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Xenos Reports Fiscal 2005 Third Quarter Results

Xenos Reports 18% Revenue Growth for Fiscal 2005 Third Quarter

TORONTO, Ontario, August 11, 2005 - Xenos Group Inc. (TSX:XNS), the data to econtent companyT, today reported financial results for the third quarter and nine-month periods ended June 30, 2005.

For the fiscal third quarter ended June 30, 2005, Xenos reported revenues of $4,508,000, an increase of 17.8% compared to revenues of $3,825,000 for the same quarter last year. The Company reported EBITDA of $340,000, compared to EBITDA of $475,000 for the same period last year and third quarter net income of $83,000, or $0.01 per share, compared with net earnings of $250,000, or $0.02 per share for the third quarter of fiscal 2004. Xenos maintains a strong balance sheet, with a cash position of $12.5 million, or $1.26 per common share and no long-term debt.

For the first nine months of fiscal 2005, Xenos reported revenues of $11,239,000 and a net loss of $1,422,000, or ($0.14) per share. This compares to revenues of $12,094,000 and net earnings of $409,000, or $0.04 per share, for the same period last year.

Cash increased approximately $700,000 from the Company's prior quarter, primarily resulting from the receipt of certain annual subscription payments and ongoing working capital improvement.

"In the third quarter we demonstrated healthy revenue growth, positive EBITDA and bottom line profitability," stated Stuart Butts, CEO of Xenos. "Particularly noteworthy in the third quarter was the substantial increase in our services business as synergistic combinations of our technologies are being employed to create unique and powerful solutions for our customers."

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Mr. Butts explains: "We have substantially completed our planned hiring program in sales and marketing and have grown our professional services group during the year. Year-todate we have added seven new hires to our sales and marketing group and are now executing on targeted marketing campaigns aimed at key vertical markets."

Xenos hosts a conference call twice per year to discuss the six-month and twelve-month financial results. A conference call is not scheduled to follow the nine-months earnings report.

Xenos Chairman and CEO, Stuart Butts, will be discussing the company's progress as a guest on ROBtv's "Power Breakfast" on Tuesday August 16th at approximately 8:50 a.m. ET.

About Xenos

Xenos has provided data and electronic document transformation solutions for over 20 years. Its solutions are embraced worldwide, across a wide variety of industries, including healthcare, financial services and government. Xenos improves the efficiency of information and data management while preserving investments in existing IT infrastructure, systems, applications and procedures. Its solutions provide the capture, composition, transformation, enhancement, repurposing, storage, retrieval and distribution of documents across the enterprise. Xenos data solutions are used to integrate incompatible applications, business processes, enterprise systems, partners, structured data, databases and Web services. Its product offering includes Xenos d2e, Xenos infoWEB, Xenos terminalONE and GoXML. Xenos has offices in Canada, the United States, the United Kingdom and France. Xenos trades on the Toronto Stock Exchange under the trading symbol "XNS." For more information visit www.xenos.com.

Contact:
Robert Kunihiro
Chief Financial Officer
Xenos Group, Inc.
(905) 709-1020
rkunihiro@xenos.com

Investor Relations Contact:
Cory Pala
Xenos Group, Inc.
416-657-2400
cpala@xenos.com

Certain statements made in this press release are forward-looking within the meaning of certain securities laws. Such forward-looking statements are based on a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company or developments in the Company's business or its industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. The Company urges you not to place undue reliance on these estimates, opinions and projections. The Company assumes no obligation to update forward-looking statements if assumptions or these plans, estimates, opinions or projections should change.

The Company's external auditors, Grant Thornton LLP, have not performed a review of these interim consolidated financial statements. These statements have been prepared by management and include the selection of appropriate accounting principles, judgments and estimates necessary to prepare these financial statements in accordance with Canadian generally accepted accounting principles

The Company uses financial measures including, but not limited to, "EBITDA" to supplement its consolidated financial statements, which are presented in accordance with Canadian Generally Accepted Accounting Principles (GAAP). EBITDA is not a recognized measure under GAAP and should not be construed as an alternative to net income (loss). Xenos' method of calculating EBITDA may differ from other companies and accordingly may not be comparable to measures used by other companies.

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