,357			27,488,074
Loss per share – basic and diluted	$	(0.02	)	$	(0.20	)

The board of directors is responsible for the supervision of senior management to ensure that the operations of the Corporation are conducted in accordance with objectives set by the board. The

~~Page 6~~26

~~OSI~~board ~~Geospatial~~must ~~Inc.~~approve ~~U.S.~~all ~~GAAP~~appointments ~~Consolidated~~of ~~Statement~~senior management and, as part of ~~Earnings~~the ~~(Loss)~~Corporation’s ~~(unaudited)~~planning process, ~~(expressed~~review inand ~~U.S.~~discuss ~~dollars)~~succession planning for senior management positions.

	For the six months ended May 31,
	2006			2005
Net loss for the period	$	(1,231,793	)	$	(1,568,513	)
Less: Class B preference share dividends		(526,406	)		(201,921	)
Accretion of discount on Class B Series 1 preference shares		—			(337,802	)
Accretion of discount on Class B Series 2 preference shares		(362,772	)		(91,029	)
Accretion of beneficial conversion feature on Class B Series 2 preference shares		—			(3,881,098	)
Excess of carrying value of Class B Series 1 preference shares and beneficial conversion feature over repurchase consideration paid		—			300,159
Net loss available to common shareholders	$	(2,120,971	)	$	(5,780,204	)
Weighted average number of common shares outstanding – basic and diluted		31,790,928			27,488,074
Loss per share – basic and diluted	$	(0.07	)	$	(0.21	)

Corporate Disclosure Policy

IfThe all preferred shares were converted, and all warrants and options were exercised, there would be a total of 69,055,426 common shares outstanding at May 31, 2006 (May 31, 2005 – 66,696,813). As a result of the exercise of all warrants and options, the company would receive cash of $14,133,042 (May 31, 2005 — $11,572,200). 9) Contingency In July 2002, two of the CompanyCorporation’s ~~subsidiaries,~~Corporate ~~Offshore~~Disclosure ~~Systems~~Policy ~~Ltd.~~is ~~and~~incorporated Mapcon Mapping Ltd.(formerly OSI Geomatics Ltd.), and four employees became subject to a lawsuit for an undisclosed amount by Triathlon Ltd., a subsidiary of MacDonald, Dettwiler and Associates Ltd., related to use of confidential information and breach of fiduciary duty. No amount has been accrued at May 31, 2006 in ~~respect of these claims because~~ the ~~potential~~Written ~~liability~~Disclosure ~~for~~Policy of the ~~claims~~Corporation and ~~the~~is ~~amount~~available ofon ~~damages,~~its ifWeb ~~any,~~Site ~~cannot~~at ~~be reasonably estimated~~www. ~~Management believe that the claims are without merit~~osigeospatial. ~~10) Related party transactions On April 11, 2005, E~~com. ~~Brinton~~Following ~~Coxe,~~it awill ensure ~~director~~that ofall ~~the~~material ~~Company,~~issues ~~assisted~~relating the Company in structuring and arranging the private placement financing. In consideration for his services, the Company paid him compensation of $671,529 and 350,000 common share purchase warrants. The cash compensation of $671,529 paid to ~~Mr. Coxe included an adjustment in~~ the ~~amount~~Corporation ofare ~~$13,093~~communicated to ~~reflect~~shareholders ~~exchange rate changes between the U.S. dollar~~ and other ~~Canadian~~stakeholders ~~Dollar~~adequately. ~~Mr.~~It ~~Coxe~~includes ~~has~~provisions ~~also~~regarding ~~participated in~~ the ~~financing~~release ~~by purchasing 100 units personally. On April 8, 2005, Gerald J. Shields was elected to the Company’s Board~~ of ~~Directors~~annual and quarterly ~~became~~reports ~~a related party as he provides legal services to the Company through a law firm in which he has an interest. 11) Income taxes The Company is subject to income taxes in Canada~~ and ~~the~~press ~~United States and the use of estimates is required in determining the Company’s provision for income taxes~~releases. ~~Although the Company believes its tax~~

~~Page~~In 7addition to annual general meetings, meetings will be held from time to time in each year between management and various investors, investment analysts, credit rating agencies and financial institutions. Selective disclosure to investors and investment analysts is not permitted and the Corporate Disclosure Policy contains measures to ensure this does not occur.

