Peace Arch® Entertainment Provides Further Update Regarding the Filing of Its Fiscal 2008 Financial Statements

Peace Arch® Entertainment Group Inc. (AMEX:PAE - News) (TSX:PAE.TO - News) today provided an update with respect to the Company’s filing of its audited financial statements for the year ended August 31, 2008.

As previously disclosed, under variable interest entity accounting rules Peace Arch is obligated to consolidate the results of operations of certain single purpose motion picture production companies that Peace Arch does not own but whose pictures Peace Arch distributes. After significant efforts, Peace Arch has been unable to obtain from those entities the financial information that is required by the Company’s auditors to finalize their audit of Peace Arch’s consolidated financial statements for the year ended August 31, 2008. If left unresolved, this limitation on the scope of the audit of the Company’s fiscal 2008 financial statements will result in a qualified opinion from the Company’s auditors.

While the Company is continuing its discussions with the Ontario Securities Commission (“OSC”) regarding this issue, the OSC generally does not accept qualified audit opinions and has informed the Company that it is unlikely to grant an exemption from this requirement at this time. Consequently, the cease trade order issued by the OSC with respect to the trading of the Company’s shares on the Toronto Stock Exchange (“TSX”) will remain in effect until Peace Arch can obtain an unqualified audit opinion or an exemption from the OSC.

On August 18, 2009, the Company was notified by NYSE AMEX LLC (“AMEX”) that AMEX was willing to continue Peace Arch’s listing on AMEX provided that Peace Arch filed with the U.S. Securities and Exchange Commission (“SEC”) its Annual Report Form 20-F by August 31, 2009. Because it has not yet received an unqualified audit opinion, the Company has not yet filed its Annual Report on Form 20-F for fiscal 2008.

Peace Arch is taking several steps to resolve these issues.

First, the Company will continue to use all legal means to try to obtain from the variable interest entities the information that it needs to finalize its fiscal 2008 statements and obtain an unqualified audit opinion.

Second, the Company has begun preparing its statements for the year ending August 31, 2009. At this time the Company expects to obtain an unqualified audit opinion with respect to its fiscal 2009 statements, on which basis the Company believes the OSC will grant an exemption with respect to the qualified opinion for fiscal 2008.

Third, Peace Arch has requested that AMEX grant the Company until September 25, 2009 to file its Annual Report on Form 20-F for the reasons described above.

The Company intends to resume trading on the TSX no later than November 30, 2009 with the filing of its fiscal 2009 statements. However, no assurance can be given that the Company will be able to obtain an unqualified audit opinion for fiscal 2008 or fiscal 2009, that AMEX will grant Peace Arch a further extension, or that the Company will be able to file its Annual Report on Form 20-F for fiscal 2008 by any such extended deadline. If the Company obtains an extension from AMEX and then files its Form 20-F by the extended deadline, the Company will thereafter have to effectuate a reverse stock split in order to comply with AMEX listing requirements.

About Peace Arch Entertainment Group Inc.

Peace Arch Entertainment produces and acquires feature films and television content for distribution to worldwide markets. The Company’s award winning drama “The Tudors” airs on Showtime in the United States and the CBC in Canada, and its lifestyle series “Last 10 Pounds Boot Camp” and “Bulging Brides” both air on The Fine Living Network in the U.S. and Slice in Canada. Peace Arch’s recent feature film releases include “The Mysteries of Pittsburgh” starring Jon Foster, Peter Sarsgaard, Sienna Miller, Mena Suvari and Nick Nolte and “JCVD” starring Jean Claude Van Damme. For additional information, please visit www.peacearch.com.

Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements, usually containing the words “believe,” “estimate,” “project,” “expect,” or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

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