~~OSI~~The ~~Geospatial~~Corporate ~~Inc.~~Disclosure ~~U.S.~~Policy ~~GAAP~~must ~~Consolidated~~be ~~Statement~~reviewed ofannually ~~Earnings~~by ~~(Loss)~~the ~~(unaudited) (expressed in U~~board.~~S. dollars)~~

~~estimates~~Internal are reasonable, the ultimate tax determination involves significant judgement that could become subject to audit by tax authorities in the ordinary course of business. The effective rate used to record income tax expense for the three and six months ended May 31, 2006 differed from the Canadian federal and provincial combined statutory tax rate primarily due to the change in valuation allowance to reflect those future tax benefits that were more likely than not to be realized, future income tax payments that will result from the payment of Class B preference share dividends and, also, items not deductible for income tax purposes. The change in effective tax rate from 2005 to 2006 was due primarily to the effect of the change in valuation allowance. At May 31, 2006, the Company adjusted its valuation allowance against deferred tax assets to reflect the amount of the future tax benefit that was more likely than not to be realized. A valuation allowance continues to be provided against those deferred tax assets for which there is uncertainty of future realization.Control

	Three months ended May 31,						Six months ended May 31,
	2006			2005			2006			2005
Deferred income tax expense (recovery)	$	(23,321	)	$	113,378		$	(7,594	)	$	(94,440	)
Current income tax expense		119,441			66,587			93,706			82,116
Income tax expense (recovery)	$	96,120		$	179,965		$	86,112		$	(12,324	)
Effective tax rate		102	%		(15	%)		(8	%)		(1	%)

The board of directors, through the Audit Committee, is responsible for the integrity of the internal control and management information systems of the Corporation. The duties of the Audit Committee are discussed in the Company’s annual information form. Please refer to the annual information form for this information. The annual information form is available on SEDAR at www.sedar.com.

~~12)~~Securities ~~Segmented~~Trading information The Company’s reportable segments are as outlined below. Accounting policies used by these segments are the same as those described in the significant accounting policies as disclosed in note 2 of the Company’s audited consolidated annual financial statements for the year ended November 30, 2005 prepared in accordance with U.S. GAAP. The Company defines reportable segments as components of the Company about which separate financial information is available and which is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.Policy

Three Months Ended May 31, 2006
								Corporate
	International							and Public
	Systems		U.S. Systems		Mapping			Company
	Operations		Operations		Operations			Costs			Total
Revenue	$	2,435,442	$	2,370,117	$	1,334,310		$	—		$	6,139,869
Gross profit		1,614,216		544,239		436,517			—			2,594,972
Technology Partnerships Canada — net		185,704		—		—			—			185,704
Interest expense		1		282		—			5,935			6,218
Income tax expense (recovery)		974		9,570		(2,122	)		87,698			96,120
Net earnings (loss)		652,889		48,789		121,077			(824,892	)		(2,137	)
Plant and equipment expenditures		27,906		10,822		521			—			39,249
Intangible expenditures		18,509		13,216		20,998			—			52,723
Depreciation and amortization	$	51,029	$	79,461	$	69,445		$	1,290		$	201,225

The Corporation’s Securities Trading Policy sets out Blackout Periods during which trading in securities of the Corporation is prohibited and is incorporated in the Written Disclosure Policy of the Corporation. It is available on the Corporation’sWeb Site at www.osigeospatial.com.

~~Page~~Outside 8Advisors

~~OSI~~An ~~Geospatial~~individual ~~Inc.~~director ~~U.S.~~may ~~GAAP~~engage ~~Consolidated~~an ~~Statement~~outside ofadvisor ~~Earnings~~at ~~(Loss)~~the ~~(unaudited)~~expense ~~(expressed~~of the Corporation in appropriate ~~U.S.~~circumstances ~~dollars)~~and subject to approval of the Executive Committee of the board.

Six Months Ended May 31, 2006
								Corporate
	International							and Public
	Systems		U.S. Systems		Mapping			Company
	Operations		Operations		Operations			Costs			Total
Revenue	$	3,717,882	$	4,221,681	$	1,863,057		$	—		$	9,802,620
Gross profit		2,292,924		967,280		528,474			—			3,788,678
Technology Partnerships Canada — net		339,268		—		—			—			339,268
Interest expense		—		281		—			11,983			12,264
Income tax expense (recovery)		974		6,197		(8,757	)		87,698			86,112
Net earnings (loss)		260,332		49,213		(119,999	)		(1,421,339	)		(1,231,793	)
Plant and equipment expenditures		45,863		15,874		25,280			—			87,017
Intangible expenditures		51,238		13,179		28,582			—			92,999
Depreciation and amortization	$	97,175	$	151,698	$	136,285		$	2,420		$	388,578

Independence of the Board

Three Months Ended May 31, 2005
									Corporate
	International								and Public
	Systems			U.S. Systems		Mapping			Company
	Operations			Operations		Operations			Costs			Total
Revenue	$	783,226		$	—	$	750,019		$	—		$	1,533,245
Gross profit		93,515			—		223,162			—			316,677
Technology Partnerships Canada — net		347,927			—		—			—			347,927
Interest expense		4,373			—		74			2,503			6,950
Income tax expense (recovery)		114,050			—		65,915			—			179,965
Net earnings (loss)		(763,083	)		—		(151,927	)		(455,037	)		(1,370,047	)
Plant and equipment expenditures		51,786			—		8,985			—			60,771
Intangible expenditures		4,402			—		14,809			—			19,211
Depreciation and amortization	$	94,082		$	—	$	—		$	986		$	95,068

In order to ensure that the board of directors can function independently of management, it must:

Six Months Ended May 31, 2005
									Corporate
	International								and Public
	Systems			U.S. Systems		Mapping			Company
	Operations			Operations		Operations			Costs			Total
Revenue	$	2,372,381		$	—	$	998,748		$	—		$	3,371,129
Gross profit		1,073,094			—		248,699			—			1,321,793
Technology Partnerships Canada — net		519,538			—		—			—			519,538
Interest expense		8,921			—		1,273			7,040			17,234
Income tax expense (recovery)		(58,672	)		—		46,349			—			(12,324	)
Net earnings (loss)		(290,277	)		—		(283,614	)		(994,622	)		(1,568,513	)
Plant and equipment expenditures		73,923			—		8,987			—			82,910
Intangible expenditures		13,810			—		16,468			—			30,278
Depreciation and amortization	$	84,380		$	—	$	77,126		$	2,601		$	164,107

	(a)		appoint a chair of the board who is not a member of management who will have responsibility to ensure the board discharges its responsibilities; or

	(b)		assign this responsibility to an outside director known as the lead director. The chair or lead director should ensure that the board:

~~Page~~(i) 9 understand the boundaries between the board and management responsibilities; (ii) address its responsibilities under this Corporate Governance Policy; and (iii) meet on a regular basis without management present.

~~OSI Geospatial Inc. U.S. GAAP Consolidated Statement of Earnings (Loss) (unaudited) (expressed in U.S. dollars)~~27

							Corporate
	International						and Public
	Systems		U.S. Systems		Mapping		Company
Total assets employed	Operations		Operations		Operations		Costs		Total
As at May 31, 2006	$	6,218,894	$	10,520,044	$	3,987,931	$	—	$	20,726,869
As at November 30, 2005	$	17,648,501	$	—	$	3,553,353	$	—	$	21,201,854



OSI Geospatial, Inc

~~Geographically, revenues reported are based on the location of the Company’s customers.~~Security Class

	For the three months ended				For the six months ended
	May 31,		May 31,		May 31,		May 31,
	2006		2005		2006		2005
Europe	$	214,969	$	239,296	$	387,582	$	1,563,393
Australia/New Zealand		387,200		388,712		774,272		642,177
United States		4,562,929		514,621		6,848,260		677,463
Canada		974,771		390,616		1,792,506		488,096
Total	$	6,139,869	$	1,533,245	$	9,802,620	$	3,371,129

Holder Account Number

~~Geographically,~~Form of ~~plant~~Proxy ~~and~~- ~~equipment~~Annual ~~and~~Meeting ~~intangible~~to ~~and~~be ~~other~~held ~~assets are reported based~~ on ~~location.~~ ~~At May~~April 3118, ~~2006 and November 30, 2005, all of the Company’s plant and equipment and~~2007 ~~intangible and other assets were located in Canada and the U.S. as follows:~~

	May 31, 2006
	Canada		U.S.		Total
Plant and equipment	$	839,677	$	240,955	$	1,080,632
Intangible and other assets		329,675		540,883		870,558
Total	$	1,169,352	$	781,838	$	1,951,190

This Form of Proxy is solicited by and on behalf of Management.

	November 30, 2005
	Canada		U.S.		Total
Plant and equipment	$	817,459	$	51,939	$	869,398
Intangible and other assets		296,826		328,973		625,799
Total	$	1,114,285	$	380,912	$	1,495,197

Notes to proxy

13)		Reconciliation of generally accepted accounting principles
		The Company prepares its unaudited interim consolidated financial statements in accordance with U.S. generally accepted accounting principles which, as applied in these unaudited interim consolidated financial statements, conform in all material respects to Canadian GAAP, except for the differences below as follows:
		(a) Under Canadian GAAP, for stock option awards granted by the Company after December 1, 2003, the Company is required to recognize compensation when stock options are granted to employees and directors under stock option plans with no cash settlement feature based on the fair value method. As permitted by the standard, the Company had applied this change prospectively for new awards granted on or after December 1, 2003. Prior to December 1, 2005 under U.S. GAAP, the Company accounted for stock-based compensation to employees and directors in accordance with the intrinsic value method of the Accounting

1.		Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).

2.		If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this proxy with signing capacity stated.

3.		This proxy should be signed in the exact manner as the name appears on the proxy.

4.		If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.

5.		The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management.

6.		The securities represented by this proxy will be voted or withheld from voting, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.

7.		This proxy confers discretionary authority in respect of amendments to matters identified in the Notice of Meeting or other matters that may properly come before the meeting.

8.		This proxy should be read in conjunction with the accompanying documentation provided by Management.

~~Page~~Proxies 10submitted must be received by 5:00 pm, Eastern Time, on April 16, 2007.

~~OSI~~VOTE ~~Geospatial~~USING ~~Inc.~~THE ~~U.S.~~TELEPHONE ~~GAAP~~OR ~~Consolidated~~INTERNET ~~Statement~~24 ofHOURS ~~Earnings~~A ~~(Loss)~~DAY ~~(unaudited)~~7 ~~(expressed~~DAYS inA ~~U.S. dollars)~~WEEK!

~~Principles~~To ~~Board~~Vote ~~Opinion~~Using ~~No. 25, “Accounting for Stock Issued to Employees”. Effective December 1, 2005, under U.S. GAAP~~ the ~~Company~~Telephone ~~accounts~~To ~~for~~Vote ~~stock-based~~Using ~~compensation to employees and directors in accordance with~~ the fair value method of FASB Statement 123(R) “Accounting for Stock-based Compensation” (b) Under Canadian GAAP, there is no requirement to record the beneficial conversion feature and accretion of discount when preference shares are issued with attached warrants. For U.S. GAAP purposes, during the fiscal years 2003 and 2005 the Company recorded beneficial conversion features of $455,425 and $3,881,027, respectively, on the issuance of Class B preference shares Series 1 and 2, as a reduction to the net earnings available to common shareholders calculated on the effective conversion price of the preference shares to common shares based on the proceeds allocated to the preference shares. In both cases, the conversion feature of the preference shares vested immediately and the Company recorded the accretion of the full amount of the beneficial conversion feature. For both the Series 1 and Series 2 Class B preference shares, the discount on these shares that resulted from the allocation of the gross proceeds to the Class B preference shares and to the attached warrants is accreted over the five-year life of the warrants. This resulted in an accretion of $186,512 and $362,773 to deficit for the three and six months ended May 31, 2006, respectively ($91,032 for the three and six months ended May 31, 2005). (c) Under Canadian GAAP, there is a requirement for derivatives outside of hedging relationships to be recognized on the balance sheet at fair market value, however for derivatives in hedging relationships, Canadian GAAP does not specify how such derivatives should be recorded. As a result, under Canadian GAAP in some instances derivatives may not be recorded on the balance sheet. Under U.S. GAAP it is required that all derivatives be recorded as assets or liabilities, measured at fair value. Derivatives that are not hedges are adjusted to fair value through income. If the derivative is a hedge, depending upon the nature of the hedge, changes in the fair value of the derivative are either offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income until the hedged item is recognized in income. The ineffective portion of a derivative’s change in fair value is immediately recognized into income. With respect to the ineffective portion of derivative’s changes in fair value, the Company had a foreign exchange gain of $12,131 for the three and six months ended May 31, 2006 (foreign exchange loss of $6,269 for the three and six months ended May 31, 2005) under U.S. GAAP which has not been recorded under Canadian GAAP. (d) Under Canadian GAAP, the Company was not required to record stock-based compensation for stock options granted to third parties prior to December 1, 2001. Under U.S. GAAP, the Company is required to record stock-based compensation for options granted to third parties based on the fair value method as required by SFAS 123(R) retroactive for all prior periods. These stock based compensation transactions, result in differences of $649,092 (May 31, 2005 — $649,092) when compared to the same balances as previously reported under Canadian GAAP. (e) For Canadian GAAP financial statement purposes, the Company’s 30,262 (November 30, 2005 — 30,262) Class A preference shares have been presented at a nominal value. For U.S. GAAP financial statement purposes, these shares have been presented at a value of $19,227. (f) For Canadian GAAP financial statement purposes, the Company has recorded a cumulative translation adjustment of $2,655,028 (at November 30, 2005 $2,290,623) which is a separate component of shareholders’ equity. For U.S. GAAP purposes changes in the cumulative translation adjustment are included as a component of accumulated other comprehensive income.Internet

Page 11


•	Call the number listed BELOW from a touch tone telephone.	•	Go to the following web site: www.computershare.com/proxy

	1-866-732-VOTE (8683) Toll Free

~~OSI~~If ~~Geospatial~~you ~~Inc.~~vote ~~U.S.~~by ~~GAAP~~telephone ~~Consolidated~~or ~~Statement~~the ofInternet, ~~Earnings~~DO ~~(Loss)~~NOT ~~(unaudited)~~mail ~~(expressed~~back inthis Uproxy.~~S. dollars)~~

~~(g)~~Voting Ifby ~~Canadian~~mail ~~GAAP~~may ~~were~~be ~~followed:~~the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

i)Voting by mail or by Internet are the ~~effect~~only methods by which a holder may appoint a person as proxyholder other than the Management nominees named on the ~~Consolidated~~reverse ~~Statements~~of this proxy. Instead of mailing ~~Earnings~~this ~~would~~proxy, ~~be:~~you may choose one of the two voting methods outlined above to vote this proxy.

	For the three months ended						For the six months ended
	May 31,			May 31,			May 31,			May 31,
	2006			2005			2006			2005
Earnings (loss) for the period, U.S. GAAP	$	(2,137	)	$	(1,370,047	)	$	(1,231,793	)	$	(1,568,513	)
Adjustment for stock-based compensation (a),(d)		—			(169,685	)		—			(189,632	)
Adjustment for loss on derivative (e)		12,131			6,269			12,131			6,269
Earnings (loss) for the period, Canadian GAAP	$	9,994		$	(1,194,093	)	$	(1,219,662	)	$	(1,372,612	)
Basic and diluted earnings (loss) per common share, Canadian GAAP		0.00			(0.04	)		(0.04	)		(0.05	)
Weighted average number of common shares, basic and diluted, Canadian GAAP		32,301,357			27,488,074			32,301,507			27,488,074

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER, HOLDER ACCOUNT NUMBER and ACCESS NUMBER listed below.

~~ii)~~CONTROL ~~Balance~~NUMBER ~~Sheet~~HOLDER ~~items~~ACCOUNT ~~which~~NUMBER ~~would~~ACCESS ~~differ under Canadian GAAP are as follows:~~NUMBER

	May 31, 2006		November 30, 2005
Common shares (d)	$	16,411,824	$	14,724,437
Class B Series 2 preference shares (b)		7,431,150		8,517,064
Additional paid in capital (a), (b)		478,435		613,459
Accumulated Deficit (a), (b), (c), (d), (f)		12,209,165		11,215,678
Cumulative translation adjustment (f)		—		—
Accounts receivable (c)		7,211,685		—

14FE07058.E.SEDAR/000001/000001/i

~~Page~~+ 12 + Appointment of Proxyholder The undersigned (“Registered Shareholder”) of OSI Geospatial, Inc (the “Company”) hereby appoints: Kenneth Kirkpatrick, President and CEO of the Company, or failing him, John Sentjens, the Secretary of the Company, OR Print the name of the person you are appointing if this person is someone other than the Management Nominees listed herein.

~~Form 52-109FM2~~as –my/our ~~Certification~~proxyholder with full power of ~~Interim~~substitution ~~Filings~~and to vote in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual Meeting of OSI Geospatial, Inc to be held at the Metropolitan Hotel (645 Howe Street, Vancouver, British Columbia) on April 18, 2007 at 1: 30 PM (Local Time) and at any adjournment thereof.

I,VOTING ~~Ken~~RECOMMENDATIONS ~~Kirkpatrick,~~ARE ~~President~~INDICATED ~~and~~BY ~~Chief~~HIGHLIGHTED ~~Executive~~TEXT ~~Officer~~OVER ofTHE ~~Offshore Systems International Ltd~~BOXES., ~~certify that:~~

1. I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Offshore Systems International Ltd., (the “issuer”) for the interim period ending May 31, 2006; 2. Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings; 3. Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings; and 4. The issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures for the issuer, and we have designed such disclosure controls and procedures or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared.

For

Against

1. Fix Number of Directors

To fix the number of directors at seven (7).

2. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. Kenneth Kirkpatrick

02. Raymond W. Johnston

03. Helmut F. Lobmeier

04. Walter P. Purio

05. Gerald J. Shields

06. Joseph A. Stroud

07. Donald W. Young

3. Appointment of Auditor

For

Withhold

Appointment of Ernst and Young, LLP, Chartered Accountants, as Auditors of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration.

For

Against

4. Amended and Restated Shareholder Rights Plan

To approve an amended and restated shareholder rights plan.

For

Against

5. Transact Other Business

To transact such other business as may properly come before the meeting.

~~Date:~~Authorized ~~July 11~~Signature(s) - This section must be completed for your instructions to be executed. Signature(s) I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated above, ~~2006~~ this Proxy will be voted as recommended by Management. MM/DD/YY

/Interim Financial Statements Annual Report Mark this box if you would like to receive interim financial statements and accompanying Management’s/ ~~“Ken~~Discussion ~~Kirkpatrick”~~and ~~Ken~~Analysis ~~Kirkpatrick~~by ~~President~~mail. o Mark this box if you would like to receive the Annual Report and ~~Chief~~accompanying ~~Executive~~Management’s ~~Officer~~Discussion and Analysis by mail. o

~~Form 52-109FM2~~If –you ~~Certification~~are ofnot ~~Interim~~mailing ~~Filings~~back your proxy, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.

I,n ~~John~~0 T.2 ~~Sentjens,~~2 ~~Vice~~8 ~~President~~1 ~~Finance~~6 ofA ~~Offshore~~R ~~Systems~~1 ~~International~~O ~~Ltd.,~~S ~~certify~~I ~~that:~~ Q +

1.OSI I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Offshore Systems International Ltd.Geospatial, (the “issuer”) for the interim period ending May 31, 2006; 2. Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings; 3. Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings; and 4. The issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures for the issuer, and we have designed such disclosure controls and procedures or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared.Inc

~~Date: July 11, 2006~~Security Class

~~/s/~~Holder Account ~~“John T. Sentjens” John T. Sentjens Vice President Finance~~Number

Voting Instruction Form (“VIF”) - Annual Meeting to be held on April 18, 2007

NON-REGISTERED (BENEFICIAL) SHAREHOLDERS

1.		We are sending to you the enclosed proxy-related materials that relate to a meeting of the holders of the series or class of securities that are held on your behalf by the intermediary identified above. Unless you attend the meeting and vote in person, your securities can be voted only by management, as proxy holder of the registered holder, in accordance with your instructions.

2.		We are prohibited from voting these securities on any of the matters to be acted upon at the meeting without your specific voting instructions. In order for these securities to be voted at the meeting, it will be necessary for us to have your specific voting instructions. Please complete and return the information requested in this VIF to provide your voting instructions to us promptly.

3.		If you wish to attend the meeting in person or appoint some other person or company, who need not be a shareholder, to attend and act on your behalf at the meeting, please insert your name(s) or the name of your chosen appointee in the space provided (please see reverse).

4.		This VIF should be signed by you in the exact manner as your name appears on the VIF. If these voting instructions are given on behalf of a body corporate set out the full legal name of the body corporate, the name and position of the person giving voting instructions on behalf of the body corporate and the address for service of the body corporate.

5.		If this VIF is not dated, it will be deemed to bear the date on which it is mailed by management to you.

6.		When properly signed and delivered, securities represented by this VIF will be voted as directed by you, however, if such a direction is not made in respect of any matter, the VIF will direct the voting of the securities to be made as recommended in the documentation provided by Management for the meeting.

7.		This VIF confers discretionary authority on the appointee to vote as the appointee sees fit in respect of amendments or variations to matters identified in the notice of meeting or other matters as may properly come before the meeting or any adjournment thereof.

8.		Should you wish to receive a legal form of proxy, please write to Computershare at the address indicated above and one will be sent to you by mail. Please remember that a legal proxy is subject to all the terms and conditions that apply to proxies as outlined in the documentation provided by Management including any cut-off time for receipt.

9.		Your voting instructions will be recorded on receipt of the VIF and a legal form of proxy will be submitted on your behalf.

10.		By providing voting instructions as requested, you are acknowledging that you are the beneficial owner of, and are entitled to instruct us with respect to the voting of, these securities.

11.		If you have any questions regarding the enclosed documents, please contact the Registered Representative who services your account.

12.		This VIF should be read in conjunction with the accompanying documentation provided by Management.

VIFs submitted must be received by 5:00 pm, Eastern Time, on April 16, 2007.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!


	To Vote Using the Telephone						To Vote Using the Internet


•	Call the number listed BELOW from a touch tone telephone.	•	Go to the following web site: www.investorvote.com

	1-866-734-VOTE (8683) Toll Free

If you vote by telephone or the Internet, DO NOT mail back this VIF.

Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

Voting by mail or by Internet are the only methods by which a holder may choose an appointee other than the Management appointees named on the reverse of this VIF. Instead of mailing this VIF, you may choose one of the two voting methods outlined above to vote this VIF.

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER, HOLDER ACCOUNT NUMBER and ACCESS NUMBER listed below.


CONTROL NUMBER		HOLDER ACCOUNT NUMBER		ACCESS NUMBER

14FE07058.NOBO.E.SEDAR/000001/000001/i

as my/our proxyholder with full power of substitution and to vote in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual Meeting of OSI Geospatial, Inc to be held at the Metropolitan Hotel (645 Howe Street, Vancouver, British Columbia) on April 18, 2007 at 1:30 PM (Local Time) and at any adjournment thereof.

VOTING RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES.

For

Against

1. Fix Number of Directors

To fix the number of directors at seven (7).

2. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. Kenneth Kirkpatrick

02. Raymond W. Johnston

03. Helmut F. Lobmeier

04. Walter P. Purio

05. Gerald J. Shields

06. Joseph A. Stroud

07. Donald W. Young

3. Appointment of Auditor

For

Withhold

Appointment of Ernst and Young, LLP, Chartered Accountants, as Auditors of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration.

For

Against

4. Amended and Restated Shareholder Rights Plan

To approve an amended and restated shareholder rights plan.

For

Against

5. Transact Other Business

To transact such other business as may properly come before the meeting.



Authorized Signature(s) - This section must be completed for your instructions to be executed.	Signature(s)

If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this VIF with signing capacity stated.		MM/DD/YY


Interim Financial Statements		Annual Report
Mark this box if you would like to receive interim financial statements and accompanying Management’s Discussion and Analysis by mail.	o	Mark this box if you would like to receive the Annual Report and accompanying Management’s Discussion and Analysis by mail.	o	Should you wish to receive a legal proxy, refer to Note #8 on reverse.

If you are not mailing back your VIF, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.

0 2 2 8 1 5

A R 1

O S I Q

SIGNATURE

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.



	By:	“ Ken Kirkpatrick”
		Title: President & CEO

Date: March ~~July 14~~20, ~~2006~~2007

Appointee(s)

I/We, being holder(s) of OSI Geospatial, Inc (the “Company”) hereby appoints: Kenneth Kirkpatrick, President and CEO of the Company, or failing him, John Sentjens, the Secretary of the Company,

If you wish to attend in person or appoint someone else to attend on your behalf, print your name or the name of your appointee in this space (see Note #3 on reverse).

Filing Compare · OSI GEOSPATIAL INC.